I'm hoping for one last push higher

With just one day left of this round of Strategy Lab, I'm hoping for one final push that will give me a little more distance between my portfolio of 20-stocks and most of the major indices.

Over the past week or so, I did get some help from a few of my retail holdings, including American Eagle Outfitters (AEO, news, msgs), Abercrombie & Fitch (ANF, news, msgs), and Jos. A. Bank Clothiers (JOSB, news, msgs), but a lot of that good performance was wiped out with today’s market decline.

Not all of my retail holdings have held up though; I'm down about 25% on JAKKS Pacific (JAKK, news, msgs).

But while JAKKS' decline is unfortunate, the fact that one of my holdings is getting beaten up isn't a shock and hasn't sent me into a panic. One of my objectives in this whole competition, as strange as it may sound at first, is to hit winners on about 55% to 60% of my picks -- not to get every pick, or even almost every pick, right.

It's impossible to win with every pick

I’m not expecting that each one of my portfolios holdings will increase in price; that's because no one -- not even the great Warren Buffett or Peter Lynch -- is right on all his or her stock picks. Instead, I know, and accept the fact, that there are going to be losing positions, like JAKKS Pacific

Martin Zweig, one of the Wall Street greats upon whom I base my strategies, says just that in his 1986 classic "Winning On Wall Street":

"If you are right 60 percent of the time, ride your profits, and rein in your losses, you'll find that when you're right you're very right, and when you're wrong you're only moderately wrong."

And he added, "In the long run, a 60 percent success rate translates into huge gains, a 50 percent rate into solid gains, and even a 40 percent rate can beat the market." So far in this round of Strategy Lab, about 57% of my positions have been winning ones according to my internal statistics. I’ll take 57% accuracy in a down-to-flat market, and I think Zweig would too.

A small loss is OK in a horrible market

As far as my returns, I’m pleased with the results I have obtained. As of Thursday, I was down just slightly over the last six months and that’s in a very difficult market.

And as far as the competition goes, this one has been quite a battle, with some very worthy counterparts.

While the market has really struggled since we started in late January (the Standard & Poor's 500 Index ($INX) and the Dow Jones Industrial Average ($INDU) were both down roughly 6% to 7% as of Thursday's close), three of the six contestants are in the black. One is up nearly 11%. It goes to show that we are dealing not with a single, monolithic stock market, but, instead, with a market made up of individual stocks. Good values can be found at any time and by using varying investment strategies -- regardless of whether the broader market indices are up or down.

Don't Give In To Fear

One of the key points to take from my experience, I think, is that investors shouldn't fear a crisis.

When we started this contest, there was a tremendous amount of fear in the marketplace. Financial firms were getting leveled with billion-dollar writedowns because of the subprime mortgage crisis, and high oil prices, a slowing economy, and food price jumps were threatening to derail consumer spending. As a result, financial and retail stocks were getting pounded -- and there were fears of an impending collapse of the entire financial sector.

But as the masses ignored fundamentals and overreacted to those fears, others were there to scoop up the bargains they left behind. That's what my models did, entering some of the more treacherous parts of the market -- namely financials and retailers -- and coming out with several strong gainers.

As for those predictions of all out catastrophe and complete financial sector collapse, they've yet to materialize -- and I don't think they will. The U.S. economy has been through all sorts of crises -- wars, terrorist attacks, bad-debt-triggered financial woes, presidential assassinations and resignations. The stock market has always bounced back, and investors who focused on good companies with solid balance sheets have come out of those crises with some excellent gains.

As we move forward, that's what I expect will continue to happen. Remember, while Strategy Lab is a six-month competition, investing in the stock market is a long-term endeavor. In the coming months, as the fears around financials subside, I expect that the undervalued stocks my models are currently targeting will realize some strong gains.

In the meantime, I'll continue to ride out the ups and downs, sticking to the proven strategies of some of Wall Street's best investors. That's how I've succeeded in the past, it's how I generated market-beating returns in this contest, and it's how I plan to continue beating the market over the long haul.

Thanks to Strategy Lab for giving me the opportunity and to all of the readers who read my articles and emailed in.

P.S. I’ve been invited back for the next round, and I’m looking forward to starting back up again in a few weeks.