Marketocracy Portfolio Update

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A few weeks back, I received a request to post the stock selections I use in my 3 Marketocracy funds. Today I updated my funds, and I like to share with the board the changes I made to the 2020 portfolio, the most aggressive of the 3 funds, as well as some background information.

Here's the description of the 2020 fund from its public Marketocracy page. Link to public page: <http://www.tinyurl.com/9b35z>

**Individual stock selection is based upon statistical analysis of three factor groups: growth, valuation and momentum. Multiple components comprise each group. At the fund's inception, the top 20 ranked stocks from a universe of approximately 2,000 stocks were purchased. Twenty stocks always comprise the non-cash portion of the fund, and each stock constitutes approximately 4.95% of total fund value at the time of its purchase. A stock in the fund is held for as long as it remains in the top 20 ranked stocks from a universe of approximately 2,000 stocks. A stock that falls from the top 20 group is sold and replaced with the highest ranked stock from the current top 20 group that is not already represented in the fund.**

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Here's the performance history of the selection
process used for the 2020 fund.

1986: 35.4%
1987: 1.4%
1988: 29.6%
1989: 44.8%
1990: 9.3%
1991: 110.8%
1992: 18.9%
1993: 20.7%
1994: 3.5%
1995: 62.4%
1996: 50.9%
1997: 25.5%
1998: 52.7%
1999: 45.2%
2000: 40.8%
2001: 18.0%
2002: -8.1%
2003: 50.7%
2004: 31.4%
2005: 39.2% -- YTD 11/04

Listed below is the current 2020 fund, after today's changes, and the individual buy/hold/sell decisions.

TICKER ACTION

AAPL buy
AET buy
BER buy
CAE buy
ESI buy
GS buy
HAR buy
JWN buy
SNDK buy
STT buy
UFPI buy
WSO buy
XTO buy

BMHC hold
BVF hold
CRDN hold
ESRX hold
FTO hold
LEH hold
VLO hold

BJS sell
BR sell
CKP sell
CMX sell
COG sell
DVN sell
ECA sell
EXP sell
ITG sell
LMS sell
PCP sell
TTI sell
VPI sell

Here's a quick diversification review, based upon Marketocracy's categorizations and current data.

NOTE: The 2020 public page will not reflect the *current* information until Tuesday, 11/08.


Current/previous positions weights by sector/industries (%):

20.6 / 0 Capital Goods
20.3 / 11 Financials
20.1 / 5 Consumer Discretionary
15.4 / 17 Health Care
13.6 / 43 Energy
10.1 / 5 Information Technology

Current/previous position weights by style (%):

25.2 / 24 Large Capitalization
40.3 / 25 Medium
24.5 / 40 Small
10.0 / 10 Micro

54.8 / 44 Value
19.9 / 29 Blend
25.3 / 26 Growth
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The above information should be enough to generate some discussion. I really don't know if there will be sufficient interest on this board to warrant timely updates going forward. I guess we'll see.

Comments? Questions?