Bogleheads 2013 Hedgefund Contest

[Snowjob]

[See below. -- admin LadyGeek]
Are we going to do another one again next year? This is always a fun exercise

[Johm221122]

Deleted

[Mudpuppy]

That's a different contest Johm, otherwise known as the "guess the S&P 500" contest. Snowjob is referring to the hedge fund contest, where you pick 4 stocks (2 of which you are shorting) and try to end up with the highest (or lowest, for some of our competitors) earnings for the year. See this year's contest: http://libra-investments.com/hf/bh.html

[dmcmahon]

I'm in. Can't believe I'm not dead last in this year's contest with my disastrous short of SHLD. For 2013 we will, um, be closing our old fund and renaming everything in hopes our suckers - er, I mean investors - will forget about 2012.

[Taylor Larimore]

Are we going to do another one again next year? This is always a fun exercise

It is also an educational exercise:

Vanguard's Total Market Index Fund Admiral (VTSAX) currently has a Year-to-Date return of 15.70%. Only 7 hedge funds in the contest did better; 26 hedge funds did worse.

Past performance does not guarantee future performance.

Happy Holidays
Taylor

[LadyGeek]

Here's the hedgefund contest: Bogleheads 2012 hedge fund contest, run by Norbert Schlenker

I tried for dead last and almost broke even.

The S&P 500 contest (latest): BOGLEHEAD CONTEST -- One month to go., run by Taylor Larimore

[wshang]

Is there anyway to allow the contest to use options or futures strategies?

[Norbert Schlenker]

Thank you to LadyGeek for sending me a PM informing me Of the expressed interest. I am on the road with nothing more than an iPod and occasional wifi connections through New Years Day so this is not easy to organize. However I am happy to set the software running again once I get home for all portfolios that match the rules of last year's contest other than dates. So exactly two longs and two shorts drawn from the same universe as last year (cannot remember offhand it was S&P500 or something broader but follow those rules), specified in a post in this thread before the market opens on Jan 2, 2013. I will catch up the bookkeeping ASAP after I get home. Dividends do not count.

Sorry no high volatility options or futures strategies as they're impossible to track automatically.

Signing off now because I'm at my iPod patience limit. Excuse typos please.

[SteveB3005]

Rules refresher:

• Pick a fancy name for your hedge fund. Show some creativity. A panel of esteemed judges will choose the best.

• Before 9 am EST on 3 Jan 2012, pick two stocks to go long and two to short. You must choose four different positions. Equal dollar amounts are placed on each position.

• Common stock only. No bonds, no options, no funds.

• No trades during the year, except that you can elect at any time during normal exchange business hours to "freeze" a price for any individual position at that day's closing price, i.e. liquidate that one position. Other than that, you're stuck with what you choose for the year.

• The universe from which to choose is the Russell 3000. No exceptions. I will attempt to verify membership ahead of time and warn if offside, but the onus is on participants to verify each submitted portfolio against the link provided. Portfolios containing one or more offside positions at the start time will be excluded from the contest. Stocks that are eligible at the start but are removed from the Russell 3000 during 2012 will continue to be tracked.

• Starting prices are the 30 Dec 2011 close, ending prices will be the 31 Dec 2012 close. (Adjustments may be made to either in case of crazy spreads, at my sole discretion.)

• Positions merged out of existence during 2012 will either be liquidated at takeover price for cash deals or converted to positions in acquiring company for stock deals. As the universe has expanded for the 2012 edition, buyouts and mergers may be more common than in earlier years. Contest participants are encouraged to keep me informed of such corporate actions in their own funds, either with a PM or a post in this thread.

• Winner of the name contest deemed to purchase long positions at 1% discount and sell short positions at 1% premium!

• Dividends won't count because ...

• It's all automated to make it easy on myself.

[SteveB3005]

Iona Little Fund

Long:
CELG, Celgene Corp.
ARNA, Arena Pharmaceuticals

Short:
INTC, Intel Corp.
CMG, Chipotle Mexican Grill

Thank you Norbert for taking the time to run the contest again in 2013.

