The most excellent way to pick great stocks

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Quote from man:

No offense happened here so far why start with it?

Mr.Market
I am interested in what you would think about making your approach market neutral by either selling futures on a beta neutral basis, or try to work out a short selling approach on single stock basis. maybe using short interest as one main variable.

what do you think.


peace
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I really like your idea of selling market futures against these stock purchases. (I mean I really really like it). The reason is that the aforementioned method has outperformed the overall market in each of the last 12 years that I have been using it.

I'm not smart enough to properly time the market, although I think I am quantitative enough to find stocks that will outperform the market.

If I had been smart enough to sell futures against each of my purchases, I could lock in this delta.

Thanks for your insight!!!!
 
Quote from freealways:


Even if you had found the holy grail and Jesus Christ was standing next to you with his arm around you, I would be most surprised if most people didn't have similar feelings.

I wouldn't have bothered to look at this thread had I known you started it.

As far as I am concerned you can have this present thread all to yourself.

Freealways
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You are entitled to your opinion. There are 253 people in my Yahoo Group who feel quite the opposite:

http://groups.yahoo.com/group/mrmarketishuge/
 
Quote from Girlpower:

Mr Market

I hope all the previous antics can be kept out of this thread and there can at least be some discussion of the method.

You've acknowledged that this method was designed to take advantage of the bull market conditions that existed at the time, and as we all know, market conditions are now far from that.

Perhaps you could describe both your entry and exit criteria in more detail and how you time your purchases and subsequent sales. What measures you use to limit your losses and cull non/bad performers from your list/portfolio.

This could go on to talk about many more aspects, but that is a start. Hopefully this can remain on-topic.

Natalie
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I keep a portfolio of 14 stocks. When a stock hits my sell target (usually 15 - 20% gain in less than 6 weeks), I will sell it. I then re-run my model and replace that stock in my portfolio.

Presently I do not use stop losses. I have found that most of the stocks I select eventually turn around and do hit my sell target. The reason for this is I am buying stocks with rock solid fundamentals (I know this is a trading board, but there IS a reason why some companies make money). If a stock's price falls while its earnings are rising, it means it's a better value...so I hold it. If its fundamentals ever change, then I'll dump it faster than last night's chili dinner.

I hope I can keep this on topic too. I'm not the one that starts this nonsense.
 
Quote from mrmarket:



You are entitled to your opinion. There are 253 people in my Yahoo Group who feel quite the opposite:

http://groups.yahoo.com/group/mrmarketishuge/
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Sorry, what was the link again? Could you post it like... another 20 or 30 times? Because we NEVER tire of seeing the worthless string of characters that mean so much to you and so little to anyone else... and yeah yeah, where's my yahoo group, post my pic on uglies.com etc. etc. etc.
 
Quote from man:

sorry if I missed it. what about stock liquidity. you said take the top 200 performers, but which universe from.

I have the feeling that this approach could be enhanced by widening the portfolio in order to protect against higher default risk in small cap stocks. why not trade one hundred stocks on a quarterly basis and betting a big cap future against it. by means of this one could capture the momentum and the small cap effect at the same time. why not test it on historic data.

girlpower. thanks for being here.


peace
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I mostly look at IBD stocks and this stock screener:

http://investor.stockpoint.com/leftnav/pages/stockfinderpro.asp?ClientID

Mr. MAN....I think you are on to something here. You remind me of Prof. Donald Keim (who I studied the January Effect under). He preferred dealing with databases of stocks rather than individual ones.

I guess I'm just a fundamentalist in nature and like to see what makes a company tick. As a result, I get a little more thrill out of seeing why a company is making its earnings growth and betting that this will continue...thus, my final screen in my model.
 
Quote from Vishnu:

What happened to your system since March, 2000. My guess is buying stocks at their 52 week highs hasn't worked out so well since then.
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You are incorrect. From January 1, 2001 through December 31, 2003, I had 53 consecutive closed profitable trades of 15% or better.
 
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