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, Blockdesk (1,459 clicks)
ETF investing, CFA, portfolio strategy, long/short equity
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One of our regular readers, running out of prior successful recommendations, hollered for another "fix." Since our site conversion is taking longer than anticipated, we are pleased to comply with his request, which read like this:

  • "For the One True Way to compete, there has to be the rapid replication of many small gains -- bunts; singles; doubles to make up for there never being any home runs. And as it stands, we don't have replacement recommendations for the items that get sold.

    So my suggestion is that it might be time for another "Top 30." This would be a particularly good time because things will get more challenging as the market approaches new highs. This will not be a case of 'buying on the dip.' For those who anticipate staying fully invested in the revolving Portfolio of the Many Small Bites, this might be a good experience. We'll see what happens.

    Is anyone (besides Peter Way) making an effort to track the recommendations? I try to log as many as I can (until I run out of patience typing numbers into spreadsheets). But I really pay attention the items I actually bet on. And the results are remarkable.

    Of Six REITS 8/22/13, 5 have hit their targets (as advertised). Number Six (NYSE:FRT) is making progress. Watching the show in terms of Range Index, FRT started with 2. Price now is 78% of the target price.

    Of 8 Biotech stocks 9/3/13, 5 have reached their advertised targets. On the Range Index scale, BIIB has progressed from 10 to 85. VRTX and MDVN are both in the black, but they have a ways to go.

    There are 27 various other items that I've bet at various times since 8/3/13. Of these, 10 have hit their targets. Another 5 are making good progress. 4 are modestly in the red -- except TDC, which was down 30% at one point. That's not modest.

  • PS -- UDOW's red-haired cousin SVXY did as expected. Seems that if UDOW is good, SVXY will be GREAT!

Here is today's screening of our entire population of stocks and ETFs, with emphasis on those items with ample examples of prior Range Indexes like today's that show (by successful subsequent results) that the market-maker sources of the forecasts do have some useful insights as to what may be coming next.

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Current price range forecasts are in the first two data columns, with upside prospects in the fourth. Range Indexes (6th column) measure the percentage of the forecast range that lies below the current price (3rd column).

Everything else in the table is the result of all prior forecasts in the past 5 years with Range Indexes like the present, stock by stock. Sample Size indicates their extent. The table is ranked by the proportion of profitable experiences, and within rank duplicates, by the last column to the right, the ratio of prospective rewards (column 4) to the average worst price drawdowns from the sample histories (column 5).

There are no ETFs now sufficiently attractive by our screen standards to qualify among this "cream" set. That may simply be a matter of price relative to forecasts of the moment, but it suggests that investor focus is more intent on specific stocks. There is one index in the table, NDX, that cannot be invested in directly, but does have listed options. They are the source of the implied market-maker [MM] forecasts, so we have a direct look at the market professionals' expectations for that index (as well as others).

Many of the table's contents should be no surprise to active investors, and are continuations of well-known institutional investment favorites of the time. But a couple show up as perhaps having something special brewing, Hormel Foods (NYSE:HRL) and DSW, Inc. (NYSE:DSW). We'll let you come to your own conclusions as to what the MMs may have in mind.

Their pictures below show the daily price range forecasts for the past six months as vertical lines encompassing the contemporary market quote at the time of the forecast. Green verticals indicate low Range Indexes, and yellow or red ones caution high R.I.s. Trend of the forecasts may be encouraging or troubling, depending on direction, persistence and intensity.

(click to enlarge)

(used with permission)

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Come on! Invest a little personal research effort into the decision. You know what they say - Sex and investing are lousy spectator sports.

Source: Fresh 'Best Buy' Candidates, Top 1% Of 2600 Stocks And ETFs