The expected market return for next year is 5.4% based on $SPY $QQQ and $IWM US equity indices.
1. Holding the $SPY provides lower price volatility than holding all CQNS UP or CQNS DOWN run stocks equally. This could be due to the advantages of capitalization-weighting.
Top CQNS UP stocks are those you should own to outperform the market with lower risk:
a. Best industries in the CQNS UP run are semiconductor and bitcoin related.
b. Best 'large cap' individual stocks in the top 50 CQNS UP run are $NVDA $AMAT $QCOM $TROW $AAPL $BLK and $TXN. $TXN scored slightly worse than holding all 2,366 stocks equally.
Top CQNS DOWN stocks are those you should avoid, or short, as they will underperform the market with higher risk. Some of these will trade like roller-coasters, if you like that kind of stock.
a. Biotech and MEME stocks top the list. These stocks have moved aggressively over the past year, and many are in a steep decline since the FOMC meeting in December.
b. Select stocks from the top 50: $SLNH $LWLG $AADI $ALLK $PHUN $CRTX $BSQR $FREQ $ACY $PROG $EAR $GATO $AMC $GME $EXPR $AEHR $REPX. These are all far worse than holding all 1,140 negative net income stocks (as individual longs).
Overall insight: the CQNS model has been relatively consistent with its picks over the past 45 days. Keep shorting stocks that are declining and keep owning bitcoin and semiconductor related stocks.
The other insight is that our model can only find ~50 stocks individually in the CQNS UP run that score better than all 2,366 stocks. This makes sense, as picking stocks that go up is difficult. Our model suggests there are 2% of the stocks that are favored. These stocks do change.
The model, however, suggests that picking and holding any one stock from the CQNS down run is 'worse' than holding the full set of 1,140 CQNS down run stocks. Diversification helps you to avoid losing money, but it does limit your upside to make money.
Eight CQNS DOWN Run 'dog-star' stocks that fell dramatically vs. last year's average price:
For those with stinky fingers (bottom pickers):
CQNS UP stocks & decline vs. average last year's price:
$SQ Block Inc. -59%
$MARA Marathon Digital Holdings Inc. -41%
$ICHR Ichor Holdings Ltd -29%
$TROW T. Rowe Price Group Inc. -26%
President & Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.