FusionIQ in Barron’s
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Excellent commentary about FusionIQ in this weekend’s Barron’s:
Separating potential winners — and losers — from the herd.
MARKETS LIKE THIS DEMAND A CLOSER LOOK before you leap. Fortunately, there are plenty of online resources to guide you.
Some are oriented toward fundamental analysis, some toward technical signals, and some, like FusionIQ (www.fusioniqrank.com), incorporate both, and more.
A research and money-management firm, FusionIQ has just made its quantitative stock- and sector-screening system available to retail investors. A $40 monthly subscription buys you access to the kind of expensive, computer-based screening that quantitatively oriented investors, or “quants,” enjoy.
FusionIQ subscribes to the Pareto Principle, which states that 20% of stocks will be responsible for 80% of future gains. Its huge nightly data crunch separates potential winners (and losers) from the herd. Being invested across multiple sectors for the “long term” may qualify as diversification, but it doesn’t yield excess returns, explains CEO and longtime market analyst Barry Ritholtz.
“Buy-and-hold has been a jumbo money-loser this year,” argues Ritholtz, the subject of a recent Barron’sQ&A (”A Leading Bear Turns Bullish, Sort Of,” Dec. 8). “You can’t just sit around and say, ‘Bear Stearns and AIG are great companies, and I’m a long-term investor.’ ”
FUSIONIQ’S MODELS blend fundamental and technical metrics to determine the strength of some 8,000 publicly traded equities. They identify the most tradable issues and sectors with the lowest component of risk. FusionIQ also finds issues with unusual short-term strength or weakness, issuing Buy and Sell signals accordingly. In general, FusionIQ recommends subscribers hold a rolling portfolio of 15 to 20 issues for the intermediate term.
Beyond that, it identifies trading opportunities. FusionIQ models pinpoint highly ranked issues whose prices suddenly gap up 5% or more on high volume (and other conditions). They also issue alerts when analysts with good track records offer earnings forecasts outside peer estimates, and when short squeezes are in the offing — that is, when a highly shorted issue exhibits enough relative strength to force short sellers to cover their positions and boost the price further.
“We don’t care why stocks move,” says Ritholtz, “We just rely on our objective models to alert us to the opportunities.”
Awesome . . .
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Source:
Calling All Number-Crunchers
MIKE HOGAN
ELECTRONIC INVESTOR
Barron’s SATURDAY, DECEMBER 20, 2008
http://online.barrons.com/article/SB122973302642623075.html
December 22nd, 2008 at 11:10 am
Seems that if you cut Barron’s down in a big enough forum, you can get some good publicity from them! Well deserved, Congrats!
December 22nd, 2008 at 11:18 am
This is a great elevator speech! $40/month is a bargain…
December 22nd, 2008 at 11:24 am
That’s what I was thinking.
December 22nd, 2008 at 11:44 am
I am think of subscribing in ‘09.
I have never subscribed to a newsletter / investment service before. I always wanted the challenge of picking my investments myself. But I suppose it is the height of arrogance (ignorance?) to exclude professional input, especially from someone whose opinion you respect.
December 22nd, 2008 at 11:50 am
I’m subscribed to Fusion IQ. The product itself is impressive, and Peter’s daily updates and institutional research shouldn’t be ignored. Sometimes I get so tunnel-visioned on a certain theme or guiding principle that I end up talking myself into, or out of, ideas. This is a good tool to counterbalance the views I take on the investing world. Much higher level of customer service than I expected. Well worth the $40/mo.
December 22nd, 2008 at 11:55 am
BR,
there are still many who are lookin’ to ‘buy’m by the Box’
it wouldn’t be like you were selling dehydrated Dihydrogen Monoxide..
put that Turtle were he belongs–deep in 2nd Place..
December 22nd, 2008 at 12:09 pm
I think I’ve finally figured out Ritholtz’s appeal. It’s his matter-of-fact, candid way of speaking (with a dash of “duh!”), that is not typical of the normal Market-Speak that we hear and read everywhere else. It’s entertaining while factual, and lays it out so any fool can plainly see.
Been a fan for years, hope to be able to subscribe soon!
December 22nd, 2008 at 1:27 pm
Mac-friendly?
(I’d love to subscribe, if I felt confident that I would actually have a job in 6 months :p)
December 22nd, 2008 at 2:32 pm
Its web based, Firefox friendly, and definitely Mac compatible
December 22nd, 2008 at 2:55 pm
Barry, if you think the mathematical models you are using are “objective”, then you are wrong, though.There is no such thing as an “objective model”. Models are built based on human’s perception of reality. Reality is objective. Perception is subjective.
rc
December 22nd, 2008 at 3:07 pm
Of course!
Any system will reflect the biases of the system designers who programmed it. But that’s minor factor in how the system is built.
HOWEVER: Its a helluva lot more objective than the typical Human analyst approach: “I like this management team, I think this product will be good, I expect profits to meet expectations.”
That stuff is pure subjective, emotionally driven.
December 22nd, 2008 at 3:17 pm
Barry,
Do you think FusionIQ would help me to improve the performance of my fund? Considering VectorVest but perhaps FusionIQ would be better?
I use a very quantitative approach based on fundamental drivers such as earnings / sales growth, and technical factors such as relative strength and industry group strength.
Up 25%+ YTD but would like to do better!
December 22nd, 2008 at 4:08 pm
Quote for the decade: “Buy-and-hold has been a jumbo money-loser this year”.
December 22nd, 2008 at 4:13 pm
I’m a subscriber and I’d like to know what CPJ13 is referring to by “Peter’s daily updates and institutional research”. Most if the commentary I’ve been able to find on the site is very old. For example click into Research it looks like there is basically monthly postings. Last SP500 is from 12/04.
Also the Barrons article says BR recommends to subscribers that they should hold 15-20 names. Where did that come from? I just remember giving my credit card and getting access to the site. After that I’ve been on my own to figure out how to use it. Not a lot of help or guidance given.
Also once in the screens it would be nice to have a way to get back to the Home page.
Still evaluating the service but no doubt that this is the type of analysis needed for this market.
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BR: I am working on a “quickstart guide” and a longer manual — both should be on the site next month . . .
December 22nd, 2008 at 4:19 pm
Congratulations, Baz. About time someone who thinks outside the box gets some air play.