Diary of a stock market loser

By The Motley Fool

I've been keeping tabs on my attempt to claw my way into respectability in MSN CAPS. Here's how my ratings have clocked in over the past five weeks:

• Week 1: 0.55
• Week 2: 0.51
• Week 3: 1.35
• Week 4: 1.03
• Week 5: 1.54
• Week 6: 2.33

Unfortunately, the ratings don't go from 0 to 3 or 0 to 5 here. This is a percentage scale. Even though I'm glad to see my rating improve to 2.33, it only means I'm faring better than 2.33% of the other players.

Let's go over some of my recent picks and pans in my modest attempt to get back on track. Or, absent that, to get off the track -- so I don't get hit by an oncoming train.

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As I write this, all three of the new positions I initiated the previous week are in the green. I made the picks in anticipation of their upcoming earnings reports, and I nailed all three. I hope that doesn't sound like bragging. When you're down in the dumps, like my CAPS rating has been for a couple of months, you have a tendency to cheer a little louder when things go right.

Ctrip.com (CTRP, news, msgs) led the way. I figured that the leading Chinese travel Web site would fare well, given the healthy reports other Internet companies in China turned in, and I was right.

The stock soared Feb. 28 after the company posted better-than-expected fourth-quarter results.

Banking on the continuation of that trend, I tagged 51Job (JOBS, news, msgs) with an "outperform" grade. The Shanghai company publishes regional job listings once a week in dozens of local publications and on its own Web site. China's economy is still growing strong, and the demand for new hires is spurring motivated workers to look for better jobs.

I also went against the herd Feb. 28 by branding Salesforce.com (CRM, news, msgs) with an "underperform" rating. The company was soaring on the heels of a monster quarterly report and buyout rumors, but I think the shares are insanely overvalued, even with its 50% top-line growth.

I put little credibility in the buyout rumor because salesforce.com is on a roll. It has no reason to sell unless it receives a monstrous buyout premium, and I don't see too many companies anxious to pay a hefty premium on top of a stock that already trades at hefty premium. The company may have pioneered the "cloud computing" wave of Web-stored enterprise software, but the few companies big enough to make a play for Salesforce are also likely to carve out the market organically before shelling out $8 billion to $12 billion for the San Francisco company.

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My other new position was to go long on Jupitermedia (JUPM, news, msgs). I hopped on it the moment Getty Images (GYI, news, msgs) agreed to be acquired by private equity group Hellman & Friedman.

Jupitermedia isn't as big as Getty when it comes to digital images, though it's enough of a sympathy play, given that Getty was in talks to acquire Jupitermedia last year. Talks broke down, but now Jupitermedia may follow Getty into the pockets of another company looking to cash in on digital images.

I also recently closed out a position. I had gone bottom-fishing and hooked Thornburg Mortgage (TMA, news, msgs) a few months ago. I was fortunate enough to get in after it collapsed into the single digits during the subprime meltdown.

Thornburg was starting to climb again, but shares were rocked in late February after the company began dealing with margin calls. Investors who felt that the worst was over after a series of write-downs and dividend cuts suddenly got cold feet.

I decided to follow. My paper gains were wiped away clean, though I consider myself lucky to have gotten off with just a little scrape.

What will I do next? You're welcome to follow along on my CAPS page to see how I'm doing.

Another thing you may want to do is to give MSN CAPS a shot. The moment you start you'll be way ahead of me. It doesn't mean that I'm going to stop fighting just because there's one more person ahead of me.

I'm not going to rest until my rating grows respectable. See you there!

This article was reported and written by Rick Aristotle Munarriz for The Motley Fool. At the time of publication, he owned none of the stocks mentioned.