With the first half of 2017 behind us, we enter the 3rd quarter in full summer mode! As you pick out your golf clubs and set forth to enjoy the beautiful weather, take a moment to sit back and enjoy these statistics.
This article will focus on the numbers for the first half of the year. A full breakdown of the rules and a brief history of the contest is available here:
Contests are located on my website www.EPstatistics.com. Simply click on the StockContest link. The contests are updated every Friday after market close.
First, a quick recap on the first quarter results (Jan 1 to March 31)
We started 2017 strong, peaking in February and ending the first quarter with a whopping 31% average portfolio in the Safest2X-BaggerContest and a very healthy 22.5% average portfolio in the CEO.CA StockPickingContest.
And then... we entered the 2nd Quarter of the year.
All three contests gave up over 10% although the GDXJ and TSX-V also took serious hits. Combining both images the trend is more apparent. Note the GDXJ & TSX-V have nearly returned all their gains on the year.
The graphs above show only 'the average portfolio gain'. The issue with this is an outlier can mask the truth. So we look at the 'spread,' which indicates how each individual portfolio performed. For the following graphs, I am using the http://epstatistics.com/stockpickingcontest.php data only as it is the largest contest (with 146 participants) and is by far the most followed.
Notice the shape of the curve as well as the number of portfolios above 50%.
Comparing the two distributions we see a flattening of the curve as well as a shift to the left. Also, we see less portfolios above the 50% line.
CUMULATIVE DISTRIBUTION CHART:
At first glance, the chart is misleading. But fear not, it is quite informative. Remember there are 146 participants. The chart indicates 'how many participants are below a certain value.' I've highlighted a RED vertical line at the 0% mark as a reference point for example 1.
Example 1: At end of Q1, 32 portfolios had negative gains. By end of Q2, the number rose to 67 portfolios.
Example 2: At end of Q1, 24 (146-122= 24) portfolios had above 50% gains. By the end of Q2, the number fell to 17 (146-129 = 17)
VOLATILITY IN THE INDUSTRY:
The CEO.CA StockPickingContest rules are simple: Choose 3 companies, the highest return portfolio at the end of the year wins.
As of June 30th, only 19 of 146 portfolios (13%) have all 3 picks still in the positive. In other words, 87% of users have at least one stock pick that is in the negative (this is why we always diversify!)
In fact, looking at the top 10, only 3 users had all positive picks.
In my opinion, this stat speaks volumes about the risk in the industry. It appears that maintaining all 3 positive picks is a difficult thing to do. Congratulations to the users who have done so.
If these statistics aren't shocking enough, As of June 30th, 2017, LESS THAN HALF OF THE COMPANIES IN THE STOCK PICKING CONTEST ARE POSITIVE SINCE JAN 1, 2017!
There are 255 companies (unique tickers) in the contest. From those, only 120 of them are positive (120/255 = 47%).
CONCLUSION: @Excelsior stated: Most of the #PreciousMetals stocks had a positive Jan/Feb but have drifted sideways to down for the balance of the first half of 2017, which is par for the course. The GDXJ re-balance didn't help investor sentiment out with the #producers and #developers, and was a further drag on the PM stocks. There were a few #Explorers that bucked the trend, and had out-sized gains. This is why positioning in a few explorers can a boon to a portfolio, but clearly most explorers don't make it to be a mine longer term. The #Uranium stocks started their move in late 2016, but climaxed in Jan/Feb as well. Since then most Uranium stocks have been taken to the woodshed as a comment on the overall trend. It will be interesting to see if Uranium's move back down below $20 spot price marked the double-bottom that so many commentators have anticipated. If so the 2nd half of 2017 may be more encouraging in this sector.
The sectors that have fared the best so far were the #Zinc stocks, some of the #Battery Tech stocks, and the occasional #exploration success story. Back to #Gold & #Silver stocks, typically June/July are weak for the PMs on a #Seasonality basis, but things get moving from August-October. We'll see how that plays out for the balance of this year.
It will be much more interesting to see which stocks take off with the larger percentage gains during that time period. Currently, we are still working through the remainder of the #SummerDoldrums, and sentiment is starting to get washed out.
Looking forward to the 2nd half of 2017 where we'll see the real fireworks.