Extolling the Virtues of Quantitative Investing

When Exodus was around we relied on sharpe ratios to be a final arbiter in making the quant picks. I knew this was a flawed approach because it wasn’t timely enough for my monthly rebalancing. While long term investing is good, I believe emphatically that you must adjust your portfolios often, especially in a fast paced world like this where one year oil is zero and the next $80bbl.

I found that to rebalance once per month is optimal and I also found that combining fundamentals with technicals to find good ideas is the best approach when quasi passive investing. When I buy quant picks I do not touch them for a month, no matter what. If I only depended on technicals for ideas, I would get stuck in an array of hot stocks that pump and then dump, not giving me enough time to capture the gains. However, by setting filters to embody a slew of fundamental criteria, the quant is all but assured to only choose good companies, profitable and growing fast.

Before I launched Stocklabs I worked hard to develop an algorithm that could select stocks on longer time frames and did so with the SL advanced Algo (SAA) suite of tools. We rank stocks on technicals from 1 week to 1 yr. I can attest to the major success of the Quant this year, +40%, to exactly this algorithm. It all but ensures I’m long the best stocks at the best time. My portfolio has switched each month from healthcare focused and retail to tech and to oil. The proof is in the returns. Although my trading account gains are much higher than 40%, I must admit there is a legacy appeal to having a quantitative system like this, one that will be optimized over the next year or so to be even better, surviving me and perhaps managing my estate whilst I’m dead, in order to finance orbital space cannons (OSC) long into the future.