I am a little sad because I see less and less comments here. I realize that I am not a great contributor here, so in some sense it is not my place to mention this, so I apologize about that before hand. What can be done to bring back interest here, and why has it died down.I don’t use the screens, but I buy preferred stocks, and do some trend following, both of which I learned here. I can remember the great screens Dr. Bob, and Mungofitch would post. And of course, the screens of Boris Nand. Does anyone have any ideas?
Does anyone have any ideas?I still find this place useful, and, at times, inspiring. The folk who inhabit this board are giving, smart, and articulate. Maybe results are not "blow you away" right now, but that's not why I am here. I am here for the occasional gems of wisdom that pop up when least expected.I can wait for the next one.Hank
I am a little sad because I see less and less comments here. I realize that I am not a great contributor here, so in some sense it is not my place to mention this, so I apologize about that before hand.What can be done to bring back interest here, and why has it died down.Way back when I first joined The Motley Fool, I did so because I had read The Motley Fool Investment Guide and it seemed to have better techniques than throwing darts at the WSG stock pages. I started out with The Foolish Four, moved to Unemotional Value and Unemotional Growth screens. They worked for a year or so. Back then, back-testing was difficult because prices were only conveniently available on a monthly basis, I had to get Value Line data by going to the library and copying needed data from microfilm and microfiche on paper and entering all that into my computer by hand. I subscribed to Investors Business Daily for several years, etc. I even built a backtester in C++ and used postgreSQL for the database to keep it all in.I do not do that anymore. One reason was that getting the (daily) historical price data for the entire Value Line universe of stocks got more and more difficult and the free sources got less and less accurate. Another was that the companies changed their tickers and I did find a solution to that, but when Chrysler gave up its C ticker, and Citibank took it over, all historical data for Chrysler disappeared. (That is just an example of the problem.) Johns Manville, IIRC, had about four tickers: was it really the same company after each incarnation? Then there were the splits that were manageable, but a pain. I never solved the problem of spin-offs and mergers. An even bigger problem was that some strategies involved weekly trading, others monthly, and only a few annual. It was just too much of a bother to use those strategies even were they good ones. I had a brokerage account where I could make (IIRC) 20 free trades a month for a fixed annual fee, but the bookkeeping drove me nuts. It would have been worse if it was in my margin account instead of my IRA.So I just lost interest in doing all that. I still look in on this board, but I do very little trading. I did buy a few shares of TRX (penny stock) as an amusing speculation, but large investments: not much trading at all. I have been retired for about 20 years and loss of capital is an important issue. But so is loss of purchasing power from the US dollar. But other fiat currencies are, for the most part, even worse.
I am a little sad because I see less and less comments here.I share your sadness. Alas, I have no good ideas to rejuvenate discussion. As I've posted in the past, I was using my own artificial neural network to trade stocks, but I got ideas for my NNs from this board. They stopped working in 2008 and the last NN I developed was in 2011. As a replacement I tried implementing some of the stock screens from this board and a couple I developed. I did that for about 1-2 years, but performance was abysmal so I gave up. I still use some of the timing methods, but probably not as "mechanically" and more "emotionally" than I should. I'm curious, if anyone cares to share, if people are still implementing purely mechanical stock picks how are those working as of late (last year or two)? I'm not sure what the future holds for this board. I still have some ideas about timing methods, things I could try but have no idea if they would work or not. But my impression is that the interest in new stock screens is nearly zero. If there were people interested in revisiting (for me) NNs I'd be interested in that. There would be a learning curve for me, as the software I last used was built in the late 90s. I've had some ideas about implementing Deep NNs, but I don't yet know how that would work at the code level. John
A couple weeks ago I was asking about GTR1. Thank you for the help I received. I am a GTR1 newby.I'll share my intent in case anyone is interested. Perhaps others have already looking into something like this. The last couple months I have been reading the "Saul" board, which concentrates on SaaS stocks. Some on the board, including Saul, report eye-popping returns (e.g. > 40% CAGR). When looking at those stocks, they seem to be interested in accelerating revenue growth; e.g. 45% growth in Q1, 52% growth in Q2, 61% growth in Q3, etc. Of course, rarely are things that clean, but I was attempting to build a screen that implemented this idea. I kicked things around for a week while I was on vacation and haven't looked at it again, but this was my first attempt:http://gtr1.net/2013/?r0::saleVel1:gt1.2:saleVel2:gt1.2:sale...I'm not sure I've implemented this correctly, but the 10-stock CAGR comes out to -5%. So maybe a better short screen? The one-stock version has a -24.5% CAGR, but some years it goes up 300%, so probably not a good stock to short. There are other metrics Saul et. al. look at, one they call "Oomph" (I think). Also, they look at stocks with relatively low market caps (< $20 bil?). I suppose these metrics could be added to see if the CAGR changes, but I have not got around to tinkering with it again.John
I still use some of the timing methods, but probably not as "mechanically" and more "emotionally" than I should.I'm curious, if anyone cares to share, if people are still implementing purely mechanical stock picks how are those working as of late (last year or two)? I am not. In honor of the Unemotional Value and Unemotional Growth strategies*, I must, per contra, call myself an Emotional Investor._____* If you are going to use either of them now, bear in mind that I abandoned them back when serious back-testing with more complete data became possible and it showed they were no better than picking the stocks in the DJIA or something like that.
