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No. of Recommendations: 3
Quill,

There are thousands of companies whose stocks could be traded. One way to cut down the research problem is to trade groups of stocks via funds (open-end, closed-end, or exchange-traded). And, actually, there's research to support that idea. Supposedly, 80%-90% of what might be gained from trading individual stocks has little to do with the merits/demerits of the individual company and more to do with broad factors, such as Fed policy. So "stock pickers" might think they are investing geniuses. But they've often done little more than predict that tomorrow's sun will rise in the east.

Seeking Alpha tracks ETFs, and their lists are a good place from which to build a trading universe. https://seekingalpha.com/etfs-and-funds/etf-tables/key_marke...
What I'm proposing is this. Let's restrict our trades for the Challenge to just the ones Seeking Alpha lists, plus a few inverses. And let's score ourselves in two ways: 'absolute returns', of course, and 'risk-adjusted returns' --as measured by the Sortino Ratio, not the Sharpe Ratio-- where risk-adjusted returns are given a prem, because they are treated so in the hedge fund world, where total return doesn't matter as much as risk-adjusted return.

True, risk-adjusted returns don't spend any better at the grocery store or gas pump than absolute returns. But them who chase the latter get themselves thrown out of the investing/trading game far more often. So, what really matters in the long run is year-after-year, good-markets-and-bad survival, not bragging rights over an occasional spectacular win (that was more likely due to dumb luck than shrewd research or proper discipline).

Arindam
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