Let’s show a hypothetical “alternate universe” called “flat (growth) world” to show how the effect of earnings revisions can be an excellent indicator to identify a market anomaly to invest in an undervalued stock. If the company is priced at a price to book ratio of 1 and has zero growth The company is...
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The Guide To Investing In Stocks
In investing you want to seek individual investments that are the outliers, that represent low risk, and high return. Additionally you may consider betting against those that represent high risk, low return for investors. In any case, you want to seek out the “outliers” of the following chart. Although everyone wants a higher return,...
2012 investment plan
If you are to invest in the stock market, it is wise to have a plan, this guide to investing in 2012 should prove worthy as any. How do you invest in 2012? The key concepts remain the same, only the variables change. Intelligent investing requires understanding all market conditions that can possibly exist,...
Evaluating Your Positions Using The Kelly Criterion In Investing
Although a change in trends or shift into “oversold” or “overbought” conditions, especially on a monthly timeframe should result in some drastic shifts in your portfolio, there are times between trends when individual positions are up or down, or when certain changes in fundamentals should impact your weightings, and there are times when you...
How To Boost Portfolio Growth: Leveraging Arbitrage
The best part about arbitrage plays is how independent they are from each other as well as the market. Multiple arbitrage plays on their own can provide a great high probability portfolio with consistently positive trades over time. However, if you are also following trends, and keeping an amount of bias towards stocks and...
Boosting Long Term Portfolio Growth By Leveraging Arbitrage
A big part of the concept of using the principals of the “kelly criterion” in your advantage is understanding that you can leverage multiple bets simultaneously if they are INDEPENDENT and that the more independent profitable bets at once, the better (with all other things being equal). The markets rarely have complete independence and...
Investing In 2012
Investing is a broad word because there are so many different vehicles upon which to allocate your capital to in efforts to make money. Some define investing as requiring a certain length of time, others require a higher probability of a positive return. For now we are only going to include investing in paper...
The Trend Trader
I am devising a plan, I intend to come up with a newsletter that will be completely free initially. I warn that I may be charging a monthly subscription for this newsletter at some point. However for now it will be completely free. It will be given along with the trend report. For now...
Kelly Criterion Shows Decreased Correlation Increase Return
“In probability theory, the Kelly criterion, or Kelly strategy or Kelly formula, or Kelly bet, is a formula used to determine the optimal size of a series of bets. In most gambling scenarios, and some investing scenarios under some simplifying assumptions, the Kelly strategy will do better than any essentially different strategy in the...
Watch the resistance
10/12 update: There are certainly a lot of bullish signals on a daily chart, even though we should expect a pullback at this point. The resistance did not hold and very minimal buyers came in but stocks still rocketed higher. The slow stochastic is currently overbought but both the RSI and Slow Stochastics from...