While I am traveling, I wanted to CHERRY PICK a few charts from my day job: Fusion IQ:

AMGN had a buy signal on 6/23/2008
Amgn_62307

DNA had a buy signal on 7/1/2008
Dna_7107

 

Not all buy and sell signals are going to give you returns like this; however they will give you an added “head’s up” that something underlying in the name has changed. And there is a stop if the name goes to a neutral.

These signals, used with FUSION IQ’s rankings, can add serious alpha to your portfolio.

70+ add and rising, add to longs…

40- and falling, sell or avoid…

Individuals can subscribe at the Fusion IQ site;  Institutions looking for more information should contact Peter Greene at pgreene-at-fusioninvest-dot-com

Advertisement over.

Category: Quantitative, Technical Analysis, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

24 Responses to “Adding Alpha to Portfolios”

  1. madcow says:

    Amgen and Genentech are major biotech companies, they are mostly dependent on FDA decisions. I am wondering how can any TA predict behavior of these stocks. Amgen got some good news from the FDA concerning their anemia drugs (not too bad changes in labels); Roche offers to buy the remaining stake in Genentech and take it private. Unless these things leaked, I cannot see how could the market/TA predict these events.

    Final remark – AMGN’s fate mostly depends on Denosumab (osteoporosis drug, potential blockbuster), if it gets approved – to the Moon baby, if not, well … I wish I would have a crystal ball/TA to predict this FDA decision.

  2. Steve Barry says:

    Since we are looking at charts. I have never seen a chart like the 2 year chart of JPM. It really looks like a sine wave with expanding amplitude. Of course this is an unstable feedback loop. Is this going to meltdown or up and when? (My opinion is down with their derivative exposure)

  3. Sia says:

    How about next time you share a few picks when they are made, this is just useless.

  4. CNBC Sucks says:

    Hate to tell you, madcow, but as a guy educated on the fundamental valuation of companies, I didn’t buy ANY technical predictor BS for ***ANY*** company. Then, I saw CNBC’s version of “fundamental analysis” (like, you gotta be kidding) and then the market’s reaction to news (up when it’s good, up when it’s bad) and I reconsidered any EMT / DCF approach I was taught in b-school. I don’t believe in market rationality anymore. So BR’s approach is as good as anyone and kudos to him for his good calls. I am not a short-term trader, so my approach with any investment is to study the living daylights out of it and see if I am comfortable living through a depression with that stock instead of devalued cash.

  5. Andrew says:

    Lol, Sia, he’s a businessman.

    Go back to welfare.

  6. Andrew says:

    Lol, Sia, he’s a businessman.

    Go back to welfare.

  7. Damian says:

    I’m confused as to how you get to the “buy” or “sell” signal – the ranking of the individual stocks doesn’t look very high in the screen shots, so how would I have known to buy them?

  8. rk says:

    barry, give out a discount code maybe. you know it is deflation time now.

  9. psg1 says:

    Andrew says:

    “I’m confused as to how you get to the “buy” or “sell” signal – the ranking of the individual stocks doesn’t look very high in the screen shots, so how would I have known to buy them?”

    That’s where your own analysis comes into play. Are the buys in a sector you like? Do they meet your criteria for valuation, etc? Is there an earnings announcement in the near future? These types of ranking systems are most valuable when used to narrow your focus to a smaller watchlist rather than provide you with a blind buy list.

    And for those that still have trouble with this whole TA thing… TA attempts to uncover institutional interest in issues via observation. Think of it as fundamental analysis once removed. You don’t need to know much about fundamentals to uncover the footprints of those that do!

  10. techy says:

    i am sorry barry…but this sounded like that advertisement on marketwatch about that guy who made $3 million from 33k in two years…and he will willing to share his tricks for only Shipping and handling cost.

    if anyone really had the crystall ball…they will be zillionaires.

  11. Dervin says:

    Sia, if you check out the fusionIQ blog he gives out free advice on individual stocks (the FusionIQ subscribers might get the info a ahead of the blog readers).

    I took the leap and started buying his recommendations early this month. And they are moving nicely. The Unrealized Gain has been about 11%.*,#

    The drawback is these stocks are volatile. Huge soul-crushing % swings in a day.

