February 25, 2017

About Rebalance Periods

What is rebalancing?When you first start screening and backtesting for companies you are going to be presented with a number of different variables that need to be decided. One such variable is the rebalance period. Think of a rebalance as the following.– When a portfolio is rebalanced it is assumed that all positions within that portfolio are sold, and all companies that are returned by the screener are purchased at the same weight at the same time. This activity is portfolio wide and doesn’t include individual position management.Within the Equities Lab system, you can adjust the rebalance period within the trading rules tab.…
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February 24, 2017

How Important is the Bitcoin Rally?

BitcoinBitcoin, we’ve all heard of them, and some of us even have a few. Personally, I’ve been a huge fan of the coin since early 2011 when the coins were trading at less than $5. I actually distinctly remember picking a number of them up at below the $1 mark. Where are they today? A single coin is currently trading for roughly $1200 – that’s some serious appreciation.Bitcoin since 2013BTC-e has been tracking the price of bitcoin and placing it into a quandl data set since the middle of 2013 even though the coin has been around since 2008, so we will work on this time scale to address just how investable BTC is.…
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February 20, 2017

Why are Large Caps still Increasing?

Why is Large Caps Increasing when their Earnings Haven’t Changed? It would make sense if a company’s share price increased roughly in time with earnings and profits. It’s simple, logical, and based purely on the core fundamentals of the company. This logic even worked between 1995 and 2012 as shown below.  Most everything moved in line with the overall performance of the screen. They may have larger movements in either direction, but the general shape matches up pretty well.So what does it look like after 2012?  There is no rhyme to this rhythm. There is honestly no way to explain this sort of behavior from simply looking at the fundamentals of the company.…
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February 14, 2017

Buying at the high vs. Buying at the low

Buying at the high vs. buying at the low For this article we are going to need two extremely simple screens. The first screen looks for companies who have just reached their 52 week high, while the other screen looks for companies who have just reached their 52 week low. The goal, to figure out if you should buy high and sell higher, or buy low sell high. New Highs Screener  Like stated in the first paragraph, these screens are incredibly simple. For the new high screener we are just looking for all companies whose previous close was greater than the highest close within the past 251 days.…
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February 10, 2017

Investing in Government Contractors

Government ContractsThere is no bigger consumer in the United States than the federal government. The sheer amount of money the government spends on subsidies and goods is enough to make any business’ mouth water. The Screen ItselfHow should we go about finding companies that are likely to be receiving government contracts?  We first start with four industries that we know the government spends a lot of money in. · Waste Management· Aerospace and Defense· Agriculture· Regulated Utilities When I think of the government, one of the first words that come to mind is stability to some degree.…
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February 6, 2017

Bringing Technical Analysis into Value Investing

Bringing Technical Analysis into Value InvestingThough I’m a strong believer in the fundamentals, and will die by the principals that fundamental investing works the best, I do have to admit that there are some virtues to technical investing. This is especially true when we look at how technical analysis can help us build and maintain our more fundamental and value based strategies.  The Trending Value has a very simplistic editor. Basically, for a company to pass, they just have to have a market cap of greater than 15% of the companies within the universe, and have an O’Shaughnessy VC2 score of greater than 90% of the market.…
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February 2, 2017

Protecting Your Portfolio in a Possible Recession

Recession ProtectionAs people become more jumpy when it comes to the market, I decided to take it upon myself to build a screen that we could use in order to protect ourselves in the event that we do enter another recessionary period. Now, I want it to be known that I don’t necessarily believe that another recession is imminent; rather, I just like being prepared for any situation.Sadly, there are only two recessions over the past 20 years, so we don’t have a ton of data to work with which results in a lot of guesswork and relying on fundamental factors to find companies that are secure rather than trading via speculation.…
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February 1, 2017

StockChart’s SCTR Really Knows how to Rank Technical

SCTR – Technical Analysis Equities Lab has historically focused our screening efforts on identifying companies with strong fundamentals that are undervalued in the market, and investing in that value. However, as time goes on we want to push both our own investment philosophies and our system capabilities. After looking around for a bit I stumbled up the SCTR, the StockCharts Technical Rank.Originally the brain child of Mr. John Murphy, an author and contributor on StockCharts, this score is based on six different indicators weighted according to term.Alright, let’s talk about the actual screen.This entire screen is based on one thing – the SCTR formula.…
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January 30, 2017

Market Momentum

   Unless you’re living under a rock, you’ve probably heard the news about Dow 20K.  You might be asking why Dow 20K matters and what it even means. Well, Dow 20K is a major milestone for the Dow Jones Industrial Average. The Dow Jones Industrial Average has been around since May 26, 1896, and is an index of 30 large publically traded companies based in the United States to give investors a general idea of how those stocks were traded on a day to day basis. The Dow is built up of notable companies such as Apple, Goldman Sachs, Boeing, IBM, Nike, The Home Depot, Coca-Cola, etc.…
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January 27, 2017

The Curious Case of Sudden Past Growth

The Curious Case of Sudden Past GrowthWith every screen that is released into the Equities Lab system, we go through a verification process to make sure that the results aren’t just because of some random fluke. This process contains a six steps, and is how we check each of our screens. You can learn more about that process in the dedicated stock screener validation article.  At face value this screen looks incredibly promising, returning over 1250% in the past 17 years. But we should never take anything at face value. Let’s first figure out what this screen is actually looking for.…
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