One of the big projects of 2017 was designing a quantitative method of using our analytics software, Exodus Market Intelligence, to beat the stock market. It began in March and by October 1st three of the legs of the portfolio were built and invested into use Motif Investing (no affiliation). Here are the returns of each leg so far verse the S&P 500:
At market open tomorrow, I will build the final leg of this quant portfolio and buy the following stocks. They will be held for 12 months:
These stocks were chosen during a YouTube live broadcast on the iBankCoin YouTube account. I am like a real life YouTuber. Here is the recording:
STILL HERE? Good stuff. You may be a bit of a masochist. Totally fine. Here is a bit more information on the process, which I am copy/pasting from an earlier post:
This is a very lazy approach. There’s little need to babysit these books. An hour is spent at the end of each quarter, parsing data, running the Exodus system, then making a few clicks in Motif.
Here’s how it all works. At end of Q1, a 3-month top-down sector analysis is performed. At the end of Q2, a 6-month. Q3, a 9-month. And you guessed it, at the end of Q4 a 12 month look back.
Each book is a 12-month hold. Each book can hold a position held in another of the books, meaning certain stocks can have out sized positions. This means greater micro risk—but also potential reward.
If the systems keep flagging a stock, like they are IMAX (which is getting slaughtered), then it will be bought quarterly and without second thought.
It is nice to not think about investing. Humans tend to get in the way. Robots are much better investors, advisors, and friends.
Loyal
This quarterly process jives well with my inner accountant. Every quarter I make a contribution to my investments, and while doing so I re-balance one of my books. This saves on overall expenses and lets me do some simple financial planning.
Do you love this approach? Let me know in the comments below. If you have any questions, you can hit me up on Twitter @IndexModel or leave them in the comments below. If you think someone else could benefit from this type of investment approach, it would be really cool of you to share this post!
We are taking a quantitative approach to stock picking. This effectively removes the emotion and allows us to focus our energy and time on other industrial pursuits. Whether it actually works out is, as always, TBD.
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Excellent YouTube breakdown & walkthrough.
ALL HAIL THE ROBOT OVERLORDS
Love it. Robots for the kill in 2018.
Why a 3mo performance look-back after Q1, 6mo after Q2…etc? What is the rationale for different time periods? Also, why do you pick stocks from 5 sectors, not top 3 or all 8?. Finally why more picks from Consumer Goods vs Tech for example? Any rationale? Just curious.
The different look back periods simulate different time frames of the market being analyzed therefore showing us shorter and longer term trends. The rationale behind the picking is to start with the best-performing sector and work your way down until you have about 15 to 20 stocks picked. I would have picked more from Tech if there were more available at the short flow percentage I was looking at.
Yo, dude, No Tesla? NO Tesla in your book? Shit, Tesla is crushing it lately with their Model 3 delivery dates…missed deliveries by measly 50%. Only. But, the silver lining is that Elon Musky, the greeny promoter of the establishment’s global warming bullshit, is grateful to his muppet investors because he is set to burn thru another… are you ready?… wait for it,…waaaait… another of their $1.4 billion or so in the fourth quarter. Awesomeness!!
raul, the disciple of Elon (Praise and Glory to The Leader), you have not lost your
or have you? $TSLA @$320 now and descending…
https://tinyurl.com/y9smfpx4
Tesla is one of my core holdings. These stocks are chosen by the algo and are part of a different strategy I run.