Though the baseball/investing analogy has gotten a lot of mileage, it's always been one of my favorites. And in the spirit of the World Series, I thought I'd take a look at my favorite piece of that analogy: Swing hard at fat pitches.
In baseball, if you swing at anything that comes in your direction, you have a pretty good chance of striking out a lot. Even if you do happen to make contact here and there, you're not very likely to get to the sweet spot of the bat on the ball.
In investing, it's a similar deal -- if you buy stocks indiscriminately, there's a good chance you'll be unhappy with the results. However, if you hold out for great businesses selling at great prices, you will likely goose the ol' investing slugging percentage.
A great feature of the CAPS community is that it makes it easy to find players that are at the top of the heap when it comes to slugging percentage. Here are a few of those top players in terms of returns per pick, along with some of their most recent picks.
- More than 70% of the picks from CAPS All-Star seatown206 are beating the S&P 500, and they are on average beating that index by more than 40%. That's pretty darn impressive when you consider the 69 picks that he's made. The most recent adds to his portfolio are Microsoft
(NASDAQ:MSFT)and The Blackstone Group (NYSE:BX).
LocoMoko doesn't have as many overall picks as seatown, but his picks have beaten the S&P by 44% on average. His performance has benefited a good deal from the 600%-plus move from China Finance
(NASDAQ:JRJC), which he picked last year. Loco's most recent picks include China Mobile (NYSE:CHL)and Excel Maritime (NYSE:EXM).
Fortis Bank is one of the many institutional investors tracked in CAPS. Though Fortis doesn't have nearly as many picks as, say, Lehman Brothers, it has sure made its picks count. Nearly 80% of Fortis' picks are beating the market, and on average they are doing so by 41%. The most recent thumbs-up picks from Fortis include Seattle Genetics
(NASDAQ:SGEN)and Venoco (NYSE:VQ).
If you're not on CAPS yet, what are you waiting for? Joining the community is free, and you get to show off your investing chops and interact with more than 70,000 other players already picking stocks.
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Microsoft is a Motley Fool Inside Value pick.