Well, I would be more enthusiastic if I were making more. Most of the standard SIPro screens posted here are Small Value which hasn't done well for years. Meanwhile, there is much excitement over on Saul's board. Growth screens might work in today's market. Taking on risk is being rewarded.The ideas on this board 20 years ago have now become mainstream. Quants, factor funds, ETFs, computer algorithms to pick stocks. Institutional investors are widely using tactical asset allocation (and failing to beat the market). A small investor can only beat the market by doing something different than institutional investors. Maybe Small Value will start outperforming. Or maybe it has become an overcrowded trade due to the ease of investing using ETFs."Value stocks have appreciated significantly less than growth stocks in the post-crisis period that’s been marked by a cost of capital that has approached zero.""They are responsible for the collapse of some of the greatest reputations in the investing business, and for the numerous closings of their funds."https://thereformedbroker.com/2019/06/13/when-everything-tha..."As of today, there are 228 Designer Models that have been live for 2 years or longer. Of those 228 models, only 43 of them have provided excess return above the S&P 500 Index. That's about 19% of the models."https://www.portfolio123.com/mvnforum/viewthread_thread,1178..."Small value, which has historically outperformed the market (see Fama and French 1993), has significantly underperformed the market for quite some time now. It has underperformed for the past three years, and since 2014, it has only outperformed in one year (i.e., 2016).""I'm not sure of the extent to which various folks follow what's going on in the investment community as a while, but FWIW, we have been in a perfect storm in which the only things that has really worked has been Cliff Asness' "George Costanza Portfolio," in which he deliberately did everything "wrong." (For those who don't readily appreciate irony, that was a satirical exercise.) So finger pointing, hand wringing, accusations, etc. have been flying all over the investment community, particularly among quants and once-routine dialogs between quant researchers and their institutional clients have become very, very tense."https://www.portfolio123.com/mvnforum/viewthread_thread,1176...John, 1. I would suggest using longer term sales to measure growth. Maybe: salesg3f.sor SL1: linear(1,salesq1.s,1,salesq2.s,1,salesq3.s,1,salesq4.s)SL2: linear(1,salesq9.s,1,salesq10.s,1,salesq11.s,1,salesq12.s)SGm: if(SL2>0,ratio(SL1,SL2),0)2. You need to use liquidity filters. Maybe:styp.a = 11dspo(1) >= 252linear(1,ord(1),-1,Q1End) <= 252adv(1,63) > 1000000MktCap > 100sales12m.s > 100aprc > 5Q1End: perendq1.sMktCap: product(sprc,csoq1d.s)3. What is driving the growth? What are some accounting red flags? A good screen should have at least 3 dimensions. For example: yield, PE, momentum (which hasn't worked lately, but sounds good). Some over at portfolio123 use hundreds of calculated measures in a single screen. Successful growth stocks have certain characteristics. Develop a story. https://www.investopedia.com/terms/r/redflag.asphttps://quantpedia.com/Screener/Details/38https://genovest.com/blog/research-and-development-expenses-...I have had some success using R&D spending as a criteria. The CEO of a a medical device company I worked at stated that successful medical device companies spent more than 10% of sales on R&D. Amazon is now spending 12%, Google is spending 16%. Of course, as an engineer I like higher R&D spending. Patrick O’Shaughnessy states in the podcast below that OSAM looked at and rejected R&D as a stock selection criteria. This could be a red herring, or maybe they only looked at R&D for value stocks (R&D and value are inconsistent and so probably don't work together).https://capitalallocatorspodcast.com/2019/06/09/osam/
I've been on this board for over 20 years now, and was part of the original effort to gather VL data from the microfiche records at Stanford (when I was a graduate student there).I believe that there is still "gold in them there hills" with respect to MI. I have been solidly MI for almost all of those 20 years, and while the latest under-performance of the market has been somewhat painful, overall I have been pleased (and probably lucky with my screen selections).Looking over at AllocateSmartly, where they backtest many of the ETF rotation strategies, I believe that we can do better in terms of backtesting and exploring ETF momentum based strategies. Typically, these strategies have a growth set and a defensive set of ETFs, and a method to choose to be in growth or defensive, and then another method to select which subset of ETFs to choose based on some form of momentum.As far as I can tell, none of them use RRS type momentum though it would be interesting to test if there are advantages to be had there. Also there are so many ways to choose between growth and defensive, these, too, could be explored.I'm a bit of a GTR1 novice, but it might be fun to take a look at these as a group.--Gabriel
