tag:blogger.com,1999:blog-5465015914589377788.post91524661503468459..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Stock Market MomentumMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5465015914589377788.post-51664080944721838572014-10-28T15:20:11.690-04:002014-10-28T15:20:11.690-04:00@Tristan: I was discussing momentum in a differen...@Tristan: I was discussing momentum in a different sense, but thanks for the link. I've yet to see anything that seems to be able to reliably capture the momentum effect after fees.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-84653990382944940192014-10-28T14:17:15.434-04:002014-10-28T14:17:15.434-04:00On the subject of momentum, I came across this ver...On the subject of momentum, I came across this very interesting paper which uses ETFs in an attempt to capture both absolute and relative momentum. The results are impressive. It is from the Optimal Momentum website.<br /><br />http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2042750Tristanhttps://www.blogger.com/profile/17926698274562627465noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-53344100637964991012014-10-20T15:02:41.469-04:002014-10-20T15:02:41.469-04:00@Gene: You can see the same thing with people who ...@Gene: You can see the same thing with people who play roulette. They believe things like a table is "hot". We're very good at seeing patterns in randomness.<br /><br />I wouldn't go so far as to say that stock prices are entirely random. In the short term they are largely random. I operate on the assumption that there are so many smart people looking for legitimate patterns that any simple things like buying at market highs isn't likely to work.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-63205521745607638682014-10-20T12:07:03.448-04:002014-10-20T12:07:03.448-04:00This is a good reminder, Michael. I am reminded o...This is a good reminder, Michael. I am reminded of an anecdote where researchers generated a random chart and had people analyze the pattern and predict future price movement. Of course random charts have the same shapes that technical analysts use for stock predictions. This makes sense if what you say about the random nature of stock movements is true.<br /><br />I did read a book once that proposed buying stocks at all-time highs since there will be no one waiting to sell to break even, putting downward pressure on the price. Perhaps there is some validity to this, which creeps into behavioural finance?genehttps://www.blogger.com/profile/05608927986297939720noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-2136639257738398322014-10-20T10:35:19.322-04:002014-10-20T10:35:19.322-04:00@BetCrooks: I don't base the exercise of optio...@BetCrooks: I don't base the exercise of options or SARs on my prediction of future stock movements. I use the analysis from one of my posts (but your mileage may vary):<br /><br />http://www.michaeljamesonmoney.com/2012/01/when-to-exercise-employee-incentive.htmlMichael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-7319036487707172382014-10-20T10:31:53.749-04:002014-10-20T10:31:53.749-04:00@Robb: If Friday had been a down day as well, that...@Robb: If Friday had been a down day as well, that would have given the world the whole weekend to predict the end of civilization.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-73456894602560016592014-10-20T10:20:19.501-04:002014-10-20T10:20:19.501-04:00Has it? Or was that just another gusty updraft? Th...Has it? Or was that just another gusty updraft? There is NO WAY to tell till it's all history....BetCrooksnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-29772672385869440802014-10-20T10:19:16.671-04:002014-10-20T10:19:16.671-04:00This is so true and why it was so hard to decide w...This is so true and why it was so hard to decide when to exercise our soon-to-expire stock appreciation rights. It was a total guessing game. Should we exercise now? Will the market go up or down? If we waited too long expecting it to go up just a dollar more, we could wake up to find it's down 25% for no particular reason.<br /><br />Sure makes investing fun!<br /><br />And I totally fail to see how this was in any way supposed to encourage better work performance!BetCrookshttp://financialcrooks.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-80625785482684749072014-10-20T10:18:17.494-04:002014-10-20T10:18:17.494-04:00True enough: By the time we were all writing about...True enough: By the time we were all writing about the latest "correction" in the markets last week, the TSX had reversed the trend on Friday.Robb Engenhttp://www.boomerandecho.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-13381050420960973972014-10-20T09:40:31.421-04:002014-10-20T09:40:31.421-04:00@Alan: It seems obvious that a physical constraint...@Alan: It seems obvious that a physical constraint doen't apply when we state it clearly, but it's amazing how many investors are convinced that recent stock market prices changes are highly likely to persist.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-12819349875757295122014-10-20T07:14:51.898-04:002014-10-20T07:14:51.898-04:00You are saying that the Stock Market does not foll...You are saying that the Stock Market does not follow the laws of Physics? Well that will cause me to change my investing strategies completely!!!Alan Whittonhttp://www.canajunfinances.comnoreply@blogger.com