[camper]

Zona Holdings Inc.

Long:
PHM: Pulte
LEN: Lennar

Short:
HPQ: Hewlett-Packard
YUM: YUM! Brands

[LadyGeek]

Since Norbert Schlenker's internet access is limited and time is running short, let's start posting here. He can catch up when he gets back home.

Rather than copy the 2012 Bogleheads rules, he just posted A 2013 hedge fund contest over on our sister Canadian site, Financial Webring Forum. The rules are the same, except for the universe of choices (no TSX picks for Bogleheads):

Complete set of rules for 2013 ...

• Pick a fancy name for your hedge fund. Show some creativity. A panel of esteemed judges will choose the best.
  
• Before 9 am EST on 2 Jan 2013, pick two stocks to go long and two to short. Equal dollar amounts are placed on each position.
  
• Stock only. No bonds, no options, no funds.
  
• No trades during the year, except that you can elect at any time during normal exchange business hours to "freeze" a price for any individual position at that day's closing price, i.e. liquidate that one position. Other than that, you're stuck with what you choose for the year.
  
• The universe from which to choose is either the S&P/TSX or the Russell 3000. No mix and match between the two groups, no exceptions.
  
• Starting prices are the 31 Dec 2012 close, ending prices will be the 31 Dec 2013 close. (Adjustments may be made to either in case of crazy spreads, at my sole discretion.)
  
• Winner of the name contest deemed to purchase long positions at 1% discount and sell short positions at 1% premium!
  
• Dividends won't count because ...
  
• It's all automated to make it easy on myself.

My holiday schedule may result in a delay to the automation of posting of results but rest assured that I will get to it eventually.

Post your picks in this thread.

(Updated to reflect latest rules from Financial Webring Forum.)

[peppers]

We have one more trading day left and "...it ain't over until the fat lady starts to sing.." Yes, I know, I can hear her warming up.

[LadyGeek]

Name: Superior Pericenter Arbitrage Managment, LP

Long:
Exide Technologies (XIDE)
Thomas Properties Group Inc. (TPGI)

Short:
Krispy Kreme Doughnuts, Inc. (KKD)
Bon-Ton Stores Inc. (BONT)

(Updated name)

[wshang]

Fund Name: Go for the Gold
Long:
KITD
APAGF

Short:
BDSI
ARNA

[BHCadet]

New Deal Hedgefund

Long:
Best Buy Co Inc. (BBY)
Advanced Micro Devices, Inc. (AMD)

Short:
PulteGroup, Inc. (PHM)
Sprint Nextel Corp. (S)

[zaboomafoozarg]

Fund Name:
Sonic Hedgefund

Long:
GRPN (Groupon)
ZNGA (Zynga)

Short:
BBY (Best Buy)
HPQ (Hewlett Packard)

[NYBoglehead]

The Gazelle Fund

Long:
Home Depot (HD)
Ford (F)

Short:
Apple (AAPL)
JP Morgan (JPM)

[grok87]

I'm in.
Consternatio Partners

Long
Vrsk
Dltr

Short
Nly
Sdrl

Cheers,

[grok87]

Are we going to do another one again next year? This is always a fun exercise

It is also an educational exercise:

Vanguard's Total Market Index Fund Admiral (VTSAX) currently has a Year-to-Date return of 15.70%. Only 7 hedge funds in the contest did better; 26 hedge funds did worse.

Past performance does not guarantee future performance.

Happy Holidays
Taylor

Well there a couple of issues here:

1) the total stock market index is not really the best benchmark. The contest has you choose 2 long stock positions and 2 short stock positions. So it's trying to replicate a market neutral hedge fund. The best benchmark for that is tbills. For example the vanguard market neutral fund uses the Citigroup 3 month tbill index as its benchmark

https://personal.vanguard.com/us/funds/ ... IntExt=INT

2) compared to this benchmark, 18 funds beat the benchmark and 14 lagged

3) however the contest ignores dividends and this may distort performance. I understand the idea is to keep things simple. But yahoo publishes prices adjusted for dividends so perhaps we could use those?

