Interests: Economics, Stocks
Fantasy Fund: Trigger14's Fund
I am a competition economist by day but also a keen private investor. I am a 'quality' investor - I try to invest in the best companies for the long term. I also try to exploit momentum.
I have recently started writing a blog to track my progress as an investor: Quality Share Surfer
Yes good point. Interesting it would capture Brexit because the main immediate effect was on the currency which benefited a lot of the companies who earn foreign currency. Perversely this might have led to the big defensive companies having high beta and the smaller UK cyclical companies having lower beta than would otherwise be the case.
Yes beta should relate to cyclicality in principle but in practice it is just a correlation coefficient with the UK market and it doesn't always do a great job particularly for less liquid smaller stocks. Also the time period over which beta is calculated is relevant - great if the market has recently yo-yoed through recession but less so otherwise - now I don't think…
Hi Gus Yes I'm pretty excited about the idea of backtesting too - could result in a huge leap forward in evolving the more complex factor strategies I'm thinking about (especially if people share the results of their backtested strategies). There's some exciting opportunities for Stockopedia here! Yes I agree with you on the 'one size fits all' - that's kind of what I was…
I've definitely been very struck by the performance so far o the stockranks. Given the market imperfections I think I understand it seems intuitive to me that factor investing would work, especially when you combine different factors. The really interesting (and never ending challenge) is how best to use factors in combination. I'd envisage methods of ever increasing sophistication for this becoming much more accessible…
Were you not tempted to sell immediately Gus? I think you are right that odds are stacked against falling knives and in my view the Stockopedia research suggests you should pretty much always sell straight away and ask questions later. Do you have reason to believe fears are overblown? I noticed they mentioned increased price competition which would be troubling for me.