Our Super Bowley Fantasy DRAFTs Are Proving One Thing
Over the past two quarters, my great friends and StockCharts.com colleagues Grayson Roze, Julius de Kempenaer, and David Keller have joined me at EarningsBeats.com in our first two Super Bowley Fantasy Stock Draft Challenges.
The StockCharts Technical Rank (SCTR) Team has also participated in both drafts, choosing the highest-ranked stock in SCTR score order at the time of its selection. The purpose of these drafts is twofold: first, for education, and second, for bragging rights. We're all ultra-competitive, so it's an opportunity for the public to see what stocks we really like as of a particular date.
After two drafts, one thing is absolutely clear. Relative strength is a winning formula. As a group, we've crushed the S&P 500 in both drafts. The SCTR Team, which arguably is a pure relative strength and momentum indicator and also an exclusive feature at StockCharts.com, has beaten the S&P 500 by 10 percentage points in each quarter. And you can't invest any easier than by following StockCharts.com's SCTR scores. They're published daily, ordered by strong relative strength to weak and by asset class.
Our results in the first two quarters are even more impressive when you consider that a particular stock can only be drafted once. So if a hot stock like SanDisk (SNDK) is selected by Grayson, Julius, Dave, me, or the SCTR Team, it's unavailable for the rest of the group. In theory, we're lining our portfolios with 50 different individual stocks cumulatively across our five portfolios, not exactly a recipe for outperforming the S&P 500. Diversification makes outperformance much more unlikely. Yet, as a group, we've smoked the S&P 500.
Julius won our inaugural event, posting a solid 13.42% return during a period (November 17th through February 6th) where the S&P 500 gained just 3.26%. In our second challenge, the SCTR Team posted the winning portfolio, gaining 19.25% from February 9th through May 8th. The S&P 500 had a nice quarter as well, jumping 6.96%.
In both drafts, our average portfolio performance (among Grayson, Julius, Dave, me, and the SCTR Team) easily outgained the S&P 500. In the first draft, we averaged a 7.90% gain vs. the S&P 500's gain of 3.26%. In the second draft, we enjoyed an even larger level of outperformance, with our average portfolio jumping 14.14% vs. the S&P 500's 6.96% gain.
The bottom line is that we've drafted some exceptional stocks overall, and we all rely significantly on relative strength.
Best Picks from Super Bowley Draft Challenge #1
First, I should mention that David Keller was unavailable for this draft, so Grayson, Julius, and I squared off against the SCTR Team for bragging rights. The draft order was determined randomly, and Julius had the first draft pick. He wasted no time, absolutely nailing the first pick of the draft, Applied Materials (AMAT). AMAT had a stellar quarter, surging more than 44% and helping Julius secure the first Super Bowley Championship. Here's a chart of AMAT, highlighting the period that Julius "owned" AMAT.
The best pick in the draft, however, belonged to the SCTR Team. While Julius, Grayson, and I all shied away from SanDisk (SNDK) after what we thought was a monstrous run and very overbought conditions, the SCTR Team never flinched. It drafts stocks based on SCTR scores and does not succumb to emotion. When it was time to draft a technology stock, the SCTR Team dove into SNDK, which returned an astonishing 136% in less than three months. A return like that will carry your portfolio, which it did for the SCTR Team. Check out this SNDK chart.
Both of these selections were massive relative strength winners, highlighting one of the best ways to take your investing to the next level. My best selection in this draft was also a semiconductor, Advanced Energy Industries, Inc. (AEIS), which jumped 36.52% during the period. Grayson's best selection was GE Vernova (GEV), a 36.11% winner.
Best Picks from Super Bowley Draft Challenge #2
Julius de Kempenaer, the reigning champion from Super Bowley Draft Challenge #1, was unavailable for this competition.
I thought I had won our second challenge. I wrote to everyone, indicating that the challenge ended on May 1st and provided the draft's results, which had me in first place. Unfortunately, I later realized that we had originally agreed to run the challenge through May 8th, and the additional week was long enough for the SCTR Team and Grayson to edge me out. We gotta stick to the rules, so congrats to the SCTR Team, which produced an incredible 19.25% return in just three months, easily outdistancing the S&P 500, which gained "only" 6.96%.
So how did the SCTR Team do it? Yep, you guessed it. SanDisk (SNDK) once again elevated the SCTR Team's portfolio by rising a remarkable 163.84% during the quarter. Here's how SNDK looked last quarter, and check out that extra week from May 1st through May 8th. It was a dagger for me!
Grayson also passed me in the final week, thanks to another absolutely sizzling semiconductor stock, Intel Corp (INTC).
My best selection of the quarter was Viavi Solutions, Inc. (VIAV), from the red-hot telecom equipment group. VIAV rose 94.35% during the quarterly competition. Meanwhile, David Keller's top-performing stock for the quarter was Jabil, Inc. (JBL), which produced a very healthy 38.21% gain.
Super Bowley Draft Challenge #3: Time To Do Our Homework!
We are now gearing up for our next draft, Super Bowley Draft Challenge #3! And this time, we'll have the entire cast of characters as Grayson, Julius, and David will join the SCTR Team and me for what should be the most exciting draft yet!
If you're not doing anything on Monday at 12pm ET, please plan to join us. It'll not only be educational, but likely entertaining as well. We like to bust each other's chops a bit. Out of all of it, however, will (probably) come 50 of the best stock selections available. It's very interactive, so feel free to jump in and bash my picks (or any of my cohorts) as we try to outmaneuver the others and claim the Super Bowley Draft Challenge #3 trophy!
For more information and to register for this FREE LiveStream event, CLICK HERE! There are sure to be some nuggets of great information and superb stock picks! Have a great weekend, and I hope to see you on Monday at 12pm noon ET!
Happy trading!
Tom
