Short post today. Our model has a few stocks that it likes...over long periods of time.
They tend to have had high BETA values, and recently have low volatility. Therefore, they look like they can run wild when stocks rise, but also are very calm and safe bets.
Today, Digital Turbine $APPS issues earnings and showed their business shrunk (was a growth stock) and they went from profit to loss on a GAAP basis.
Stock dropped 46% today.
When we run our model, we are using the 'math' behind stock movements, and not doing due diligence on stocks. This loss would have been catastrophic had it not been hedged.
So, we suggest that at a minimum to eliminate positions in stocks that will have earnings releases. This way, these one-time events can be avoided, both on the positive and negative side.
Good luck to all.
Stock Market BLOG
President and Investment Advisor Representative