Cheers

[FNK]

Fund name:
TechnoViking

Long:
GOOG
YHOO

Short:
MSFT
NFLX

[zaboomafoozarg]

For example the vanguard market neutral fund uses the Citigroup 3 month tbill index as its benchmark

https://personal.vanguard.com/us/funds/ ... IntExt=INT

2) compared to this benchmark, 18 funds beat the benchmark and 14 lagged

Huh, that is an odd fund. "The fund may be appropriate for a small portion of an already well-diversified portfolio" - and has a minimum investment of $250k. OK, they must not be talking about my portfolio.

[centrifuge41]

Name: Shrink Fund of America Class R6

Long:
AMD
JIVE

Short:
LUV
ENZN

[novaboglehead]

Name: I don't need no stinking index fund Fund

Long:
Qualcomm QCOM
Whole Foods WFM

Short:
Best Buy BBY
Intel INTC

[celia]

Name:
Oh, No! Fund

Long:
OMEX Odyssey Marine Exploration
HCSG Healthcare Services Group

Short:
NRG NRG Energy
OUTD Outdoor Channel

[Taylor Larimore]

Are we going to do another one again next year? This is always a fun exercise

It is also an educational exercise:

Vanguard's Total Market Index Fund Admiral (VTSAX) currently has a Year-to-Date return of 15.70%. Only 7 hedge funds in the contest did better; 26 hedge funds did worse.

Past performance does not guarantee future performance.

Happy Holidays
Taylor

Well there a couple of issues here:

1) the total stock market index is not really the best benchmark. The contest has you choose 2 long stock positions and 2 short stock positions. So it's trying to replicate a market neutral hedge fund. The best benchmark for that is tbills. For example the vanguard market neutral fund uses the Citigroup 3 month tbill index as its benchmark

https://personal.vanguard.com/us/funds/ ... IntExt=INT

2) compared to this benchmark, 18 funds beat the benchmark and 14 lagged

3) however the contest ignores dividends and this may distort performance. I understand the idea is to keep things simple. But yahoo publishes prices adjusted for dividends so perhaps we could use those?

Cheers

Grook:

From the Hedge Fund Contest Registration:

"I am going to relax last year's restriction to S&P 500 companies to a broader index, the Russell 3000."

The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. Accordingly, it seems to me that the Vanguard's Total Market Index Fund is a much better benchmark for this contest than "t-bills."

Happy Holidays.
Taylor

[gotherelate]

Title: The Hedge Hog Fund (We can't promise you won't get slaughtered)

Long:
CAG (ConAgra Foods, Inc.)
CAT (Caterpillar, Inc.)

Short:
CBOU (Caribou Coffee Co., Inc.)
SHOR (Shoretel, Inc.)

[Nate270]

I would like to enter my hedgefund: Intelligent Capital Global Opportunities Absolute Return Fund

Long:
Mant
Brk.b

Short:
Pld
Scco

[muddyglass]

fund name:
longer term capital management

long positions:
rgr - sturm, ruger & company
swhc - smith & wesson holding corporation

short positions:
bby - best buy inc.
fb - facebook inc.

[adrian2]

Fund name: No Coffee Genes in Finance

Long:
BAC Bank of America
C Citigroup

Short (from the current top performers):
SQNM Sequenom Inc
GMCR Green Mountain Coffee Roasters

[LadyGeek]

To the new investors, feel free to enter the contest. If you'd like to enter, but the rules seem too complicated, here's the simplified version:

From the Russell 3000 Index (membership list)
- Pick 2 stocks that you think will gain in value by this time next year. Those are the "long" positions.
- Pick 2 stocks that you think will lose in value by this time next year. Those are the "short" positions.
- Pick a name for your hedge fund. Google "hedge fund name" to get the general idea.

- Don't ever invest in a hedge fund, which is the point of this exercise. See: Hedge funds

Like the upcoming Boglehead Contest, which attempts to predict the value of the S&P 500 index, new investors have just as much a shot at winning as the "pros" do (or at least we think so). Give it a try.

