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50% Annual Returns
- Thread starter alphastocks
- Start date
I have 5% of my equity in each position, so with my 80,000 account I will buy 625 shares of GTN on Tuesday.
Quote from Hamlet:
Thanks for responding to the questions. I posed this question as part of a two question post, but I do not believe that you answered it. If you prefer not to, I'd surely understand.
Is your fundamental criteria general in nature or related to some specific event or change which occurs?
If I didn't answer your question it was not intentional.
This is not 'event driven' so no it does does not rely on some special change to occur. It is a combination of various parameters, some plain vanilla such as: PE, PS, and Relative Strength and other more obscure elements that I am unwilling to unveil. Combined these qualities tend to attract more buyers that normal, which leads to a relatively strong rise a share price within a couple of months.
Quote from alphastocks:
If I didn't answer your question it was not intentional.
This is not 'event driven' so no it does does not rely on some special change to occur. It is a combination of various parameters, some plain vanilla such as: PE, PS, and Relative Strength and other more obscure elements that I am unwilling to unveil. Combined these qualities tend to attract more buyers that normal, which leads to a relatively strong rise a share price within a couple of months.
Thanks for sharing so much of your thinking. I remember a few years back there was a website called "stock-o-matic" which seemed to follow a similar concept and was offering it's system for sale to any institution that was interested. If I remember correctly the results were similar and could be followed along and verified with the daily buy/sell pick. One day the site dissapeared, so I assumed they did sell.
Quote from Hamlet:
Thanks for sharing so much of your thinking. I remember a few years back there was a website called "stock-o-matic" which seemed to follow a similar concept and was offering it's system for sale to any institution that was interested. If I remember correctly the results were similar and could be followed along and verified with the daily buy/sell pick. One day the site dissapeared, so I assumed they did sell.
I aim to please...
As this is a long only system I plan to unveil a short component soon so that a market hedge can be established.
Does your backtest include actual filled prices back from 2001 or does it just use the open and close on the day of the transaction? I have been successful using some specific screeners as well, the market hedge is the problem. I was just allocating a certain % shorting the spy, but in the end it ate up a lot of profits because the spy gains would never be realized. Do you short atm calls or otm calls as a hedge? How many months out do you go?
Thanks
Thanks
Quote from apex82:
Does your backtest include actual filled prices back from 2001 or does it just use the open and close on the day of the transaction? I have been successful using some specific screeners as well, the market hedge is the problem. I was just allocating a certain % shorting the spy, but in the end it ate up a lot of profits because the spy gains would never be realized. Do you short atm calls or otm calls as a hedge? How many months out do you go?
Thanks
The data in the backtest uses closing prices and is not an exact duplication of the actual performance, but a very close approximation, like most backtests are. Over several trades the difference between trading on the open or on the close becomes irrelevant, especially when holding a stock for 20 days.
As far as hedging out market risk the simplest thing to do is to use up to 2x leverage (normal for most retail accounts, expect IRA's) and short the MDY (S&P Midcap Trackers). I say the MDY because the stocks in the portfolio are mostly small to mid cap. A combination of this short hedge with the long portfolio will do very well indeed and it is very simple.
I use a combination of shorting stocks and writing calls. The calls are NOT on the stocks in the longs portfolio, rather naked calls on stocks that are resistant to strong upside moves and that provide ample premium. They are usually out of the money by 1 increment and about 40-60 days from expiration. For example I am short CMI ID (120 Sep Calls on CMI) at 4.5, which provided 3.8% yield.