That is for trading. It is a Sanlam system if I recall correctly and it detects patterns in technical analysis. Absolutely useless if you do value investing.
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Past performance good indicator for future performance?
- Thread starter marco
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That is for trading. It is a Sanlam system if I recall correctly and it detects patterns in technical analysis. Absolutely useless if you do value investing.
Mudshark
Well-Known Member
The thrust of my argument is that the primary result of a predictive model, namely performance and its probability, is of no interest and it merely serves to create a mental position of whether or not the result produced by the model is acceptable or not to the investor. The secondary result, which is not visible in most cases, is the result on the financial position of the investor. In almost all cases a negative result has a disproportionate, catastrophic effect as compared to a positive result. This is because most investors are financially fragile and one black swan event, which models do not cater for and which, although rare, will happen. I have never seen a positive event of the same magnitude as a negative black swan event. And yes, you can cater for a negative, catastrophic event but you will not see this possibility in a predictive model as by their very nature they smooth out performance and even ignore catastrophic negative events.
Ou grote
Honorary Master
In layman's terms...
Basically a model supports the decision you've already made.
If it doesn't, then use a different model.
( confirmation bias )
What models are also useful for, is creating a universe for you, so you can narrow down which shares meet your criteria.
When you have big bucks in a stock you will worry when it drops 7% for no reason other than profit taking. My SL is at -8%. Thankfully this was not triggered.
I was worried at one stage but CML has persevered and seems to have support at 4300. I was actually expecting support at 4200 as this would put it back on it's normal uptrend.
It will now lie low for some time as it always does after a good run to rest and then give another good run.
Increase in Assets Under Management ie AUM was 52% more than ave. This was mostly due to the ZAR/$ exchange rate. ZAR is weak so foreign money poured in.
This increase in AUM from foreign investors will keep up as long as the ZAR is weak. 65% increase from foreign investors.
CML normally does 70% pa but due to the above, it will be somewhat more.
Arthur
Honorary Master
Dunno if you're noticed yet, but the future is not a continuation of the past.
Neither is the present.
C happens.
Neither is the present.
C happens.
Its a disclaimer.
If not stated then a 'reasonable person' can/will assume that the future performance will be the same as the past and if not then have grounds to claim for non performance and or misrepresentation based on this. So by stating that the past is not a reflection of future results it is pointed out that they actually have no idea how things will go in future i.e. they make no guarantees (unless expressly stated).
If not stated then a 'reasonable person' can/will assume that the future performance will be the same as the past and if not then have grounds to claim for non performance and or misrepresentation based on this. So by stating that the past is not a reflection of future results it is pointed out that they actually have no idea how things will go in future i.e. they make no guarantees (unless expressly stated).
My argument is this:
If a share has a great history of good gains and it's future is secured by acquisitions of stellar Co,s or just in house developments that will grow the Co. into the future then it will be safe for continuous gains.
Cases in point:
CML has a great history looking at it's chart. The certainty that it will carry on is this.
The increase in AUM has increased substantially since they opened up to foreign investment. This will carry on as the ZAR is weak and the results will be seen this year.
MTA has a great history as well. Innovated as always. Their Green batteries and street light reflectors will keep it going up. The weak ZAR will help with it's exports.
So the continuation of the past will surely carry on into the future.
I mentioned these 2 as examples only because there are no others that fit this category. Historical analysis combined with future analyses is a great combination for safe investments and good returns.
Actually my broker has better words for this method:
The strategy I am currently using is to buy shares that show a high rating looking at metrics such as consistency and predictability of financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors (backward looking analysis). The shares must also show a high rating in metrics computed from an analysis of projected price appreciation three years out, very highly rated Corporate Bond Rates, and risk (forward looking analysis). A trailing 10% stop-loss is used on all company’s share prices in the portfolio. I also look at the individual company’s share prices to make sure they are performing.
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AlmightyBender
Executive Member
But marco, lets pretend that CML had a very topsy turvy price history but recently had restructured the company. Then you did your analysis and you found it to be a great choice (i.e. they are in the exact same position as they are right now) and you now need to make a choice of whether to buy or not.
Is your argument that you shouldn't buy it even though it would still give excellent returns based on your fundamental analysis? I'm sorry but that makes zero sense
Is your argument that you shouldn't buy it even though it would still give excellent returns based on your fundamental analysis? I'm sorry but that makes zero sense
I called it...
supersunbird
Honorary Master
Indeed you did.
No. I would not buy into any share that has a turbulent past as the turbulence more than likely will continue into the future.
A stock that has a history of continuous good smooth gains AND has good forward prospects WILL continue to do well into the future. The future prospects and fundamentals are very important for them to carry on the upward trend.
I have been researching this since the 2008 crash. Checked every stock on the JSE to find the ones that fit this criteria and found only 3.
I will not mention them again as I have already. They are perhaps not the best gainers, but they are solid and will carry on with good gains into the future.
Can you contest 500% average gains over 3 years and no divies reinvested? I think not.
Ou grote
Honorary Master
500% returns now....
Marco has not traded through a bear market and he does not have enough money to influence the share price if a stock like a Allan Gray do.In my view just luck the markets keep rallying and his system will come unstuck.Time will tell
Just for the record Coronation is a bull market stock,just like the share price of OML ,will be out of favour if markets turn to bear.Coke is a company that will almost always have strong fundamentals and if you want similar SA stocks look where the ruperts have invested
500% returns now....
I posted a link to a chart that shows 500%+ over 3 years and charts don't lie.
Actually I did in 2007/8 and lost 45%. This loss made me determined to regain it asap and I did so a year before the ALSI did.
As to influencing the price, you have no inkling. I can sell 1 share at a cheap price and that price will be the going price if bought.
I have seen share prices gain 4% on the day and at 1700 hrs a desperate seller would sell a few shares at -5% lower and the OCP will be -1%
We have had bull markets and bear markets over the years and CML has weathered both. It is not a cyclical stock and even goes up in bear markets.
Some sectors do go out of "favour" but CML has no sector to follow and just like "coke" it has strong forward prospects and fundamentals to carry on up.
Disagree,CML earnings are based on management and performance fees.If we go through a bear market asset prices will decrease and so will CML management fees.CML cannot continue growing their AUM forever..(not saying its a bad company) just saying your analysis is in my view flawed