New post today:
It was just released yesterday.
Out today. Very interesting trader.
The latest:
How much money have we thrown away chasing the thrill of day trading, trying to time the market? Now, letās think about this: over the past 30 years, Warren Buffettās net worth has skyrocketed. What if, instead of jumping in and out of trades, you had simply bought Microsoft or Intel back then and held on? Even more recently, imagine if you had invested in Tesla 15 years ago and just sat back. Youād be looking at massive gains today. Well, my friends, thereās a new star on the dance floorāNVIDIA. This could be your next big opportunity. Are you ready to seize it?
Enjoy!
New post today!
The latest:
Is it a bird? A plane? Noā¦
Do you write that fast, or do you use AI to help you? Just curious. It doesnāt necessarily matter.
1 Like
I do use AI to research and sift through historical data.
Here is an article every single speculative trader or investor would benefit from reading.
Hey everyone!
Iāve got an exciting update for all subscribers, and Iām posting this in the threads as well! The strategy Iāve been running on C2 was initially designed for my own research, but itās awesome to see so many of you jumping on board. And yes, Iām trading it tooāright in my personal account, mixed with some of my other strategies.
Hereās the big news: after a year, Iām planning to open an IBKR account, which will allow you to Auto-follow the strategy with ease. But if youāre more of a hands-on person and want to learn how to do it yourself, Iāve laid out all the rules on my Substack page! Check it out here: The Sean Kelly Trading Edge.
Now, hereās the exciting partāthe results so far have been spot on with the hypothetical backtests. Thatās right, what we envisioned is playing out in real time, and itās beyond encouraging!
But thereās more! Iāve been doing extra research into mid-cap and large-cap stocks, and I truly believe weāre onto something BIG here. The potential is huge, and I canāt wait to see where this journey takes us!
Stay tuned and letās keep pushing forward. This is just the beginning!
To your success,
Sean Kelly
What happens in the backtest if the screen for S&P 600 membership is replaced with a screen for the 600 largest marketcap stocks? I believe that in research wizard the S&P 500 and 600 screens refer to current membership not historical membership. Using them in historical backests creates a problem of survivorship bias if true.
Hereās the dealāyouāre on the right track, but letās fine-tune it! First, forget Market Value! Instead, use SP 600 Membership under the description headingāthis covers the top 600 small-cap stocks. Youāll see fantastic results with these! But wait, it gets even better! You can also tap into SP 400, which focuses on mid-caps, and youāll see similar numbers. And hey, if you go for SP 500 stocks (not quite SP 600 or 400 territory), they still massively outperform the index. So many great options to explore! Awesome questions!
Hereās another exciting tweak for youāditch Zacks Rank = 3! Instead, go big and use all Zacks Ranks (Zacks Rank ā¤ 5). This opens up way more opportunities and boosts your potential! Oh, and by the way, you can rebalance weekly, monthly, or even annually and still see incredible results. Get ready to level up your game!
It seems like my concern isnāt being noticed. In Zacks research Wizard when itās evaluating what stocks to buy for the backtest in the year 2008 it is using the universe of stocks that exist in the S&P 600 as of the year of our lord 2024. It is using information 16 years in the future to backtest a decision in 2008.
In other words the backtest results are not realistic if you use S&P membership. This survivorship bias is amplified as stocks hitting new lows are often ones that do end up going under. However zero of the stocks in your backtest will because they are the ones that survived and made it into the SP600 as of today.
You can use the SP membership that specifically says āhistoricalā but only up to 500 something weeks into the past.
Here is an example. Run the following screen for S&P 500 stocks.
The results look amazing!!! But they are highly misleading.
Dig into some of the details for what stocks were picked on various weeks. For example, GGP was selected for the end of June in 2009 as a buy.
However, GGP was not added to the S&P 500 until almost 4 years later.
If you are doing backtests how you are describing them on your website with Research Wizard you are getting bad results. If you change to screen the 500 largest US companies rather than using 2024 S&P 500 membership then you will get much worse results even though those results are much more accurate.
You also have to pay attention to how many weeks of data are available for various screens historically. For example, if one of the items shows a number of weeks next to it then it is only good for that many weeks back into history. For example the 52 week low historical data is only good for up to 525 weeks back into the past.
Taking these things into account running the following screen for up to 525 weeks into the past will give much more realistic results which as shown are worse than the S&P 500 buy and hold though they have done tremendous since April 2022. However, they have done no where near as good as the backtest of the bad screen that results in a 50% plus CAGR.
I hope that helps clarify. Sorry.
