- Wealth PMS (50L+)
We started Capitalmind Premium League [for CM Premium members] last year – a fantasy stock-picking exercise for Capitalmind Premium subscribers.
The idea was to put ourselves in the shoes of the fund manager and take bets on stocks to beat the market in the coming year.
But then, stock picking, in one sense, is a behavioural exercise; it’s not about picking what you like. It is more about sizing what others may like. In his beauty contest analogy, Keynes likened it with how participants would behave in a contest to choose the most beautiful faces from several hundred photographs.
The winners would be the ones chosen to be the most popular, and therefore contestants would be better off guessing the tastes of the majority. Then there is also this forward-looking aspect to the markets. You need to guess what the majority would prefer in the future.
While we wanted to have as much fun doing this exercise, the market has different plans in store. The year-long rally meant most portfolios did well.
Here is a round-up of the 2021 edition and announcement of the next one!
Financial Services, Index funds (N50, NN50, N100 ), and Consumer Goods stocks contributed to 45% of all the picks. The average returns of the stocks from these industries did not “considerably outperform” the Nifty 50.
Now, let’s see what actually worked out.
No one, in their wildest of dreams, would pick a power stock in the middle of the pandemic with worldwide lockdowns. But hey, few thought differently. Power stocks that gave a staggering 112% constituted just 1% of all the picks, followed by metals (3% of the total picks) that returned 105% over the year. “You can’t go wrong with IT” seems to be working well with CPL too, which gave 103% returns.
Drilling down further shows that the instruments where most participants bets didn’t even beat Nifty 50 except for Nifty Next 50. The popular conservative bet (of 2020) on Gold gave negative returns.
And, the stuff that worked didn’t get picked by even 2% of the participants. That’s one more indicator showing how difficult stock picking can be.
All the top 10 winners get Capitalmind goodies and bragging rights for the year coming by. Here is the leaderboard:
Objective – To step into the shoes of a fund manager/asset allocator with a 1-year view and try to beat the market with a fantasy portfolio. Note, this is a theoretical exercise and does not involve actual money.
Rules are basically the same as last year with some modifications.
We will share the winners 1 week before the 2022 Muhurat trading day. We’ll also share regular leaderboards to show how everyone is doing.
Premium members will receive an email with a link to a simple form to submit their fantasy stock picks. The link will also be posted on the slack channel.
Please make sure to enter your Capitalmind registered email id. Only entries received before 3.30 pm on 12th November 2021 will be eligible for participation. The portfolio will consider closing prices for 12th November as the buy price of the portfolios.
This Diwali, we’re offering new members the opportunity to experience Capitalmind Premium for the first time.
For 30% off on the annual plan, get complete access to