How to Use a Watchlist Henry Crutcher A brief intro to get more out of watchlists, which help you manage your holdings. Visit a watchlist How to use a Watchlist Your Holdings view is a collection of all your watchlists, gathered under title bars for each one. Here we show just one (FCA Dividends).…
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Highlighting Recent Backtests Even with advanced caching methods and multiple speed upgrades, highly complex screeners still take some time to run over the past 20 years. To combat the wait time – and allow you more freedom to analyze strategies and their underlying companies – we built the “Recent Backtest” section.…
High Piotroski F-Score A recurring name throughout our software and website, the F-score has been continuously tested under many different circumstances and never ceases to amaze me. It may be simplistic, but, when used correctly, can be a very powerful tool for your portfolio. For this Green Flag we want to look at the two calculations we have in the system for the Piotroski F-Score – Yearly and Trailing 12 Months.…
Share Buyback Programs A company purchasing back its shares tends to increase the stock price for a couple of reasons. First, it shows that the firm and its employees are confident in the direction the company is heading. Second, it cuts down on the shares available for investors to purchase, driving the price up through restricting supply.…
Sharing a lot of characteristics with the “Ultra Low Market Cap” red flag, looking for companies with a close of less than 2 gives you a number of companies whose market cap ranges from Micro to Small. These companies tend to have extremely poor fundamentals and also have a high probability of causing negative returns in your portfolio.…
Every time I get on the internet to try and find something new to learn about the markets I’m inundated with advertisements selling classes. These classes all seem to follow the same theme – they teach you how to become “rich” on penny and microcap stocks. Some people even get lucky and make some money doing it, but the vast majority is simply throwing money into a pit.…
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Investment Green Flags – Increasing Sales and High Asset Turnover
Revenue Growth and High Asset Turnover When it comes to finding green flags, sometimes the simplest idea is the best. In the case of our flag–Revenue Growth and High Asset Turnover–we look for just that. It’s self-explanatory that if a company brings in more money and sells units faster, its long-term price should increase.…
How negatively does a bad Beneish score affect your portfolio? With all of the recent articles regarding red and green flags, I realized I should begin writing articles on the flags within the score. One such flag, the bad Beneish score, is a key component of the red flags score.…
If you have been using the Equities Lab system in recent weeks, you may have seen a new error that hadn’t appeared before. ——————————— Stock Server Error:Server Error:Cannot compare split ajusted quantities to constants: greater(Close, 444) Don’t worry! This error message doesn’t mean that the system is down; it simply tells you that there is a split adjusted value in a place it shouldn’t be.…
It isn’t uncommon for one of our users to call us up and ask for help. To be honest, there have even been times when I will help a client at their site to get them up and running. In the past two years of working in this industry, I have noticed one major theme among every person(myself included) when it comes to screening for potential investments – we are all far too selective.…
Just how telling are red flags? The term “red flags” is synonymous with “bad things are going to happen,” and, for investors, they are a sign that you should likely stay away from that investment. However, all this talk of red flags being able to predict that a company is going to do poorly makes you wonder, does it work?…
Most anytime we analyze a company or build a screen; we use a number of scores that are pre-built in the Equities Lab system. These scores are tried and tested, but they lack that personal touch. I think it’s time we learned how to build our own scores within the software.…
Monte Carlo Simulation As investors, we all know that each investment we make comes with a certain amount of risk. We can decrease this risk by understanding all possible outcomes. Better yet, we can visualize each outcome through the use of a Monte Carlo Simulation. In a broad stroke definition – a Monte Carlo simulation allows for people to make informed quantitative decisions based on a range of possible outcomes.…
In my years of using Equities Lab as a quantitative investment tool, I have never lost sight of the core values of long term investing. Many of these values are in the teachings of Benjamin Graham and used by an idol of mine, Warren Buffett. Remembering this, no matter how much risk I take on in my portfolio, I always keep a subsection for value investments.…
In the past two years of using Equities Lab, I have never stopped experimenting. However, at some point along the way I found a few indicators that I trust and use more than others—essentially using those variables whenever I need to analyze a strategy. This is a time-consuming process, where you have to replot every time you create a new strategy, so we built a feature that allowed you to turn this: Into this: All with just a simple press of a button.…
SCTR – Technical Analysis The SCTR no longer gets the performance pictured here, even when backtested on the dates shown. This article is retained as a warning for why we no longer allow comparisons between split-adjusted Closing prices and constants, or ranking of split adjusted closing prices. The stocks with higher split adjusted closes in the past turned out to have lower SCTR scores. …
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.…
When I’m going through a testing process to check for a new update, my go to screen is “Close > 444”. This seems all fine and well, and will return companies that have a close greater than 444, but, believe it or not, this usage of “close” is incorrect. Within the Equities Lab system, there are two types of close – Close, and RawClose.…
How are investments like apple pie? Think back to the last slice of apple pie you have had. My last slice, eaten with my wife and two daughters, was delicious. It was out of this world. For me, it was the best apple pie. What makes it special? The recipe (passed down from my mother in law to my wife, Emily) is simple: Ingredients: 6 Granny Smith Apples 1/2 cup of sugar cinnamon nutmeg Four Pillsbury frozen pie crusts First question: why are we using four pie crusts for one pie?!?…