Mark  sold 20 shares of Apple (shares that he did not own).  To do that, Mark had to borrow $2645.01, and this is shown as "Margin Cash" in the portfolio. 

Please explain the process. When did margin accounts start? Don't investors lose their capital gains break when they are trading their account on margin?

Here's a link to my portfolio on ManifestInvesting with updated shares. Prices as of 10/5/07

http://www.manifestinvesting.com/dashboard/5589

do you have the worksheet that shows returns for the five portfolios?

Joe, please clarify how you see the following situation ...

> [On 7/5/2007] Mark sold AIG in June so that he could short Apple: Mark  sold 20 shares of Apple (shares that he did not own).  To do that, Mark had to borrow $2645.01, and this is shown as "Margin Cash" in the portfolio.  Mark will have to repay this money, with interest, when he closes his short position, and we'll do the accounting for all of that when the position closes. <

It's been nearly 6 months since Mark shorted AAPL.  I think it's past time to (1) start accounting for margin interest and (2) define the circumstances that would trigger a margin call.

At Nov 23rd closing prices, the value of the four long positions in the portfolio ($3,422) are now less than the value of the short position in AAPL (-$3,431).  The total portfolio value is $3,678, of which $2,645 (71.9%) is borrowed.  That's getting very close to triggering (what I think is) a 25% maintenance requirement for a margin call.

In fact, looking back, I see now that with Nov 7th closing prices the total portfolio value was $3,436 (including the margin interest that should have already been paid would further reduce this value).  That makes the borrowed $2,645 equal to 77% of the total portfolio value.  It seems to me that should have triggered a margin call based on a 25% maintenance requirement.  Presumably, since the rules of the contest don't allow adding more cash, that would have forced the sale of some of the long positions.

-Jim Thomas

> At Nov 23rd closing prices ... The total portfolio value is $3,678, of which $2,645 (71.9%) is borrowed.  That's getting very close to triggering (what I think is) a 25% maintenance requirement for a margin call. <

The amount of the portfolio value that's borrowed has been above 75% evey day since 11/27.  Currently (12/4 closing prices), 78% of the portfolio value is borrowed.  Seems past time for a margin call to me.

-Jim Thomas

Seems past time for a margin call to me.

-Jim Thomas

Me too, please explain the process as I have no clue to the workings of shorting stocks, put calls, naked shorts or whatever those transactions accomplish. Are these more useful to traders vs long term investors? Also is there a worksheet that shows YTD returns?

> Also is there a worksheet that shows YTD returns? <

Joe keeps the official records for the contest.

However I track the portfolios too (and Joe and I compare notes from time to time).  I update http://www.bivio.com/irw/files/PublicFiles/StockCentral/scOverview.xls generally every weekend.  This shows a week-by-week graph of % appreciation in portfolio value.  For comparison, it also shows % appreciation in VTSMX and a "15% return" line.

At present, Danny, your portfolio is the only one of the five that hasn't lost money since the beginning of the contest.

-Jim Thomas

Thanks Jim that's what I was wondering about my total return. this includes dividends, correct?

Yes, it includes reinvested dividends.  At Nov 30th closing prices, your portfolio was worth $6,048, or 21% more than the $5,000 you started with.  21% is the value that's shown on the graph in the spreadsheet I refered to.  Just to be clear, the 21% isn't an annualized rate of return.  It's just the percentage change from the $5,000 that everyone started with.

-Jim Thomas

"It's been nearly 6 months since Mark shorted AAPL"

hmmm....I was under the impression that this contest was to employ our tried and true principles..........

"short selling"??????

by the looks of the graph the only "shorting" result I see is Mark's portfolio taking a long walk off of a "short" pier.

Go Danny!!

faith f.

reno, nv