[dmcmahon]

Here at Nocturnal Aviation we want to assure our customers that the poor performance of the now-closed High and Frequently Trading fund was due entirely to a rogue trader, Lance Link, who was not authorized to use his toes to enter trades.

We're proud to announce the opening of our new fund, run by veteran stock-picker Bobo the Wonder Chimp. We're confident you've forgotten the dismal performance of his old Daedelus fund, and only remember him as a "name" thanks to his many appearances on CNBC octo-boxes. The new fund is:

Bet You're Hedged Fund

Long AAPL CAT
Short AMZN HPQ

(Edited prior to deadline to fix spelling of fund name and short HPQ instead of GM.)

P.S. I want to echo what Taylor and Lady Geek say about hedge funds above. This annual game is a lark, and I for one can't resist poking fun at the hedge fund industry. As the old saying goes, sometimes the truest things are said in jest.

[jerome99]

Fontana Ltd.

Long- FAST, NAV

Short- RUSHA, TRV

[madpunster]

Reversion to the Meme

Longs - EDMC, RSH
Shorts - PGTI, ELLI

[grok87]

Are we going to do another one again next year? This is always a fun exercise

It is also an educational exercise:

Vanguard's Total Market Index Fund Admiral (VTSAX) currently has a Year-to-Date return of 15.70%. Only 7 hedge funds in the contest did better; 26 hedge funds did worse.

Past performance does not guarantee future performance.

Happy Holidays
Taylor

Well there a couple of issues here:

1) the total stock market index is not really the best benchmark. The contest has you choose 2 long stock positions and 2 short stock positions. So it's trying to replicate a market neutral hedge fund. The best benchmark for that is tbills. For example the vanguard market neutral fund uses the Citigroup 3 month tbill index as its benchmark

https://personal.vanguard.com/us/funds/ ... IntExt=INT

2) compared to this benchmark, 18 funds beat the benchmark and 14 lagged

3) however the contest ignores dividends and this may distort performance. I understand the idea is to keep things simple. But yahoo publishes prices adjusted for dividends so perhaps we could use those?

Cheers

Grok:

From the Hedge Fund Contest Registration:

"I am going to relax last year's restriction to S&P 500 companies to a broader index, the Russell 3000."

The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. Accordingly, it seems to me that the Vanguard's Total Market Index Fund is a much better benchmark for this contest than "t-bills."

Happy Holidays.
Taylor

Taylor,
Happy holidays to you too!
How about using the vanguard market neutral fund as a benchmark?
ThAt's down 1% year to date. So again 18 contest participants would have beaten vanguard at the long/short stock picking game. The only problem is dividends and, I guess, expense ratio.
Cheers,

[dhc]

Title:
"Medical Inflation Protection Fund"

Long:
MDRX (Allscripts Healthcare)
HCA (HCA Holdings Inc)

Short:
CERN (Cerner Corp)
PFE (Pfizer Inc)

[muddyglass]

Taylor,
Happy holidays to you too!
How about using the vanguard market neutral fund as a benchmark?
ThAt's down 1% year to date. So again 18 contest participants would have beaten vanguard at the long/short stock picking game. The only problem is dividends and, I guess, expense ratio.
Cheers,

maybe i'm missing something, but i thought market neutral funds try to long and short stuff in the same sector or which have very high correlation otherwise. our picks for long positions and short positions in this contest don't necessarily reflect that strategy. for example, some of us are trying to beat the market (to a bloody pulp) by longing the stuff we like and shorting the stuff we don't like, regardless of correlations.

[pennstater2005]

First City Sons & Co.

