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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (20290)	6/13/1998 3:22:00 PM
From: Dale Baker	Read Replies (1) \| Respond to of 94695

Gersh, what source do you use to track Fed actions on liquidity, just general news or is there a specific site?

To: Gersh Avery who wrote (20290)	6/13/1998 9:59:00 PM
From: Berney	Respond to of 94695

Gersh, Thanks! It has been an interesting evolution. Let me summarize it. Four years ago I decided to make the transition from accounting to financial advisor. Got my RIA, etc. But, a funny thing happened along the way. I found I enjoy the research much more, even if it hasn't paid me a dime. Gave up the RIA last year, and am no longer an advisor. First, I attacked mutual funds. Using morningstar's data, I manually entered 55,000 data elements into a speadsheet. I developed a system that selected mutual funds using their data, and it had a higher percentage that beat the Index than their 5 star funds. Cute, but after a year, only 44% of my selections beat the Index, and when I was in school that was an F. Next, analyzed all the mutual funds in existence over 1,3,5,10 and 15 years and came up with a success ratio for some 34 categories. That is, which categories had the greatest potential of yielding the best returns. I called it a Success Ratio, but probably should have called a Failure Ratio, considering the horrible results of many categories. On to individual stocks. Entered all of Value Line's stocks into a spreadsheet and developed my first acquisition strategy. I called it reasonable momentum. Their was a book on the market a few years ago called the Dividend Investor that put forth the proposition of investing in the DJIA 1-5 stocks based on dividend yield. There seemed to be something missing in their numbers. They had all the data in the back of their book, so I recast all the DJIA stocks from 1974 to 1990. It was clear that the place to be was DJIA 11-15. This still works well. Next, I entered 20,000 data elements from the S&P Stock Guide into a speadsheet. It confirmed the importance of Return on Equity, a major ingredient in my FA scoring system. Done a few other FA things along the way. The problem I had is selecting this great FA stock and, frequently, watching the price go down in the short term. Something else was necessary. Thus, TA has been a natural evolution. I've come to believe that FA and TA are really not that different. Both are looking at past data and trying to anticipate future results. Quality FA and TA work most of the time. Nothing works all of the time. Your concept of liquidity makes intuitive sense. However, I'm maxed out watching all the things on my horizon. If you develop it further, let me know. Berney