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Three Sales Yesterday (VEEV, EVVTY, MRCY) Two Limit Orders Entered Today (SFM, WWE)

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Sales yesterday:

  • Sold VEEV at $300.83. This was purchased December 2 at $260.16. The current SellAt price is $305.72.
  • Sold EVVTY at $111.46. This was purchased August 25 at $73.51. The current SellAt price is $110.90.
  • Sold MRCY at $75.83. This was purchased October 30 at $68.83. The current SellAt price is $77.68.

Limit Orders Today:

  • Entered limit order to sell SFM at $23.23. Filled. Current market $23.16. Bought a week ago at $21.39.
  • Entering limit order to buy WWE at $45.98. Current market $46.59.

Chart of The Day, World Wrestling Entertainment (WWE)

Every so often the Algo generates buy or sell signals that just don’t look right. I watch carefully for these because they are not only dangerous, but once figured out can inspire Algo modifications that prove particularly significant and profitable.

Yesterday, WWE generated a signal that looked modestly too aggressive. I hired three mathematicians to try to create Algo modifications that might lead somewhere interesting, with the incentive that the one who came up with the most promising Algo would get a bonus. Two are still working on it, of which one has come up with something really interesting. One wasn’t paying attention and he’s out of the competition.

It is not difficult to generate an Algo that optimizes results for one company by hand through trial and error. The chart below shows the result of that. The problem is that applying this Algo to other stocks doesn’t generate enough trades. For instance, when the modifications applied to WWE are applied to SPY, it generated only one trade since April 15. The minimum parameter of three was established for the competition because otherwise the Algo will just wait for another market scenario such as the one that developed in mid-March. This is problematic because that decline was so precipitous and unusual that it may not be repeated.

Here’s the trial-and-error Algo generated for WWE.

WWE results:

  • Nine purchases, eight sales.
  • Average purchase at $42.35; average sale of $47.44 (adjusted for current price to balance against yesterday’s purchase).
  • Average return per transaction of 12%.
  • Average holding period 12 days.
  • Annualized return 381%.

I hope to put in place the results of the competition after the market closes today.

Analyst's Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in WWE over the next 72 hours.

Risk Research Inc. provides research tools to professional investors based on proprietary AI software. Our software is also available, customized to client specifications, on a monthly rental basis. We offer this research as insight into what we do in our own portfolio rather than as a recommendation or offer to buy or sell securities. This research should not be your sole source of information. It is based on probabilities, not certainties.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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