    And here’s something about investor psychology. Even though from one month of following FusionIQ’s advice I’m insanely ahead of the game – I’m still nervous about plopping down $300 for a one year subscription.

    *One stock DAIO is down 10%, but I’ve only had that for two days – so I’m willing to give it some more time before I call it a dog.

    # and of course, past performance is not indicative of future performance, and I’m just some guy who doesn’t even have a blog. So really, I suggest you consult your professional financial adviser before you follow any of my writings (I won’t even call it advice). I won’t be offended.

  12. Dave says:

    Damian: the ranking shown on the screenshots were for 7/29. He’s merely showing where the buy signals were in the past, not what the rankings were on those occasions.

    Barry, on the fusion iq site, in the faq, it states:

    “Q: What is its track record? Has it been back-tested?

    A: Track records tend to refer to actively managed portfolios. Since FusionIQ™ is a software platform there is no track record to speak of, however the system has been rigorously tested. The results can be viewed by clicking here.”

    But there is no link to click on to view the results.

  13. Ed Dunkle says:

    Some people have crystal balls which work at least for a while. I have a friend who went from zero to nine figures in ten years because of his crystal ball. Don’t be so cynical.

    /back to work on my crystal ball ;)

  14. Dave says:

    And one more comment for those who discussing the merits of the fusion iq system:

    I don’t know whether it works or not, I haven’t tried it, and as I pointed out in my earlier comment, I can’t even find the back-tested results.

    What I do know, is that if this is a good system that produces outsized returns, eventually so many investors will use it that it will become impossible to realize gains from using it. In other words, the system will become market information which itself will move the market. A buy signal will lead to an instant jump in price, etc.

    If Barry has succeeded in making a truly insightful system for picking stocks, the long run outcome is that he will merely make the stock market more efficient.

    But before then, enjoy!

  15. Josh says:

    Nice calls Barry. How about you show us some of the crappy calls too? Unless you never get those.

  16. f says:

    Great calls

    but , they don’t define Alpha correctly

    time for a refresher course in Portfolio Theory and CAPM

  17. ECONOMISTA NON GRATA says:

    Fusion IQ is another great weapon to keep in your trading arsenal.

    All you need is one or two good ones to make up for all the bad ones and more….

    The most important weapon in your trading arsenal is your personal discipline (a component of integrity). Without that, you’re LOSER…. Fusion IQ or no Fusion IQ, rich or poor.

    Best regards,

    Econolicious

  18. Adrian D says:

    You too, Brutus?

  19. tradahmike says:

    Barry, thanks for posting these 2 excellent picks.

    This brings to mind a question. I have visited your Fusion IQ blog many times, and I see the “Breakout” stocks and other Buy situations that your system generates.

    Often, the charts illustrating the current Buy signal contains past Buy or Sell signals, some of which can be seen to have been successful and some which have been unsuccessful.

    Do you have any kind of measure of the “batting average” for the signals in your various systems? That is, how many raw winners and losers do your systems generate, before any additional analysis is performed?

    This would require choosing some kind of exit methodology to determine wins and losses, but it might help to partially quantify the value add for your TA screens.

  20. uncool says:

    Steve Barry, thanks for putting up that chart link of JPM. Indeed, it is wierd, and will be interesting to watch.

  21. CNBC Sucks says:

    Good catch, f, but since we (actually the market) have already debunked EMT, your CAPM goes out the window. Might as well get rid of the alpha and beta terminology altogether and just call Amgen and Genentech today’s “Daily Double”.

  22. You don’t have to leave it to chance, you can add alpha by buying low P/E stocks. Check the analysis here

    http://investmentscientist.com/2008/07/09/

  23. TR says:

    how is this fusion iq ranking any different from the rankings put out by gradient, rabbitt, ford analytics etc?????

    as a “quant”, cherry picking 2 winners out of how many stocks ranked is laughable. do you give any advice on portfolio construction? picking “good” stocks is one thing, constructing a decent portfolio is another animal.

    why don’t you do this: for every ranked stock, show its ex post 1 week, 1 month, 3 month, 6 month risk adjusted excess return against the market, otherwise this is all pretty unimpressive-

  24. CDizzle says:

    http://www.merriam-webster.com/dictionary/advertisement

    I do think there is validity to the comment(s) on TA and biotech/FDA dependent stocks.

    That JPM chart is cool.