When betting long on an equally weighted portfolio, how could that bet be paired with a bearish (short) bet on another portfolio of equal number of stocks, not resorting to derivatives?
Suppose we bet long on a portfolio of stocks with positive estimate revisions. When we pair that with a short bet on a portfolio of stocks with negative estimate revisions, we expect that both bets would generally give positive results in increasing markets. In declining markets, even long bets on positive estim…
Recently we learned that hedging risks can be costly and backfiring.
In its simplest form, it appears to me that the complex position assembled by JPM included a bullish bet on an index of investment-grade corporate debt (corporate bonds), later paired with a bearish bet on high-yield securities (junk bonds), achieved by selling insurance contracts known as credit-default swaps.
The bullish bet appears to have assumed that U.S. corporations would be getting healthier as the U.S. economy streng…
Why not taking a chance in the stock market based on analysts’ and economists’ estimates? Very few of those estimates are on target. Most estimates are taken by surprise. In turn, these surprises invite you to take a chance on the stock. It’s like in the famous Abba lyrics where the choir of girls keeps singing “take a chance on me”, or like in the Keynesian beauty contest. Future looking statements in the financial markets are notoriously unreliable and seem to lur…
Today is May 5, 2012. Do you build your investments on such future projections of analysts and economist? Would you bet your own money on such horoscopes? Check out the accuracies of Zacks’ consensus estimates with Research Wizard. Do the same for analysts’ revisions of their estimates.
Future telling is big business. There are probably always some people who got it right, although that illustrious group continuously appears to change. The market appears to reward conservative estim…
Not even a few days before Apple reported its quarterly results gave one of the 47 analysts covering Apple the honor of being absolutely right with its estimates. Zacks’ Eric Dutram says it eloquently: The company saw profits come in at $12.30/share well above the Zacks Consensus Estimate of $10.03/share (http://www.zacks.com/stock/news/73661/apple-earnings-crush-estimates-again). Estimates that are off by some 25% in hindsight are unreliable. Although Apple’s fundamentals belong to …
What is all the fuss about one single stock?
Are we trying to convince small investors here to play the big game and joining the bets of the professionals? Joining those bets has a 12 year’s history of risking some deep dives of over 55%. Even great stocks like Apple took part in those dives, in all cases deeper than the S&P500. Those are the facts. The talk that momentum stocks may continue to rise is just talk. The talk that even conservative estimates of future projections of Apple…
I wrote it before; Net Margin of the S&P500 was peaking in Q2-2011. The past two reporting cycles it went down. The first signals of this new reporting cycle of Q1-2012 show a continuation of that development. Back in April of last year, Net Margin of the non-financials of the current S&P500 stocks was peaking at an unbelievable historical high of 8.6%. Never before was it so high for those companies. It peaked at 7% in Q3-2000 and at 8% in Q1-2007. The two dips in Net Margin following t…
There are 24 companies on Wall Street that returned at least 31x their original values during the 10.5 years between August 1, 2001, and December 31, 2011.
AAPL is “only” #14 on that list. It multiplied by almost 43x, versus NTES, being #1 multiplied by 236x.
Here is the list:
Ticker Multiplied …
StockScouter has been in operation since August 2001, and the 10 best of those are renowned to have rewarded 797% (22.5%/year annualized with real-time monthly rebalancing, http://money.msn.com/stock-broker-guided/10-stocks-to-watch-in-the-week-ahead.aspx).
MSN StockScouter rates 4160 stocks on the basis of technical and fundamental criteria. Rank #10 represents the best 133 stocks, some two thirds of those (93) presently have 4-wks average daily dollar volumes in excess of $1 Million.&nb…
Back tests can be made as reliable as you want. It is not the most challenging effort to program a reliable back test, and it doesn’t take a substantial program. The main sources of errors are the errors and voids in the historical data and the updating process of the Dbase. These two error sources are the major issues I have with the back tests of Research Wizard, and Zacks knows about those. I believe it is an excellent program for retail investors, pioneering in its approach, even accou…
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May 22, 2012
Edited: May 22, 2012
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