Community Banks At The Crossroad: Risky Moments For Shareholders [View article]
Good stuff Tim.
"will SNV and BHWB abandon their shareholders at the Fork, like MFNC, or take inspiration from the successes HRTB and FCAL are enjoying for having done the right thing?"
Would % insider ownership provide clues in this type of situation?
The Selling In PIMCO's High Income Fund Continues [View article]
Anyone interested in adding moderate leverage to a decent sized bond portfolio should consider using interactive brokers. So far as I know it is the only broker that does not rip off retail accounts on margin rates. They charge a mark up over a benchmark (Fed funds rate for USD) that currently ranges from 1.5% on small balances to .25 on large balances.
Special Dividends: Special Mostly For CEOs [View article]
This article is so utterly misguided and lacking in "value creating" content that I feel compelled to chime in. Special dividends can and absolutely do create value for investors - under the right circumstances. I have an article on the topic here:
I have followed National Beverage over a long period of time and can say on no uncertain terms that there are very few companies that have been as good for the small (or any!) investor with less risk (.37 Beta) than National Beverage. If you had purchased in Jan 2000, by this date National Beverage would have paid you a multiple of your purchase price - in dividends alone!
total shareholder returns since 2000: National Beverage: 750% SPY: 23% Russell 2000: 66% KO: 82% PEP: 151%
National Beverage is one of those "sleeper" stocks that flies under the radar, grinding out solid gains not do to "catching a fad" or, "being in the right industry at the right time" but rather do to solid operational and marketing performance.
The fact is, this country needs more CEOs like Caporella, who are doing right by shareholders and creating real value - employment and products - in the real economy.
Caporella could have easily taken National Beverage private at any time in the past 10 years. But he didn't, and many shareholders (myself included) are thankful for this fact.
I will (with luck) have an an article on National Beverage (and a few of my other favorite stocks) up here at Seeking Alpha soon.
Berkshire Hathaway Is Loaded For Long-Term Appreciation [View article]
Buffett is in much the same position as Amarillo Slim during the "golden years" of his gambling career - People give him an edge in deals simply to say, "I did a deal with Buffett". There is massive value in his reputation and connections.
However, I think Weschler is better attuned to today's investment climate and has a phenomenal investment perspective. Buffett himself seems to claim Ajit is more valuable to Berkshire than he is.
Buffett has built a solid team. If this team stays in place, i think the big surprise might be the development of a new golden period after Buffett, "leaves the building".
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
Eric, I appreciate your eye for detail. The maximum drawdown for all days is not the same as buy-and-hold because we are looking at a day hold, (buy on open, sell on close) rather than a 24 hour hold. Overnight return (or loss) is not factored in.
Largest loss is the maximum loss based on entry and exit prices of one trade. Max drawdown is a cumulative figure.
Your last paragraph raises some interesting questions. Think about it this way. When you "buy and hold" the S&P 500 product of your choice, over the last 10 years you have had a strategy that is equal to an average daily return of almost nothing, plus a max drawdown equal to what occurred in 2008. Consider a stock like apple, that has been a phenomenal winner. I am confident that the average daily return is very small relative to the largest daily loss
A more informative comparison would be to look at the maximum loss vs. the maximum gain, rather than the average gain. Or average Gain on winning trades vs. average loss on losing trades. This would make for a more accurate apples to apples comparison. It might have been more informative if I included average loss rather than max loss.
In other words it is not really just about the average profit on one trade or even strategy. it is the cumulative effect over time. For example I could modify this system to have an average return that was greater than the maximum loss. Yet, with this kind of approach i have found that doing this typically reduces total return and also makes drawdowns and worse. My approach is to add different conceptually diverse approaches together to smooth return, rather than to attempt to perfect any one strategy. In my experience "perfect seeming" strategies don't work as well in real trading because they are overly fit to past data.
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
Good questions and you are correct the article would have been improved with some of the specificity you mention. I did initially put in the futures quote symbols making it clear I was talking about the Electronic emini ES futures contract - the problem is they conflicted with a stock symbol so they needed to be removed. I don't know of anyone who does the non-electronic contract, i don't even know if it is viable to trade anymore (have not checked in years). Yes, all hours for all of the sessions are day-session only. This is where most of the volume is still traded so it is what I tend to focus on. Using overnight data or incorporating overnight data would be a different study. Quote vendors usually have an option for "day session only" or a method for you to manually set the hours you want to be working with. So for example the "open" I am referring to is the open they talk about on CNBC which is 8:30am central time, etc.
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
The SPY ETF and S&P 500 futures (futures symbol ES) use a different decimal value. For example when the SPY is around 140, the futures contract will be around 1400 (more similar to the actual index value). So 8 points in the ES would be .8 points in the SPY. Good question.
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
You can get an estimate of this by doing the following (using 1 contract):
Crossing the spread = $12.50 Round Turn commission = $4 Total = $16.50
Subtract this amount from the values in the "Avg Trade" column in the third table to get the modified Average trade values. For the Net profit column, you would multiply the number of trades * $16.50, and subtract this from the value present in that column.
Traders would substitute their own commission rate and estimates into the above.
Why Low Volatility ETFs Are A Sign Of The Times [View article]
"Rising interest rates could hurt the former, as well as the latter, to the extent the latter is heavily exposed to utility stocks"
I would like to see an ETF that controls for sector exposure, because as you suggest these products tend to be highly unbalanced in terms of sector allocation.