A couple weeks ago I was asking about GTR1. Thank you for the help I received. I am a GTR1 newby.I'll share my intent in case anyone is interested. Perhaps others have already looking into something like this. The last couple months I have been reading the "Saul" board, which concentrates on SaaS stocks. Some on the board, including Saul, report eye-popping returns (e.g. > 40% CAGR). When looking at those stocks, they seem to be interested in accelerating revenue growth; e.g. 45% growth in Q1, 52% growth in Q2, 61% growth in Q3, etc. Of course, rarely are things that clean, but I was attempting to build a screen that implemented this idea. I kicked things around for a week while I was on vacation and haven't looked at it again, but this was my first attempt:http://gtr1.net/2013/?r0::saleVel1:gt1.2:saleVel2:gt1.2:sale......I'm not sure I've implemented this correctly, but the 10-stock CAGR comes out to -5%. So maybe a better short screen? The one-stock version has a -24.5% CAGR, but some years it goes up 300%, so probably not a good stock to short. There are other metrics Saul et. al. look at, one they call "Oomph" (I think). Also, they look at stocks with relatively low market caps (< $20 bil?). I suppose these metrics could be added to see if the CAGR changes, but I have not got around to tinkering with it again.Beside revenue growth, he uses a few other metrics. adjusted gross margin, or just gross margin. Change in gross margin, dollar based net retention rate, total available market, and here is a link to some of his other metrics. https://openviewpartners.com/blog/what-are-key-performance-i...
I have been a follower of this board since 1998, though only sporadically a contributor, if you can call it that, since I don't have anything to offer in the way of original insight. But my enthusiasm for MI is undiminished. I remain a 100% mechanical investor, and I have no complaints. I realize that my experience may not be typical in this regard. I have always used simple relative-strength screens, initially within the VL universe, then for the last dozen years or so with ETFs. I was lucky in my choice of screens during the 2000-2001 slump, and I was substantially short during the 2008 melt-down, thanks to timing ideas I learned on this board. During the tech bubble I crushed the market, as did many here. Having dodged the bullet in 2008-9 I have kept up or slightly ahead. The biggest thing I have learned in recent years, not exactly from this board, but (I’m pretty sure) because of it, is the value of the Fed macro recession indicators developed by Philosophical Economics (now sadly in hiatus).I just looked to see when my last post was, and I see that it was in 2015, in praise of Mungofitch's prediction that obvious things will remain true. This is, perhaps, the root of the enthusiasm problem, if there is one: obvious things don't generate a lot of enthusiasm. The first obvious thing I learned on this board was that I am a natural momentum investor. I do not have the time or the skills to make the kinds of judgements required to be anything else. I am also a natural mechanical investor. Mechanical investing, as others have said, is scarcely "unemotional," and not just in the sense that MI practitioners get the same sick feeling in their stomachs as everyone else when the market tanks. I think mechanical methods require a psychological commitment that goes beyond belief in back-testing. I can't imagine myself making a financial decision based upon my own thoughts about the market. The idea is ridiculous to me. My investing motto comes from the movie Bull Durham: Don’t think. You can only hurt the ball club.The second obvious thing for me has been that simple screens are best. I have never used a screen with more than two steps. When I was investing in individual stocks my universe was always the VL rank 1 list. As an ETF investor I use a couple of slightly different screens, and a couple of slightly different lists, but the longer of the two list has six tickers on it. All of them utterly unsurprising and ubiquitously traded, with spreads of a few cents.A third obvious thing is maybe not obvious, but to me highly likely: that screens or other methods developed to beat a bull market are probably not going to work out in the long run. My goal is to keep up when times are good, and get out of the way when they are not. One can aim higher than that, but I prefer a target I am pretty sure I can hit.Anyway, my enthusiasm is undiminished.Baltassar
