A 1-in-100 Investor

The first 100 days in office sets the tone for any new president. Similarly, Motley Fool CAPS keeps an eye on members who score 100 points of market outperformance on stock picks in their first 100 days. Here, we're looking at players from CAPS' top-rated All-Stars who made some of their best stock selections early on, and seeing which stocks they think will do best next.

One of our highest-rated CAPS members is daallstarz, who sports a top 97.75 member rating. Below are a few of this top member's most recent stock selections, and how they fared:

Source: Motley Fool CAPS.
*Price when call was made. Current score is how many points a member is beating (lagging) the S&P500 index from the time of the call.

Let's look at what other CAPS members are saying about these stocks, and see whether they agree with this top player's assessment.

Degree of risk
Last week, I said that despite accusations of fraud against Goldman Sachs (NYSE: GS), I suspected it would "still land on its feet like a cat." Even the grilling it got at the hands of self-serving politicians doesn't change my thinking. The rest of the financial world, though, seems far more precariously balanced, and I think the situation in Greece will start of a number of dominoes falling throughout the world.

With such a bearish outlook, it might be tempting to bet against the financial sector by purchasing shares of the Direxion Daily Financial Bear 3X ETF. After all, if Goldman, Citigroup (NYSE: C), and other investment and banking houses wobble, this ETF could quadruple the opposite of their returns (as measured by the Russell 1000 Financial Services Index).

But these leveraged ETFs aren't so easily manipulated, and as the past year has shown, markets can be quite insane. While emtking thinks the Goldman charges will be just the "tip of the iceberg" that leads to the ETF's ascension, the market's showing amazing powers of ignorance here. From its March 2009 peak at $1,040 per share, this ETF has lost 99% of its value.

Of course, most investors won't hold the ETF for a year. Heck, they likely won't hold it for more than a day. Even Direxion says it's really not appropriate for longer holding periods. Our financial institutions may indeed be headed for trouble, but I wouldn't recommend using this or any leveraged ETF anywhere other than on CAPS.

Laying the foundation
You won't find me cheerleading the housing sector's rise, either. This industry has received heavy support from a federal government that won't allow a proper (and necessary) correction to occur. From the Fed's low interest rates to first-time homebuyer tax credits, the housing market is being artificially propped up, which only delays the inevitable fallout.

Toll Brothers and Ryland Homes are just two builders benefiting from the government's decision to run interference. Uncle Sam's generosity also extends to construction companies, appliance makers, and housing industry suppliers such as carpet maker Mohawk Industries, drywall manufacturer USG (NYSE: USG), and furnishings specialist Pier 1 Imports. First-time homebuyer tax credits expire today, and as buyers rush to cash in, we'll still likely see artificially good numbers over the next month. Still, it's doubtful that the housing market or its stocks can sustain the growth it's posted thus far.

CAPS member DarthMaul09 suggested one catalyst for a Toll Brothers surge earlier this year:

There are enough investors who believe that a housing recovery is still possible for 2010. If the stock price gets another spike up, it will likely fade again, especially if the banks are still being attacked by the administration.

Similarly, Pier 1 Imports was able to climb off its deathbed and post a fourth-quarter profit, though its resurrection may have more to do with the tough cost-cutting measures it imposed than on housing's possible revival. Yet with rival Bed Bath & Beyond (Nasdaq: BBBY) seeing better times ahead, it's easy to assume that both companies are counting on higher home sales.

CAPS All-Star mrindependent thinks that everyone's overrating this quarterly blip in results, considering its long history of losses:

The tremendous optimism surrounding this company doesn't make sense to me considering that this company lost large amount of money in 2006, 2007, 2008 and 2009. For the fiscal year ended 02/10, the company is expected to earn $0.01 per share. Wow! Then in 2011, eps is supposed to balloon to $0.39. Longterm sales growth is approximately zero. In 2002, sales were $1.2 billion. In 2009, sales were $1.3 billion.

A 1-in-100 opportunity
As hockey great Wayne Gretzky once noted, "You miss 100% of the shots you never take." At Motley Fool CAPS, every investor's opinion counts. Since it's free to sign up, why not use this opportunity to take your best shot?