Posts in category All News
TikTok Lays Out Past Efforts to Address U.S. Concerns Over Potential Ban (20-06-2024)
General Atlantic, Asia Opportunities sell 4.9% stake in PNB Housing Fin (20-06-2024)
Ishaan’s Longterm Portfolio (20-06-2024)
Yeah sure. So these are basically 6 Leg Option Strategies. It is completely automated. I have personally completed the Out - Sample and In - Sample Back Testing. For the last 2 years, the average return has been 2.5% on Invested Capital. I cannot share the exact details of my strategy because then I will be answerable to my clients.
But, it is an option selling strategy with a drawdown of less than 4% for the last two years. Last year in September, the options movement was really pathetic and that’s the reason behind the 4% drawdown. As far as this year goes, max Drawdown has been curtailed to 3%.
Minimum Capital Requirement is 5Lakhs. But this strategy is suitable for even bigger portfolios. Lets say you wan to invest 10 Lakhs in my Algo, I first invest that money into a Debt Fund which gives a 5-7% return annually. Then I pledge that units to get up to 80% ( 8 Lakhs ) of that fund as a trading capital. The strategy generates 25 - 28% return on this capital. So lets say I made 2 Lakh gain which is a 25% ROI, on the entire capital it is 20%. Adding the debt fund returns, it makes total ROI to 26-28%. Deducting the Brokerage and STT, etc ( 4% ) I am left with a gross return of 24%.
In this way I manage my capital. Now, the after tax profits from the Algo are invested into MF or Direct Equity depending on the Market Condition. One obvious question is, Ishaan if you can generate 25% ROI annually, why even invest in stock and MFs? Well, its an Algo and there will be times when it will Underperform. It has not till now but it might. So I have to safeguard my profits as much as possible. I have to be diversified. Although I haven’t faced huge drawdowns yet, it does not mean I won’t in the future. I have to be ready for the worst.
Hope this helps.
DIY Momentum QnA and Discussion (20-06-2024)
** I follow factor Investing Based on Z-Score:**
Why It Is Better:
- Objective Measurement: The Z-score provides a standardized way to measure how far a stock’s price is from its mean, allowing for a more objective comparison across different stocks.
- Statistical Rigor: Utilizing the Z-score incorporates statistical methods, making the investment process more data-driven and potentially reducing bias.
- Enhanced Momentum Capture: By focusing on deviations from the mean, Z-score can help identify strong momentum plays, as stocks significantly above or below their historical average may indicate strong trends.
- Risk Management: Z-scores can help identify outliers, potentially flagging extremely overbought or oversold conditions which can be useful for risk management.
Pros:
- Quantitative Approach: Reduces emotional and subjective biases in stock selection.
- Scalability: Can be easily applied to large datasets, making it suitable for institutional investors.
- Versatility: Can be used in conjunction with other factors like value, quality, or size to enhance a multi-factor investing strategy.
- Early Signal: Helps in identifying stocks that are starting to diverge from their historical performance, potentially catching trends early.
Cons:
- Over-Reliance on Historical Data: Z-score is based on historical price data, which may not always predict future performance accurately.
- Market Anomalies: Extreme market conditions can distort Z-scores, leading to false signals.
- Complexity: Requires a good understanding of statistical concepts, which might not be suitable for all investors.
- Volatility Sensitivity: Stocks with high volatility might frequently show significant Z-score deviations, potentially leading to more frequent trading and higher transaction costs.
While investing consider the following points:
- Data Sources: Reliable and consistent data sources are crucial for calculating accurate Z-scores.
- Backtesting: Share experiences and results from backtesting Z-score strategies to provide practical insights.
- Integration with Other Factors: Discuss how Z-score can be integrated with other factors like earnings growth, price-to-earnings ratio, or other momentum indicators.
- Real-World Application: Share examples of stocks that performed well using a Z-score approach and those that didn’t, to provide a balanced view.
- Continuous Monitoring: Highlight the importance of regularly updating the Z-score calculations to reflect the most recent data and maintain the strategy’s relevance.
Engaging in discussions about these points can provide a comprehensive understanding of Z-score based factor investing and its practical applications.
Democrats’ Dream of a Wealth Tax Is Alive. For Now. (20-06-2024)
Ranvir’s Portfolio (20-06-2024)
No… I ve sold out
Ishaan’s Longterm Portfolio (20-06-2024)
Thanks a lot.
I always feel like I could do more, save more, etc but somehow while living my 20s exciting Life and managing expenses, the process is slow, but still consistent.