Stock
Summaries: Here, we apply our usual
table format to the analysis of the trading histories of individual stocks.
The idea is to sift through historical data to determine the best buy and sell
strategies for individual stocks. As many as 500,000 different strategies
are examined for a single stock. What's more, the tables give you an
indication of the significance of the results...every stock has a "best trading
strategy" when examined with hindsight, but is this strategy really noteworthy
when viewed through the lens of statistics?
Obviously, there are a lot of variations on this sort of "stock summary".
There are thousands of different stocks we can look at. You may be
interested in the best predictors of daily gains, or you might be more
interested in monthly or quarterly gains (yearly gains wouldn't make sense,
really, since there would be a very limited amount of data to look at).
You might not be interested in historical results compiled over the longest
possible period...perhaps you'd only like to see the post-9/11 trading habits of
the stock. We could even output the best predictors of future volatility
in the stock, instead of price.
|
One should be wary of various mistakes that could be committed
when viewing our tables. Take, as an example, our summary of Cisco Systems
stock. This stock, of course, is a monster success story. The stock
has split 9 times in the last 14 years at the time of writing. With the
power of hindsight, we were able to identify one-day strategies that would
result in
average gains of 6% with great statistical significance. The simple strategy of buying the stock after
sessions in which its industry group was particularly strong resulted in average
gains of 3%. A number of other momentum strategies were also indicated for
short term gains.
One wonders, however, to what extent folks commit the fallacy of
analyzing data only from outrageously successful stocks and then drawing
conclusions about the "way" to trade stocks in general. Scan the market
for the most successful 1% of stocks and you're certain to find that momentum
strategies would have worked well with them.
Given the fact that none of us really know if the stocks we're
holding will be, or will continue to be, success stories or not, the question investors should really be asking is, "what
strategies will work now, with the stocks I'm holding?" To various extents, the stocks we list in our "stock summaries"
are all success stories. This should definitely be kept in mind when
viewing the tables.
|
If you, our subscribers, wish to see a summary of a particular stock,
let us know. Be sure to specify the parameters you'd like us to use (see
the paragraph above).
Currently, the following stock summaries can be viewed. Non-subscribers can take a look at the
summary for IBM. Upon
making a selection below, a new window will pop up. Users may want to use
these summaries in conjunction with our "seasonal
charts".
Copyright © 2007 Stockwarrants.com. All rights reserved.