I just realized we passed my third blogiversary. I thought I would spend a few posts over the next month highlighting some of the odd 600 posts to look at what I consider to be important topics. Of course, we’ll take a look at some of the more idiotic, as well as insightful ideas on here.
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We started the blog chatting about some topics of true diversification as well as risk parity. A couple of good reads here:
“Engineering Targeted Returns and Risks” – Bwater
“The Biggest Mistake In Investing” – Bwater
“Risk Parity Portfolios” - PanAgora
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A reader emailed it asking about an old “Is it Time to do a Templeton” article and thought I would update this post from March 8th where we screened for stocks trading below $1 on the New York and American stock exchanges.
It returned about 300 stocks from a list of 2500, and we then sorted the stocks by # of insider buys. Since then the list had an average performance of 244% vs. around 55% for the microcap index. The list of names is below, and there was only one loser of -10%, and multiple 500% plus gains… :
ADK
CFW
DRJ
END
ETM
FOH
GLA
GMO
GSB
GTF
GTN
HH
IHR
NTN
OMN
OPK
ROX
RPI
TCX
XFN
Regarding the first paper you listed (“Engineering Targeted Returns and Risks”) do you know what the updated returns would be if it included 2008? I'm guessing it would have taken a sizable hit.
Thanks
Rich
I had their returns on here but they asked me to take them down. If I remember correctly, it was down -30%? (Alpha did well however.)
Risk parity for the retail investor is hard to come by. Anyone know of a product that comes close?
Meb, in all seriousness, why not allocate a significant % to a strategy like this? I suppose it's because you would have to have been confident that the market was about to turn (and of course no way to determine that), else you could drop another 50%, who knows. Did you buy any of them?
Does this strategy with $1 stocks only hold at the market bottom or in bull markets? Does this increase of 244% correspond to the stock's betas?
I wish I had the tools to test this myself. Where would I get such tools?
Does this strategy with $1 stocks only hold at the market bottom or in bull markets? Does this increase of 244% correspond to the stock's betas?
I wish I had the tools to test this myself. Where would I get such tools?