The Net Set's Standout Stock Pickers

-------------------
short Fund
see ranks at the top , we can start shoring for high P/E stocks link FSLR and other as a fund here
http://www.marketocracy.com

DERIVATIVE INSTRUMENT - Examples of derivative instruments are options or futures whose value is derived from something else, namely the underlying asset. Derivatives are not allowed in the Marketocracy competition.

-----------
Self-made investors who've achieved stardom online.

YOU DON'T NEED CAMERON DIAZ' LOOKS OR WARREN BUFFETT'S smarts to achieve stardom on the 'Net. Sometimes, it just takes a good eye for picking stocks -- the kind that SpecBear, TDRH and dwot possess.

Correctly calling the direction of the stocks in his virtual portfolio 83% of the time, SpecBear (a.k.a. Spectacled Bear) is numero uno in the 57,000-strong Motley Fool CAPS community (http://caps.fool.com) -- at least for now. No. 2, TDRH, whose picks turn a profit just as often, trails him only because SpecBear has made more selections. Meanwhile, dwot's 80% accuracy rating puts her 19th.

The usually anonymous bloggers (some asked Barron's to use only pseudonyms in print) who are considered All-Stars tend to draw a crowd: More than 2,100 groupies follow SpecBear's moves -- Motley Fool groupies being other CAPS players who try to draft behind the investing expertise of All-Stars by following their portfolios and blogs, and swapping news and ideas with them. "I get lots of insights from them, too," notes TDRH, a 40-year-old St. Louis-based sales representative named James Hill. He tracks the work of 40 other All-Stars.

Like all the investors mentioned here, TDRH has no professional investing background, but his personal portfolio has grown 6% so far this year on oil-service picks like McDermott International (ticker: MDR), versus about a 5% drop for the S&P 500 year to date. His market education began in the spring of 2006, when he first tried out his ideas on CAPS -- just one of many social-investing sites.

The sites are like an electronic version of investing clubs. Their names often suggest their mission: Marketocracy (www.marketocracy.com); Tickerspy (www.tickerspy.com); Social Picks (www.socialpicks.com), whose motto is "Invest Smarter Together," and StockPickr (www.stockpickr.com), where stars like Buffett are held up for emulation alongside community members who do the best job of emulating them. (Motley Fool's CAPS refer to colored hats awarded based on an investor's score of correct picks.)

There's usually plenty of news and research to be had, personal blogs and other ways to share ideas, and electronic cubbyholes for storing your investing inputs, from e-mails to articles. Most members like to check how they're doing frequently, so there's an investing simulation, with a variety of benchmarks. And winning takes commitment. SpecBear had to make more than 450 picks to get his ranking; TDRH logs a couple of hours a day. Dwot (née Deborah Wotherspoon) says she regularly spends four-to-five-hour stretches researching, reading or blogging about stocks.

HERS IS A FAMILIAR STORY. A high school teacher in Canada's Yukon Territory, Wotherspoon got tired of having professionals lose money for her. So she began building her own model portfolios in the summer of 2006, tripling her real portfolio's value in 15 months -- mostly on Canadian mining stocks -- before going to cash in the market peak last autumn.

Her investing philosophy isn't any more complicated than buying a stock she "likes," and selling when she doesn't "like it any more." No charting, no fundamental analysis -- just a careful shopper's sixth sense of what's hot and what's not. But the four to five hours a day she spends sifting blogs and news stories don't hurt.

Her approach is similar to that of T.J. White, whose virtual portfolios are among the most-watched on Marketocracy. Another self-made investor, White has a knack for putting obscure facts together -- concluding, for example, that global warming will impact copper prices by melting the glaciers that feed the streams that feed hydroelectric plants powering Chilean copper mines. His onscreen avatar, "auminer," reflects the days he panned for gold in the Rockies, before discovering his life's work as a puppy-sitter in a small town near Dallas. His portfolio, he says, throws off about $100,000 a year, affording the 39-year-old a lifestyle that his passion for animals never could.

White's secret is to focus on sectors that he understands: mining, industrial, materials and energy names that he calls "blue-collar, profitable, dividend-paying stocks." He steers clear of tech, biotech, pharmaceuticals -- anything subject to catastrophic "black swans," like a loss of Food and Drug Administration approval. He pays a lot of attention to an issue's net tangible asset value and price/earnings growth (or PEG) ratio, but not so much to its P/E or technical analysis, which he calls "voodoo." While his screens carry 7,000 stocks and his 15 Marketocracy portfolios total 300 to 400 names, White rarely holds more than a few stocks. Right now, mining-giant Freeport-McMoRan (FCX) dominates.

Spurning diversification, White says, "I don't want to put money into my sixth-worst pick." Surprisingly, his portfolio's beta is under 1.0, meaning it's less risky than the Standard & Poor's 500. His alpha is something else; White's materials portfolio has quadrupled in value in five years.

Know your strengths and sectors also is the motto of Rajan Rajen, 36, one of the most-watched members of Tickerspy. The San Francisco-based software engineer is a prolific portfolio-builder, reports Tickerspy's community manager, Max Magee, and Rajen's picks consistently garner the most eyeballs due to his spade work. Rajen identifies a sector he finds interesting, then digs deep into the companies and metrics that drive it. Although he's managing dozens of sector portfolios at any given time, he leans toward energy, commodities, materials, China and Brazil. His current favorite, Petrolio Brasileiro (PBR), has helped lift his own portfolio 5% this year.

Rajen, too, learned the old-fashioned way how markets work: by losing money, until he "got it." His voracious reading and casting of trial portfolios led him to his key investing insight: Good stocks in bad sectors don't do very well. The personal motivation for his hard work, besides money, of course, is to gain more insight into the world. "I just feel more comfortable in life after I've gotten a handle on some aspect of the market or the economy," he says.

Validation is a big part of the payoff on social-investor sites, which seem to be multiplying. Still in beta, Bullpoo (http://bullpoo.com) promotes "connected investing." Another new site, UpDown (www.updown.com), is building its membership by paying real dough to any virtual portfolio manager who beats the Standard & Poor's 500 in a given month.

If a dozen heads are better than one, imagine how well thousands gathered in an electronic square can do.