Diogenes Decisions

[mrmarket]

He mystifies and magnifies. He likes TA but also can pontificate on FA as well. Hear what Diogenes likes and dislikes, right here..right now....

[diogenes]

Thanks-I wondered how the title would work out.

Anyway, currently looking over potential shorts from Cramer following this paper:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=870498

From the picks listed by billyjoe on the 20th that increased on last Friday and then looking at the stock scouter rating it looks like MTU and FUN might be the best to short

[billyjoe]

diogenes,
I wonder if Cramer's disappearing returns can in any way be compared to the stocks first appearance in the IBD 100 ? I live near the headquarters of FUN and 2 of my kids work there. The fact that they are near a 52 week low and pay a div. of about 7.7% might not make them a good short. I'd have to agree with Cramer when he said "this ain't no six flags" (SIX)

---------------billyjoe

[diogenes]

diogenes,
I wonder if Cramer's disappearing returns can in any way be compared to the stocks first appearance in the IBD 100 ? I live near the headquarters of FUN and 2 of my kids work there. The fact that they are near a 52 week low and pay a div. of about 7.7% might not make them a good short. I'd have to agree with Cramer when he said "this ain't no six flags" (SIX)

---------------billyjoe

The IBD connection would be interesting to look into.
Anybody know of any studies on the correlation between stock price and listing on the IBD 100?

Regarding FUN : I have no doubt that the if the company is a solid one in the long run it will be fine. It is just the short term period which seems a bit more capricious in judging stocks.

[Lyehopper]

Diogenes, I'm glad to see you with your own thread. I'll be an avid reader.

btw.... What's the correct pronunciation of your handle?

Is it.... Di-au'-jen-eese?

[diogenes]

Yes, that seems about right.

Of course if there are any sticklers for ancient greek out there, they would probably want a harsh “h” after the “au’” bit. However, who would really use that anyway?

For what it is worth my only open position at the moment is GW.
I have conflicting thoughts about this stock.
Since, it is a very small position relative to my small investment funds I have been letting it sit.
So, really the importance of being unimportant comes into play here.

Bought: More or less because I was really interested in the Fundamentals sometime last year, then poorman liked it, too.

I no longer follow the strategy that lead me to buy GW as it seemed best for a longer term holding than I am interested in.

[diogenes]

Currently looking for a long position in either cg or orb (stolen from Park).
Looking at the correlation between the two and the 10 year t-bill shows a strong correlation between cg at .969 and not so strong on orb at .4928.


While correlation does not imply causation it is still something to think about.

Any thoughts on the two?

[diogenes]

Okay, finally spent some time to find the MAE and MAXFE of 30 Mr. Market trades using yahoo data. I think that this data introduced some noise into the formulas, e.g., RIO seemed off.
Time interval: day that Mr. M bought the stock up to and including when he sold.

This is what I found:

Avg %:
MAE = -16.676%
Maxfe=31.4327%

Median%:
MAE=-14.5755%
MAXFE=19.5271%


Idea:

I think it might be worthwhile to look into what happens if one waited for a Mr. Market pick to fall via the median % of 14.5755 and then entered the trade.

Tickers used:
ARLP
asca
bmhc
cfc
chke
cib
cme
cmn
cmtl
deck
dhi
dw
flir
ggb
ggi
hans
har
holx
ptsi
hzo
ipar
mcri
pdx
qsii
rio
safm
snhy
spf
urbn
wire
wsb

[diogenes]

Went long ORB yesterday at $18.11.

It was ranked higher than CG in my scan.

Scan outline (in general):

http://www.aetheling.com/MI/index.html

Stocks are culled from:
1. Mechanical Investing scan (from Valueline)
2. Mr. Market top 5
3. Picks posted by others (which are then looked into a bit more if they happen to come out on top during a scan).

Add. Info:
1. Look into possible correlations between a stock and:
1a. QQQQ
1b. Dia
1c. 10 year t-bill

Holding Period:
Approx. 3 weeks, or until stop is hit.

[ParkTwain]

How would ORB look against something like LNT or AEPI or OCN, each of which has recovered from a previous deep dip not that long ago. Though OCN is now at a point of having a high "ceiling" of resistance way up in the high 20s (it's presently at 13.62).

Or as opposed to BAC which is now making new all-time highs? Or even something like EXC, which has had only one or two really bad (% loss wise) years out the last 20!

http://finance.yahoo.com/q/bc?t=my&l=on&z=m&q=l&p=&a=&c=&s=exc

(At least you already admitted that you stole ORB out of one of my posts.)

[diogenes]

N.B.: This is using data up to and including 7/28/2006.

Looking for a 3-4 week holding has AEPI at number one above ORB (number two) and the rest. It has a very nice and linear march upwards.
MSN Rating of 10 (I like a rating at least 8 ).
(Nothing on Value Line).
So, using the ranking method puts AEPI first on the consideration list, but the correlations mentioned above would have to be looked into before buying.
This is done in order to see what type of movement in stock price might occur over the holding period with respect to certain markets, e.g., qqqq.

Edit:

Stop would be based on volatility and time (one month).

[diogenes]

Current interesting stocks according to running three Value Line Screens (Peg-nt, Exponential Growth, and GARCFS):
ISSX
KEA
ILMN

The screens are then ranked by price over 21 days with one year of volatility and, e.g., the highest ranking stocks are listed above.

See the page linked below for more information on the screens and a general idea about mechanical investing:

http://www.wikifaq.com/Motley_Fool_Mechanical_Investing_Board_-_Part_II

[diogenes]

The below is a link to an excerpt/link review of impact of the Fed and equity prices.
My understanding has been that news generally means very little, but perhaps the Fed is the outlier in this respect. However, since the paper focuses on Greenspan how much of a role did the internet/computer expansion play, if any?

http://economistsview.typepad.com/economistsview/2006/08/talk_is_cheap_b.html

[IIC]

The below is a link to an excerpt/link review of impact of the Fed and equity prices.
My understanding has been that news generally means very little, but perhaps the Fed is the outlier in this respect. However, since the paper focuses on Greenspan how much of a role did the internet/computer expansion play, if any?

http://economistsview.typepad.com/ec...s_cheap_b.html

That's a very interesting site Dio...I was reading about Min. Wage. In CA it is now $6.75hr. It will go to $7.50 on 1/1/07 and $8.00 1/1/08. Unfortunately, I believe that only hurts lower income workers and those on a fixed income as companies will raise prices to more than compensate for the additional labor costs....I don't know about anyone else...But I'm not planning on receiving an 11% raise in January...thx...Doug(IIC)

[diogenes]

That's a very interesting site Dio...I was reading about Min. Wage. In CA it is now $6.75hr. It will go to $7.50 on 1/1/07 and $8.00 1/1/08. Unfortunately, I believe that only hurts lower income workers and those on a fixed income as companies will raise prices to more than compensate for the additional labor costs....I don't know about anyone else...But I'm not planning on receiving an 11% raise in January...thx...Doug(IIC)

It should be noted that I think that min wage increase does not need to be a bad thing.
However, here is a response between a neo-classical (i.e. min wage= bad, always) to a paper that argues things from a different view:

http://macroblog.typepad.com/macroblog/2006/08/a_few_questions.html