I don’t use the screensI think that's the crux of it. People who don't use MI for real money investing have no practical motivation to stick around. They're likely to drift away out of boredom. I can guarantee that I will continue to be on this board as long as I use some of the screens, but probably not if I stop, even though I regard some of the people here as long time buddies.Newbies who wish to take MI seriously face the difficulty of no backtester availability for the VL universe, and a very small cap universe of SIPro stocks. The shut down of GTR1 for the VL universe was a severe if not fatal blow to this board. It choked off most MI creativity. I stick to it anyway, without the ability to backtest for several years now, because I like to keep my investing on virtual autopilot. But the strain is obvious because the performance has been shitty for the last few years. One element that has performed very well for me is the 6/3 options which are a pure momentum strategy. If it wasn't for those, I might have thrown in the towel and left this board. Elan
Baltassar, this should be on the banner page for this group for all time:Don’t think. You can only hurt the ball club.
But the strain is obvious because the performance has been shitty for the last few years. One element that has performed very well for me is the 6/3 options which are a pure momentum strategy. If it wasn't for those, I might have thrown in the towel and left this board.The board members are interesting and really smart
Baltassar,Do you have another board that you're on with your ETF MI?It's great to hear everyone talk about this board wanting enthusiasm. I was very young in 99' when I found MF, but now I'm 44, am I the youngest person on this board? I told myself when I couldn't make 20% YOY with my business I'd return to MF and now I have a huge cash flow and a sizeable ROTH so I'm hoping there will be some of you around in 20, 30 and 40 years.Jared
Hi, Jared.The only board I follow at the Fool is MI, though I've look around occasionally out of curiosity. I'm not aware of any others that do the kind of thing that gets talked about here. I'd hate to think 44 is the bottom of our age range, but honestly that's about how old I was when I got serious about investing. When I was younger I didn't have any money!Baltassar
I started MI at the time of Robert Sheard and the Foolish Workshop (is that what it was called), back in 97 at age 50. Never a contributor to this board but learnt a lot from it and lurk here to pick up gems of wisdom. I quit doing screens long time back as I don't have the discipline that is necessary. With age it has become necessary to avoid loss in the market. One big difference I find between then and now also is that the enthusiasam and sharing has diminished greatly.
Baltassar,Are you using AAII to create your ETF screens? Or VL? How has your ETF screens done over the last 10 years vs. the market? I think it would be a great addition to my folio rather than just having a % in just SPY.Not gonna lie, it sux thinking I'm probably the youngest. Jared
What this thread made me realize is that a lot of mechanical investing is not mechanical. What screens you pick are not mechanical, and more to the point, how long you stay with a screen when it is underperforming is not at all mechanical. Meb Faber states that you have to stick with a strategy for 20 years to see if it is worthwhile.
Hi, Jared.Are you using AAII to create your ETF screens? Or VL?My screens are nothing special. I worked them out from reading around on the web, but mainly from applying the basic ideas developed on this board to the universe of ETFs. Depending on the asset classes involved, screens based on ETFs (sometimes called "rotational" screens) can be backtested for twenty years or more using standard mutual funds as proxies. Here is a simple example, which I'm pretty sure I have posted before:http://gtr1.net/2013/?~Basic%20Three:h5n2i252::rrs%281,84%29...This is not remotely optimal -- any kind of bond fund in lieu of cash will improve returns, for instance -- but it is hard to argue that it is over-engineered.The screens I actually use are similar to this one, but not identical. They have kept me even or slightly ahead since 2009. The Fed "recession" signals have helped, by keeping me from being bounced out of equities in recent years, when downside volatility has become more severe. As I say, I don't aspire to beat a bull market.Baltassar
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