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I use an automated evaluation system to choose what stocks to buy and sell. It has worked well for me, producing returns of 45% in 2016, 58% in 2017, and 28% so far this year (annualized, that’s 56%). My own system is designed for microcap investing, but I have produced…

In our anxiety to weigh the possibility of high returns against the risk of losing money—or the “risk” of high variability—we investors have, over the years, come up with over a dozen measures of “risk-adjusted returns.” The most commonly used are the Sharpe ratio and Jensen’s alpha, but I have…

For almost fifty years people have written about a “low-beta anomaly,” and despite a lot of literature on the subject, nobody has been able to figure out what exactly causes it. The Capital Asset Pricing Model (CAPM), which was developed in the 1960s by William Sharpe (the inventor of the…

Share turnover is the volume of a stock traded divided by its shares outstanding (or by its float). In this article I want to show what this metric is good for. (This article is based loosely on a recent working paper by Maria Kasch, a professor at Humboldt University of…

I highly recommend backtesting any portfolio strategy. I do my backtesting using Portfolio123, but there may be other options. I’ve backtested a lot of strategies over the years, and have run a number of correlation studies as well, comparing backtested results during one period to “out of sample” results for…

Academic studies have identified a large number of factors that can be said to have predicted outsized returns over periods of time, depending on how you measure their effectiveness. Various firms have created indices based on a number of these factors, ranging from low volatility to momentum. Beyond that, investors…

I am now launching my subscription service, The Stock Evaluator, on Seeking Alpha's Marketplace. I wrote a pitch for it here. CAGR since 1/1/16: 46%. My top ten holdings right now: RCKY, INTT, SEAC, CLUB, WSTL, ZYXI, PCOM, AUDC, RICK, III.    

I have long believed that the only way to make money picking stocks is to evaluate each stock on a large number of different criteria. My method has been successful so far, allowing me to make a return of 131% on my investments over the last 29 months (for a…

There is probably more disagreement about how to invest in stocks during a bear market than about anything else in investing. The disagreement centers around three fundamental points. First, is it better to stick to the same strategy in a bear market as in a bull market simply because it’s…

A few weeks ago a question came to me: how can we best predict a company’s earnings growth? So I designed an experiment to answer that question. The experiment is a little complicated, so I’ll discuss it at the end of this article. I’ll instead lead with my results, in…