Long: Bank of America (BAC)
Ford (F)

Short: Pepco Holdings Co. (POM)
Alcoa (AA)

[therub]

Title: 4 Blind Squirrels
Methodology: Dart Board (virtual)
Long:
- CABOT CORP CBT
- NEWMARKET CORPORATION NEU

Short:
- KENNEDY-WILSON HLDGS IN KW
- HAVERTY FURNITURE INC HVT

[ThirteenEleven]

Madoff Capitol Mismanagement

Long:
Home Depot (HD)
Citigroup (C)

Short:
Apple (appl)
Sprint Nextel (S)

[grok87]

For example the vanguard market neutral fund uses the Citigroup 3 month tbill index as its benchmark

https://personal.vanguard.com/us/funds/ ... IntExt=INT

2) compared to this benchmark, 18 funds beat the benchmark and 14 lagged

Huh, that is an odd fund. "The fund may be appropriate for a small portion of an already well-diversified portfolio" - and has a minimum investment of $250k. OK, they must not be talking about my portfolio.

Yeah exactly. The managed payout funds use it

[grok87]

Taylor,
Happy holidays to you too!
How about using the vanguard market neutral fund as a benchmark?
ThAt's down 1% year to date. So again 18 contest participants would have beaten vanguard at the long/short stock picking game. The only problem is dividends and, I guess, expense ratio.
Cheers,

maybe i'm missing something, but i thought market neutral funds try to long and short stuff in the same sector or which have very high correlation otherwise. our picks for long positions and short positions in this contest don't necessarily reflect that strategy. for example, some of us are trying to beat the market (to a bloody pulp) by longing the stuff we like and shorting the stuff we don't like, regardless of correlations.

Interesting observation. Looks like you are correct about the vanguard market neutral fund. As per the latest report it does try to keep its sector positioning for longs and shorts pretty equal
https://personal.vanguard.com/funds/rep ... 2210063746
So what do you think the best benchmark is?

[matjen]

fund name:
Yacht Payments Partners

long positions:
JCP - J.C. Penney
SWHC - smith & wesson holding corporation

short positions:
GOOG - Google
SPG - Simon Property Group

[HardSphere]

Fund name:
High Liquidity Large Volume Porcelain Bowl Fund

Long Positions:
SWHC -- Smith Wesson & Holding
RGR -- Sturm Ruger & Co Inc

Short Positions:
AAPL -- Apple Inc
EA -- Electronic Arts Inc

[Grt2bOutdoors]

Ding Dong Capital (anyone home?) Stay tuned.....

Long: CVS - CVS Caremark Corp.
Long: L - Loews Corporation

Short: RRC - Range Resources
Short: AAPL - Apple

[muddyglass]

Taylor,
Happy holidays to you too!
How about using the vanguard market neutral fund as a benchmark?
ThAt's down 1% year to date. So again 18 contest participants would have beaten vanguard at the long/short stock picking game. The only problem is dividends and, I guess, expense ratio.
Cheers,

maybe i'm missing something, but i thought market neutral funds try to long and short stuff in the same sector or which have very high correlation otherwise. our picks for long positions and short positions in this contest don't necessarily reflect that strategy. for example, some of us are trying to beat the market (to a bloody pulp) by longing the stuff we like and shorting the stuff we don't like, regardless of correlations.

Interesting observation. Looks like you are correct about the vanguard market neutral fund. As per the latest report it does try to keep its sector positioning for longs and shorts pretty equal
https://personal.vanguard.com/funds/rep ... 2210063746
So what do you think the best benchmark is?

ideally, we'd have to benchmark our funds against a weighted index using various vanguard size-style index funds to approximate our tilt. however, since this is not a real competition after all, i'd make things easy and just go with taylor's suggestion of using the total u.s. market index.

[livesoft]

Fiscal Cliff Joy Fund
Long:
FIZZ
CALL

Short:
CLF
JOY

[zaboomafoozarg]

Fiscal Cliff Joy Fund
Long:
FIZZ
CALL

Short:
CLF
JOY

What you did there: I see it.

[Dovahkiin]

Black Hole Capital Fund:

Long:
SGEN
CAB

Short:
NFLX
BKS

[mikenz]

Dyspepsia Fund

long
EAT
FAST

short
GET
GAS

** GET is in your Russel 3000 list but seems to have changed ticker symbol to RHP