Eric Falkenstein (he posts here at seeking alpha and has a great blog) has done some great research on the low volatility phenomenon. His basic argument is that there is no "risk premium" that can be earned by assuming more portfolio risk unless the investor has special (alpha creating) knowledge.
General Mills: The Technically Risk-Free Stock? [View article]
I really like this article. You might like to read the evidence put together by Eric Falkenstein that suggests CAPM is deeply flawed as a practical tool. Indeed, empirical evidence suggests the that in the real world, the conclusions drawn from CAPM are almost precisely backwards. His latest book is called "The Missing Risk Premium: Why Low Volatility Investing Works." He also has a good blog that outlines many of his ideas.
Using His logic, it makes perfect sense that a low volatility stock like GIS has a superior long term record.
You make some good points. Balance sheet trends are one of the first things I check when evaluating a stock. By tying changes in the balance sheet to the income and cash flow statements over multiple years, you can fairly quickly get a good feel for if a company is creating economic value over time.
Community Banks At The Crossroad: Risky Moments For Shareholders [View article]
"will SNV and BHWB abandon their shareholders at the Fork, like MFNC, or take inspiration from the successes HRTB and FCAL are enjoying for having done the right thing?"
Would % insider ownership provide clues in this type of situation?
The Selling In PIMCO's High Income Fund Continues [View article]
http://bit.ly/VLG2Uu
Special Dividends: Special Mostly For CEOs [View article]
http://goo.gl/wbfFo
I have followed National Beverage over a long period of time and can say on no uncertain terms that there are very few companies that have been as good for the small (or any!) investor with less risk (.37 Beta) than National Beverage. If you had purchased in Jan 2000, by this date National Beverage would have paid you a multiple of your purchase price - in dividends alone!
total shareholder returns since 2000:
National Beverage: 750%
SPY: 23%
Russell 2000: 66%
KO: 82%
PEP: 151%
National Beverage is one of those "sleeper" stocks that flies under the radar, grinding out solid gains not do to "catching a fad" or, "being in the right industry at the right time" but rather do to solid operational and marketing performance.
The fact is, this country needs more CEOs like Caporella, who are doing right by shareholders and creating real value - employment and products - in the real economy.
Caporella could have easily taken National Beverage private at any time in the past 10 years. But he didn't, and many shareholders (myself included) are thankful for this fact.
I will (with luck) have an an article on National Beverage (and a few of my other favorite stocks) up here at Seeking Alpha soon.
Berkshire Hathaway Is Loaded For Long-Term Appreciation [View article]
However, I think Weschler is better attuned to today's investment climate and has a phenomenal investment perspective. Buffett himself seems to claim Ajit is more valuable to Berkshire than he is.
Buffett has built a solid team. If this team stays in place, i think the big surprise might be the development of a new golden period after Buffett, "leaves the building".
Berkshire Hathaway Is Loaded For Long-Term Appreciation [View article]
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
Largest loss is the maximum loss based on entry and exit prices of one trade. Max drawdown is a cumulative figure.
Your last paragraph raises some interesting questions. Think about it this way. When you "buy and hold" the S&P 500 product of your choice, over the last 10 years you have had a strategy that is equal to an average daily return of almost nothing, plus a max drawdown equal to what occurred in 2008. Consider a stock like apple, that has been a phenomenal winner. I am confident that the average daily return is very small relative to the largest daily loss
A more informative comparison would be to look at the maximum loss vs. the maximum gain, rather than the average gain. Or average Gain on winning trades vs. average loss on losing trades. This would make for a more accurate apples to apples comparison. It might have been more informative if I included average loss rather than max loss.
In other words it is not really just about the average profit on one trade or even strategy. it is the cumulative effect over time. For example I could modify this system to have an average return that was greater than the maximum loss. Yet, with this kind of approach i have found that doing this typically reduces total return and also makes drawdowns and worse. My approach is to add different conceptually diverse approaches together to smooth return, rather than to attempt to perfect any one strategy. In my experience "perfect seeming" strategies don't work as well in real trading because they are overly fit to past data.
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
Is Stock-Picking Just Another Hobby For Men? [View article]
http://goo.gl/enGJL
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
This Short-Term Approach Has Generated Substantial Gains In S&P 500 Stock Index Trading Products [View article]
Crossing the spread = $12.50
Round Turn commission = $4
Total = $16.50
Subtract this amount from the values in the "Avg Trade" column in the third table to get the modified Average trade values. For the Net profit column, you would multiply the number of trades * $16.50, and subtract this from the value present in that column.
Traders would substitute their own commission rate and estimates into the above.
Why Low Volatility ETFs Are A Sign Of The Times [View article]
I would like to see an ETF that controls for sector exposure, because as you suggest these products tend to be highly unbalanced in terms of sector allocation.
Eric Falkenstein (he posts here at seeking alpha and has a great blog) has done some great research on the low volatility phenomenon. His basic argument is that there is no "risk premium" that can be earned by assuming more portfolio risk unless the investor has special (alpha creating) knowledge.
Retirees: It's Time To Learn More About Dividend Growth Investing [View article]
General Mills: The Technically Risk-Free Stock? [View article]
Using His logic, it makes perfect sense that a low volatility stock like GIS has a superior long term record.
Follow Buffett: Look At Book Value [View article]