Update On Marketocracy Portfolio

My portfolio was started on 1st August 2008. Marketocracy lets you manage a virtual portfolio of $1M in a simulated trading environment, allowing you to track your performance accurately and compare your fund management skills to other investors and professional fund managers. Yes, they do take into account transaction cost as well. If your track record turns out to be one of the best, you could be hired to help manage a real fund at Marketocracy. It's a great place to learn, and a great place to prove your talent. They also have important rules to ensure that you are running an actual investing portfolio and not just sitting on cash:

• No position can exceed 25% of your total portfolio value.
  
• Half your portfolio must be comprised of positions under 10% each.
  
• Your cash position isn't limited by this guideline, although you must be 65% invested

My fund was smartly called SMF, or Salvador Mutual Fund (no, not the foul language acronyms you are thinking). So far so good, although the first couple of months was iffy. SMF fund performance in orange colour.

The main objective of the fund is to beat the S&P 500. For the past 6 months, the S&P 500 has lost 6.58% while my fund has gained 27.3%. There are usually rules which dictate that you must be at least 60% or 80% invested at all time, and your aim is to beat the index. If you can consistently beat the index, you should be golden. If you look at the turnover rates, I have increased the trading activity over the past two months as I think the recovery is still volatile and is more suited to be traded.

modern portfolio theory, you basically aim to beat the index, based on the premise that:

over the long run stocks offer superior returns

hence if you consistently beat the index, over the long run, you should have superior returns

SMF m100 S&P 500 DJIA Nasdaq

recent returns
		RETURNS Last Week 3.55% Last Month 25.13% Last 3 Months 30.78% Last 6 Months 27.34% Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception -11.71% (Annualized) -15.71% S&P500 RETURNS Last Week 1.04% Last Month 11.39% Last 3 Months 2.55% Last 6 Months -6.58% Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception -29.75% (Annualized) -38.40% RETURNS VS S&P500 Last Week 2.52% Last Month 13.74% Last 3 Months 28.23% Last 6 Months 33.93% Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception 18.04% (Annualized) 22.69%

alpha/beta vs. S&P500
		Alpha 34.99% Beta 1.12 R-Squared 0.78

turnover
		Last Month 119.32% Last 3 Months 163.76% Last 6 Months 189.82% Last 12 Months N/A

Symbol Price Shares Portion of Fund Gains Today Inception Return EXM $7.24 8,000 6.32% $34,961.48 3.72% 36.83% KBH $16.59 6,500 11.99% $19,730.30 1.90% 22.39% ERX $26.85 3,000 8.95% $20,702.75 1.94% 21.09% BRCD $4.58 15,000 7.76% $8,139.56 0.22% 13.44% UBET $1.80 20,000 4.08% $6,590.86 0.00% 11.02% QSII $49.80 2,000 11.39% $5,127.90 -0.93% 5.43% DLTR $43.46 2,000 9.87% $4,022.24 -0.28% 4.85% GCH $9.52 7,157 7.72% -$3,331.55 -0.85% -3.80% ACTG $4.18 12,000 5.60% -$5,661.30 1.55% -5.93% WFR $15.47 6,000 10.51% -$12,943.44 0.06% -12.24% FXI $32.55 2,000 7.46% -$25,322.00 -1.17% -28.00%

p/s photos: Xu Jinglei