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By now, we've all heard "past performance is no assurance. . . blah blah blah" so often, it almost sounds liked a nursery rhyme. But it may be time to stop a moment, think about it, and possibly give the saying a new, broader, spin. Usually, the phrase is meant as a warning that cautions us against assuming the future will be as good as the past. Actually, though, this is a two sided coin. We need to also be careful about assuming the future will be as bad as the past. Full Article »
Mon Mar 29, 2010 By Marc Gerstein 1 comments
We've all been frustrated recently about performance difficulties regarding our models. But things seem to be getting better and there is evidence to the effect that 2008 was an aberrant year in which the market almost stopped differentiating between worthy and unworthy stocks. Even so, the quants remain unhappy and it's still easy to get discouraged if you listen to enough market chatter. Don't get caught up in that. The sort of modeling we do at Portfolio123 is different from what the soapbox quants do, and our approach is just fine. Full Article »
Fri Oct 23, 2009 By Marc Gerstein 0 comments
It's been about a year since the stock market fell off the cliff and every strategy seemed to go bad. Can we finally put that to rest and go back to modeling? Full Article »
Wed Oct 14, 2009 By Marc Gerstein 10 comments
Back in my days at Reuters.com, when I felt feisty and wanted to generate some angry reader e-mails, I had a sure-fire formula: write an article extolling benefits of following sell-side analysts. That never failed to produce a deluge, regardless of what the performance numbers really showed. Then came 2007-08, when every strategy, it seems, struggled - including those that involved use of analyst recommendations and/or earnings estimates. Now, nearly halfway into 2009 and with the market seeming to have found it's footing again, it seems a good time to take another look at the sell side. Besides the usual curiosity about which formerly successful strategies have regained their luster, analysts present a special case. It seems that the additional downsizing and restructuring that hit Wall Street in the recent past opens the question of how the modern sell side, such of it as continues to exist, compares with the one we got to know and love (or whatever) for much of the mid-2000s. Full Article »
Thu Jun 11, 2009 By Marc Gerstein 5 comments
Market timing is a hot topic. We've seen how easily even a multi-year, or multi-decade, record of strong investment performance can be more than wiped out with a single big "miss." On the other hand, the difficulty of this task, coupled with the reputation it may have garnered due to overly outlandish claims made by some, has caused many to dismiss timing as something that can't really be done. In previous blogs, I discussed the Portfolio123 timing model, explained how I use it in a regime-switching protocol, and explored what might happen if the model was erroneously bullish while stocks fell. Today, I consider the consequences of being bearish at a time when stocks are rising. Full Article »
Thu Feb 12, 2009 By Marc Gerstein 0 comments
