Through Friday, April 8, 2022
AOSL SI SITM TTD Held evenly (25% apiece). These should do very well if the stock market rises. They will not do well if the market continues to fall. This is a lower risk, higher expected return portfolio.
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During our latest model run, we found a few stocks that require additional information. However, they score very badly in our CQNS DOWN run.
$LWLG $RGC $KOD $BBIG $AMC $AEHR $SAVA $SGLY $GGE $BBAI SGLY stands for Singularity Future Technology Ltd. and looks like a stock to watch. $GGE is not the Jolly Green Giant in the grocery store. They did a private placement at $1.00/share at the end of March. Buyer Beware on all of these stocks. We say maybe...based on recent increases in cannabis prices based on the Cannabis Business Times index. https://www.cannabisbusinesstimes.com/cannabisindex/
It has been a tough year for cannabis stock in general (ETF: $MSOS) and for these infrastructure companies specifically. We are tracking $HYFM $GRWG and $SMG and think they may be poised for a stock price recovery soon. So much to talk about and research. We will make a video walking through the SEC filings. More to come. KTA: Buyer Beware Jeffrey, you are not the only one with questions on Marathon Digital Holdings. Look at the bonds! 1% bond is yielding quite a bit more. We updated all the Market Questions & Data sub-tabs with current data from last night's runs.
KTA: Investing in profitable companies is less risky ~2x neg net income stocks have high BETA than pos net income stocks ~14x pos net income stocks have low BETA than neg net income stocks Negative BETA stock list bearing some fruit (for DD and R&D):
Today's top dividend stocks: $BX $CG $APAM $QCOM $GES $VRTS $AVGO We have started publishing our daily best dividend stocks. This is a new analytic lens through which to view all US listed stocks.
What did we find? 1. The overall US equities market is falling, and the damage is widespread. US Equities falling I see: A year of gains deleted FED talking, not acting Light US equity volume US recession fears Inflation persistence Anger at the Rus Strong USD Growth stock punishment Widespread RED ===> Don't throw out the baby with the bathwater 2. Our 26 stock cannabis and tobacco index (excluding 2 tracking funds) is almost universally red today, and for the past few weeks. However, the relative valuations are staying constant. We equity capitalization weight these, and only two pairs of stocks flipped recently. In other words, the whole sector is being sold. 3. Our favorite, most attractively efficient dividend stocks are 100% red today. They were ~ 100% red yesterday (and about half fell off the list). These are becoming more attractive overall, as yields rise when purchase prices fall. BTW, our dividend stock portfolio is 100% US listed, profitable, and has paid a higher dividend yield, and been more 'efficient' than the S&P 500 Index ETF. 4. Our 8-stock trucking index is still primarily RED (6 of 8 down), and this index has been down all week. 5. Our crypto (bitcoin) index is RED, and has been so for a week. However, the price of bitcoin is a respectable $$43,613 at the time of this BLOG Post, which is historically pretty strong. Most of our 11 crypto stocks are trading near 52-week lows. 6. As to the dogs...we have found a few stocks that look truly ugly from a fundamental basis. We are looking for ways to suggest betting against them (or doing so ourselves). Two of them are being supported today, while others are falling. Stay tuned for more insights on the CQNS Down stock 'dogs.' By: Jeffrey P. Cohen, Investment Advisor Representative & President On April 5, 2022 after market close, we ran our models. This was not a good day in the market. Gold and gold mining stock $NEM fell while the $SPY and other indices fell.
Many stocks we follow, whether they were CQNS UP or CQNS DOWN also fell. BETAs were magnified in the RED rout. So, we ran the model again and found 9 stocks that are very efficient (meaning you don't carry extra risk for the expected return) when compared to the S&P 500 ETF ($SPY). They also make positive net income. Finally, they have extraordinary high BETA values. This means they will rise like a rocket, or fall like a bomb today if the overall market moves aggressively. None pay a dividend, so you can bet against them too without the cost of the dividend. In order of efficiency: $SI $SITM $SQ $AOSL $TTD $LSPD $UPST $MGNI $LC Do your due diligence before investing. This is not investment advice. Investing in stocks (especially these 9 tickers) entails risk and you may lose your investment. Update: 8:55 am EST Our 9 "Rockets" are all down in pre-market, along with the $SPY. The US equities market is flashing RED this morning, in all the right places. Insights from our Chicago Quantum Net Score Data Analysis
Sunday, April 3, 2022 By: Jeffrey Cohen, Investment Advisor Representative & President US Advanced Computing Infrastructure Inc. jeffrey@quantum-usaci.com https://www.chicagoquantum.com +1.312.515.7333 PART 1: SHOULD INVESTORS INVEST IN STOCKS OF MONEY LOSING COMPANIES? Should investors invest in validated, US listed stocks that lose money, or more precisely have negative net income. The simple answer is that our model found only 8 stocks out of 1,157 that would be more efficient (higher expected returns vs. stock price variance) than buying a broadly diversified portfolio. We see four portfolios that are more efficient to hold than investing in individual money losing companies:
We answer this question during a time of moderating market returns. The ‘forward’ one-year expected market return is 8.13% for a balanced portfolio of $SPY, $IWM and $QQQ, using a risk-free rate of 1.00%. Stock Price Volatility Money losing companies stocks have a higher daily price variance than those that make money, often by a factor of 2:1 to 3:1. Today’s ratio is 3.42 x 10-4 / 1.18 x 10-4 = 2.89. Expected Returns Money losing companies stocks have a higher BETA and therefore a higher expected return in the coming year than money-losing company stocks. Expected Return = 11.84% / 9.14% = 1.295. We believe the greater risk outweighs the greater expected returns during times of moderating market returns. Investors should avoid holding individual stocks in companies with negative net income. They should either focus on profitable companies, or in buying a broadly diversified portfolio such as $SPY, $QQQ or $IWM. PART 2: HOW CAN WE PROFIT FROM STOCKS OF MONEY-LOSING COMPANIES? We did find small portfolios that would be the most inefficient you could hold. We say small portfolios because diversification of risk increases efficiency, so these portfolios have between one and three stocks, held equally. Inefficient portfolios have significantly more risk than expected return, when normalized against the ‘all stock’ portfolio above (#2), or the $SPY. We call these our CQNS DOWN portfolios, because they are portfolios of stocks you should avoid holding, or can bet against after they move higher. They have seen significant daily price variance without significant BETA values. Sometimes you cannot short these stocks because they are not available to be borrowed. In those cases, you may be able to buy puts or sell calls. PART 3: HOW IS THIS DIFFERENT FOR STOCKS OF MONEY MAKING COMPANIES? Investors have a better chance investing in stocks of companies that make money. In contrast to the 8 / 1,157 stocks (0.0069) that were more efficient than $SPY, 124 individual stocks of money-making companies, or 124/2,399 stocks (0.052), were more efficient than the $SPY, $IWM or a broadly diversified portfolio. We found larger portfolios (from 2 to 14 stocks) that are significantly more efficient than a fully diversified portfolio. Your choice of efficient investments is diverse and allows for different types of stocks to be held. However, if you are not confident in picking individual stocks or stock portfolios, a broadly diversified portfolio is a very efficient and ‘safe’ choice. Also, if you are not confident in the direction of the overall market, then just choosing portfolios on the basis of efficiency could leave you with a significant BETA value of your stocks, which will overstate market movements in your portfolio. You win in advancing US equity markets but you lose in declining US equity markets. |
Stock Market BLOGJeffrey CohenPresident and Investment Advisor Representative Archives
April 2024
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