Trading Like a Quant

Employees are increasingly concerned that robots are coming to take away their jobs. This is being seen in factories, restaurants and retailers. Driverless cars and trucks threaten the entire transportation industry. While many think that only jobs paying low wages are at risk, that is not the case.Many of Wall Street’s jobs are threatened by robots, including some of the jobs with the highest pay. For many years, successful hedge fund managers have been rewarded with annual compensation measured in hundreds of millions or even billions of dollars. Now, their jobs may not be so secure.On Wall Street, the robots ...
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A Strategy For High Probability, Small Gains

There’s an old saying that “slow and steady wins the race.” Of course, there are always different interpretations to these old sayings. But, this bit of wisdom can be applied as investment advice.Many new traders dream of finding a stock that gains 100% in a matter of weeks and rolling those gains into another stock that delivers a gain of more than 100% within a few weeks. They dream of this process continuing, month after month. And, soon, in their dreams they are living on a private island.That is certainly a possibility. But, there are other ways to find success ...
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Adding Relative Strength to Value

Recently, a reader made a comment on one of our articles about value stocks. The reader agreed that the stocks sounded like good investment opportunities but wondered when the stocks were likely to move. To answer that question, we need to look beyond value. Another investment tool, relative strength (RS), is better suited for that answer.RS is a term used by technical analysts. It is a measure of comparative performance. In other words, RS answers the question of whether or not a stock or an ETF is outperforming the market. If the stock is beating the market, it is said ...
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Low-Priced Income Stocks With Double-Digit Growth Potential

The Federal Reserve seems to be following a disciplined but slow policy of increasing interest rates. According to officials quoted in the financial media that seem to be familiar with the Fed’s policy making process, the Fed could raise the Fed Funds rate to more than 1.5% by the end of the year, well above the record low near 0% but well below what investors would like to earn on short term deposits.The Fed Funds rate is the benchmark short term rate the Fed sets. This is technically the interest rate that banks and credit unions charge other depository institutions ...
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Trading Amazon, With Low Risk And a Small Amount of Money

Amazon.com, Inc. (Nasdaq: AMZN) has been one of the best performing stocks of all time. Since its initial public offering (IPO) in 1997, the stock has delivered gains of more than 63,000%. But, when looking at a long-term chart of the stock, it is reasonable to ask if anyone other than Jeff Bezos, the company’s CEO, has held the stock since its IPO.When looking at the chart, the size of the gain is the most obvious feature. The stock appears to have gone virtually straight up for more than twenty years. The next chart takes a different view. Looking at ...
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The Best Trades for June, Following A Strategy That Is Up Almost 14% This Year

The S&P 500 has gained almost 9% since the end of last year, defying the prediction of many experts for a bear market. This is a strong market and the bulls have been well rewarded. As difficult as it is to beat a bull market, we have been doing that this year with a simple strategy. And we have been publishing our trade recommendations in advance each month.At the beginning of the year, we began sharing real time buy recommendations with you for a successful trading strategy. This month, we continue with that process.The strategy is among the simplest seasonal ...
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An Options Tool for Income, Gains and Limited Risk

Investment goals generally include income or capital gains. Many investors believe income requires sacrificing some potential for gains. With popular investment alternatives, this is largely true. For example, bonds are usually thought of as income investors. If a bond is held until it matures, the potential gains are limited. Most changes in price are due to changes in interest rates and these are often ignored by long term investors who simply hold the bond for income.On the other hand, stocks are usually bought and sold for capital gains. Dividends, some traders say, are a pleasant accident of trading. What they ...
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Cheap Stocks Insiders Love

Most of us like to believe life is fair. But, in reality, very few market transactions are fair. Economists believe almost all transactions involve asymmetric information. In most transactions, one party knows more than the other party. For example, when consumers are buying a used car it seems fair to assume the seller knows more about the car than the potential buyer. This problem is so well known many states and the federal government have taken steps to level the playing field.Their efforts to create fairness are called “lemon laws” and usually require sellers to compensate buyers of used cars ...
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