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To: ynot who wrote (6742)9/13/1999 12:29:00 AM
From: MonsieurGonzo  Read Replies (2) | Respond to of 11051
 
ynot:" whatnot "

>by the way is there an url specific to SPU SPZ education ?

...ask these guys:

Subject 8128

>have you looked at QQQ:SPU

? ...SP99_ futures and SPY, ~SPX.X cash index = tous la meme chose. FWIW I keep a chart of SPY+NDX, called "SPYNDX"...

geocities.com

...it measures/charts the performance of a portfolio where you bought 50% SPY and 50% QQQ and held it since the beginning of the year. The chart was scaled in such a way that the values for SPY and QQQ were each made equal to "50" at the beginning of 1999; thus, their sum = "100", and a value of ~121.5 on CLOSE last Friday means that your "SPYNDX" portfolio has gained 121.5 minus 100 = ~21.5% YTD.

I call this SPYNDX portfolio strategy the "BigEasy" (^_^)

...it minimizes specific risk but, has the effect of double-weighting any stock that exists in both the NDX-100 and S&P-500 index; Thus, most of the large-cap TechStocks in NDX-100 are double weighted - meaning that SPYNDX = "BigEasy" portfolio assumes TechStock sector risk.

I've been studying SPYNDX = "BigEasy" this year. It is damn difficult to beat without assuming ( a lot ) more risk. But it can be done...

One way is to substitute the OEX-100 index for the 50% SPX-500 "SPY" component. Right now, we don't have a convenient OEX.X - "oyster" stock vehicle like SPY - spyder but, there exist index funds that are OEX-100 - based, which could be used. This construct performs a little better - by assuming not only TechStock sector risk but also LargeCap sector risk.

Another way to beat 50:50 = SPY+QQQ old "BigEasy" is to substitute the index's bellwethers GE + CSCO. By assuming specific risk, this portfolio has a greater reward but, it is a lot more volatile - as well as vulnerable - than pure SPX+NDX or OEX+NDX index-based constructs. But GE+CSCO has out-performed OEX+NDX has out-performed SPX+NDX over the last five years, fwiw.

So, I have "back-tested" these three constructs for 60 months. In one simulation, I assumed an estate consisting of ~$650,000. invested in bonds with an annual yield of ~7.5% which is the same thing as generating $4,000. every month available for investment in "BigEasy". It turns out that simple, periodic monthly investing of ~$4,000. into "BigEasy" = SPX+NDX works best when done in the (middle of the) third week of every month, fwiw.

-Steve