I think many people have benefited from the stock market rally and may confuse luck with skill, however, I created a method that has been successful and I'm curious to how it could be stressed tested.
I read in another post that https://whalewisdomalpha.com is a good way to research 13F filings to understand what institutional investors are doing. I was wondering if anyone has other references to trend or weigh what institutional investors are doing?
Below are a few of the main lessons that I've learned after losing money investing in biofuel stock when I was fresh out of college (2012).
· Discovered over time, more success with index funds that individual stocks. Concede that index funds outperform managed funds and Institutional investors have more resources to outperform retail investors. Always dollar cost average into and out of investments.
· Disclaimer that this is for long term (5+ years holding) investors and that have at least 80% of their investments in uncorrelated highly ranked index funds.
7 Steps to Finding High Alpha Stocks:
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Research consumer and social psychology trends. Millennial’s interest in health and wellness, travel, finding new online services to more efficiently do work and are conscious of company’s impact on the environment.
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Research economic trends like spending habits and interest rates.
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Research top exclusive performing growth funds over time. Included a link in the description.
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Identify similar holdings.
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Learn about what the companies do and if that aligns with the consumer trends you identified in Step 1.
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Identify which companies have the largest addressable market and competitive advantage (moat). (winner take all or winner take most)
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Evaluate % Revenue Growth over last 3 years (demand), Price/Earnings, Value/EBITDA relative to other companies in the same sector.
Optional: Rebalance every quarter by taking approximately 20% from the winners and allocate to losers.
All ideas and thoughts are welcomed. Thanks.
Submitted February 14, 2021 at 07:26PM by easymyk12 https://ift.tt/2Zf2EH5
