Diary of a Stock Market Loser

Why do terrible trades keep happening to me?

I was rolling along nicely until the middle of the week. I had back-to-back personal highs in Motley Fool CAPS for two weeks in a row, until my latest stumble.

Earlier this week, my rating actually bumped up into the double digits (woo hoo!). It didn't last, though. I'm at 4.20 now, which means that 95.8% of you taking part in the interactive stock-picking simulation are beating me.

Here's how my ratings have clocked in over the past few weeks:

As I have every week, I'll go over some of my recent picks and pans.

Making moves and taking names
I made few new market calls this week, and they weren't all bullish. My first bearish move borders on the sacrilegious, but I actually decided to bet against Warren Buffett by tagging Berkshire Hathaway (NYSE: BRK-B  ) as an underperforming stock.

I spelled out my reasons in a dedicated column, but in a nutshell, Buffett is 77. I'm not worried about the succession strategy, but I am concerned that it's hard to make money Buffett's way. Why? Well, there are too many Buffetts bidding up the same companies. Witness the performance of the company's portfolio, where the compounded annual return since 1965 has fallen during every single year since 1998.

I also went bearish on Dell (Nasdaq: DELL  ) . Obviously, Dell's problems are bigger than Michael Dell's return as CEO can handle. The drying up of corporate spending, coupled with Macs eroding PC market share, are bearish catalysts beyond Dell's control, so I can't blame the company. I just don't want to bet on the company.

On the bullish front, I placed outperform ratings on Real Goods Solar (Nasdaq: RSOL  ) , Big Lots (NYSE: BIG  ) , and China Nepstar (NYSE: NPD  ) .

Real Goods has been a disaster since going public two weeks ago. The company installs residential solar energy systems in California and Colorado. The company isn't perfect, but I like its niche, and the stock has fallen far from its $10 IPO price. 

Big Lots was a thrift-store play. The warehouse clubs have come through with better-than-expected results lately, and Big Lots is a leader in moving distressed inventory at great prices. China Nepstar is a drugstore chain in China, an industry that should be immune from the catastrophic earthquakes there last week.

Dell, Big Lots, and China Nepstar all report earnings next week, so I'm looking for them all to move, one way or the other.

Things can only get better
I did a bit of pruning, too. I closed up a successful bearish call on Netflix (Nasdaq: NFLX  ) and an unsuccessful bullish call on JetBlue (Nasdaq: JBLU  ) .

For Netflix, I may not be sold on the new Roku Wi-Fi media player that Netflix is selling to its subscribers, enabling them to view select streamed films through their television sets, but I know that better announcements will come. I own the stock in the real world, too, and was uncomfortable betting against it in CAPS.

As for JetBlue, I'm still a fan of the airline as a passenger, but how can I let an air carrier sit on my CAPS scorecard when the cost of jet fuel keeps rising? An industry shakeout will benefit the survivors, but I'm not confident about predicting the survivors in a sector I rarely follow.

What will I do next? You're welcome to follow along on my CAPS page to see how I'm doing, even before next week's update.

You may also want to give Motley Fool CAPS a shot yourself. The moment you start, you'll be way ahead of me. That doesn't mean I'm going to stop fighting, just because there's one more person ahead of me.  

I won't rest until my rating grows respectable. See you there!

Dell and Berkshire are Inside Value recommendations. Netflix and Berkshire are Stock Advisor picks. The Fool owns shares of Berkshire. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is always up for a good game. He does not own shares in any of the stocks in this story, save for Netflix. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy is even more intimate than Rick's market diary.


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Related Tickers

12/19/2014 4:02 PM
BIG $38.39 Down -1.40 -3.52%
Big Lots CAPS Rating: ***
BRK-B $151.56 Down -1.11 -0.73%
Berkshire Hathaway CAPS Rating: *****
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
JBLU $15.37 Down +0.00 +0.00%
JetBlue Airways CAPS Rating: ***
NFLX $340.12 Up +5.70 +1.70%
Netflix CAPS Rating: **

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