October 19, 2017

What is your definition of “high dividend?”

How high are “high” dividend stocks?

As the markets continue to lack volatility, a number of investors are attempting to find opportunities outside of the traditional growth stocks. This leads many of them to alternatives such as forex, options, etc. However, some investors are still attempting to find gains in the equity markets, and a number of them are doing so through looking for companies with exceptionally high dividend yields. I have a little experience in dividend investing, but not enough to give my thoughts on the matter without running a few tests.

Above we have created a simple stock screener that ranks all companies in the market based on their dividend yield and returns the top 25% of them.…

October 3, 2017

How to Long or Short Bitcoin

In a nutshell, bitcoin is either something as monumental as the introduction of the internet or as futile as the tech bubble of the late 90s. Bitcoin has been in the news for quite some time now, and over time, one begins to wonder if this is a bet you should be in on. Yet, perhaps your ignorance of this new asset may hinder you from taking that first long/short position—everyone has got to start somewhere. This article has one sole purpose, and that is to increase your confidence in opening a bitcoin position by going over the procedures and implications of opening a long or short position on bitcoin.

July 16, 2017

Semiconductors, where they’re going and where they’ve been

The semiconductor industry is an important one, in fact, if it weren’t for semiconductors then you wouldn’t even be able to read this. So what exactly is a semiconductor, and why should you care about them? A semiconductor, in a nutshell, is a materials product usually made of silicon, which conducts electricity more than an insulator but less than a pure conductor, such as aluminum or copper. Semiconductors are usually very small complex devices, and the industry is driven by who can become smallest and more complex at the fastest rate. Modern day semiconductors are very small and can be found in just about every electronic device you use from your smartphone to your washing machine.…

June 22, 2017

Survivorship Bias – How does it work?

I was recently lurking around an online investment forum when the following post came up –

I recently ran an experiment where I generated random 7 to 50-stock portfolios from the 500 largest U.S. traded companies and measured their performance over the past 10 years. All of the randomly selected portfolios outperformed the S&P500 and BRK.B in terms of compound annual rate of return. Has anyone else tried this experiment? I then convinced myself that it worked by looking at the Guggenheim ETF RSP that holds an equal weight portfolio of the S&P500 stocks. It too beat the S&P500 over the past 10 years.

June 17, 2017

Monte Carlo Simulation – Advanced Investing

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.

What does this mean?

First, we build a model we want to test. In the case below, that model would be the Screener of which we want to plug in different values for the Value Score.…

May 12, 2017

Relative Strength Indicator (RSI)

 

 

I’m not a big technical trader. That being said, a lot of people in the information age are, and because of that we have been sure to include a number of technical indicators within the Equities Lab system. One such indicator, the relative strength index(RSI), is extremely common among technical analysts, and I think it is time to put the RSI indicator to the test.

What is the RSI Indicator?

Developed by J. Welles Wilder, the Relative Strength Index is an oscillator that changes based on the price movements in a company’s share price. It suggests that a company is overbought if the indicator is above 70, and oversold when the indicator is below 30 – meaning that you should buy into a company at any level below 30 and sell/short at any level above 70.…

April 30, 2017

Beneish M-Score

The Beneish M-score was designed as a way to detect possible manipulation of a company’s financial statements. The score itself can be anything between –infinity and +infinity, though most scores fall between -10 to 10. Anything below -2.22 is considered a good score and suggests that the company is likely not manipulating their balance sheet. On the flip side, if a company has a score of greater than -2.22 the probability of manipulation increases. That being said, this score doesn’t necessarily prove that a company is manipulating their books. Rather it indicates how probable it is that a company is behaving in a fraudulent manner.…

April 10, 2017

Funds Vs. Investing Yourself

Every investor has their own preferred investment. Two of the most popular choices are investing in funds such as ETF’s, Mutual Funds, or Hedge Funds, and self-investing using a strategy that you’ve either built yourself or adopted from a well-known investor. It’s finally time to figure out which choice has more potential.

To keep the whole process short we’ve taken a pool of random value investment funds and a pool of random value based screeners within Equities Lab and compared the returns.

The Funds

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Using Fund visualizer, we compiled a list of funds that focus on value investments. Before we read into the chart too much, it is worth noting that these returns do not include any sales charges or maintenance fees that would be charged by your typical fund.…

April 5, 2017

Explaining Quantitative Investing

What exactly is Quantitative investing?

Investing is an extremely difficult endeavor regardless of your goals. It takes both intelligence and strong will in order to do it successfully. With the invention of the computer and the more widespread use of data science, people eventually realized that you could take out much of the human error when it comes to investing in favor of complex investment algorithms that trade based solely on math. For some of you old school investors that need to have that “feeling” about a company, this idea may terrify you, but let me explain.

Firstly, if you have any investments in mutual funds, hedge funds, etc.…

March 22, 2017

What is the Piotroski F-Score?

Piotroski F-Score

We mention the Piotroski F-Score in a lot of our articles, videos, and even within a lot of our prebuilt screens. So, it poses the question, what exactly is the Piotroski F-Score?

Created by a professor of Accounting at the University of Chicago named Joseph Piotroski, the score is used to identify possible investments.

 

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Here is the score built within the Equities Lab system using the Equihack language. For each line item that is deemed true a point is added to the score. For every line item that is not true, nothing is added to the score. The score itself is broken up into three different parts –

· Profitability – though not outlined in the editor, this contains the first four items of the score.…