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October 23, 2018
The Gordon Growth Model

Financial Valuation: Gordon Growth Model

The Gordon Growth model is an offshoot of the standard dividend discount model. This model is used primarily to calculate the intrinsic value of a firm based on the discounted value of future dividends.

The Equation

At a basic level the Gordon Growth Model is calculated by:

P = D1 / r-g

  • P = The intrinsic price you should pay for the firm
  • D1 = The dividend for the next period
  • R = The current discount rate, for our purposes we will use the CAPM for this
  • G = Is the dividend growth rate


Applying the Gordon Growth Model

So, we know how this is calculated if you are doing this on a sheet of paper, and if you don’t have the data there may be some pieces of information that you need to assume.…
October 16, 2018
CAPM Explained

CAPM – Capital Asset Pricing Model

CAPM – Capital Asset Pricing Model

The CAPM is a staple of most every finance course that focuses on the valuation of equity investments. And though it may be a very good way to begin the process of teaching students how to effectively analyze securities there are a lot of assumptions that make it very difficult to use in a real world setting.…

August 15, 2018
This article pits Equities Lab and Gurufocus against each other, to determine which one deserves the individual investor's loyalty. This is simple, once the criteria for a "good" backtesting tool is specified.

Equities Lab vs. Gurufocus: Which Backtest Software

 

This article pits Equities Lab and Gurufocus against each other, to determine which one deserves the individual investor’s loyalty. This is simple, once the criteria for a “good” backtesting tool is specified.

 

Investopedia.com states that backtesting is “the process of testing a trading strategy on relevant historical data to ensure its viability before the trader risk any actual capital.…

June 20, 2018
Why Death Crosses Don't Work

Death Crosses Don’t Work

OK, what is a death cross, and what do I mean by “it doesn’t work”? A death cross is a (very) vivid name for a short term moving average slipping below a longer term moving average.  Technical analysts love to sell when they see death crosses, and buy when they see golden crosses.…

June 6, 2018
Short-term reversal

F-Score and Equity Short-Term Reversals

Quantpedia Strategies

As I was recently looking around at other quantitative firms, I happened across Quantpedia. In the past we’ve spoken to Quantpedia and are actually featured on their website. However, this time around I was taking a look in their screener section and came across the “F-score and Equity short-term reversals”.…

March 26, 2018
Using Monte Carlo with Piotroski

How To Use Monte Carlo With The Piotroski Score

Henry Crutcher

How to analyze a factor without ranking in Equities Lab

Create a screen

Everything starts with creating a screen.  So, onward!

Name your screen

Screeners with names can be found later.  If you want to put your screens into categories, simply put MyCoolCategory: at the front.

Limit your stocks

You can type “Market Cap > 500m” here.  

March 2, 2018
This how-to shows how to create a strategy in Equities Lab, and how to do some basic analysis of it. For humor value, we take the point of view of a children's book character, named Amelia Bedelia, who has no common sense. We have all felt this way some times.

The Amelia Bedelia Mutual Fund

This how-to shows how to create a strategy in Equities Lab, and how to do some basic analysis of it. For humor value, we take the point of view of a children’s book character, named Amelia Bedelia, who has no common sense. We have all felt this way sometimes.

Create A Screener

A quantitative mutual fund is a screener.  

January 23, 2018
Importing Assignments - University Series

Importing Assignments – University Series

Sometimes it’s better to not reinvent the wheel. A number of our existing professors have allowed a few of their class homework assignments to be publicly available to other professors. You can import these assignments into your Equities Lab class environment and either use them as-is or change them to follow your syllabus.

January 23, 2018
Testing your Equities Lab homework assignments

Testing your Equities Lab homework assignments – University Series

Not all assignments are created equal. Courses get more difficult as time goes on, and as you push your students to not only understand the material but also implement what they’ve learned into real-world simulations, some homeworks may become too complex for the standard user to successfully complete.
In order to combat this, we allow professors like you to try the homework assignments before they are assigned.
November 9, 2017

Run Backtests in the Background with Recent Backtests

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.…