Category: Asymmetric Investment Returns
Asymmetric Investment Returns is a risk and reward profile with more upside profit than downside risk or loss.
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Fundamental Valuation: Is the Stock Market Cheap or Expensive?
For me, and everyone else even if they don’t realize it, the price trend is the final arbiter. For more than two decades, I’ve focused my efforts on developing systems to identify trends early in… Read More
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Observations of the Stock Market Trend, Bond Market, and Investor Sentiment
Nothing drives investor sentiment like a strong price trend. The S&P 500 stock index is down over -20% this year, and it was down -24% YTD just two weeks ago. The stock index peaked at… Read More
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Does Trend Following Work on Stocks?
Some recent conversations prompted me to revisit some of the return capture and loss avoidance conclusions from the 2005 paper, Does Trend Following Work on Stocks? Conclusions:The evidence suggests that trend following can work well… Read More
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Market Action Discounts Everything
The philosophy and rationale of technical analysis is there are three premises on which the technical approach is based: Market action discounts everything. Prices move in trends. History repeats itself. “The statement “market action discounts… Read More
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The Smart Money Method: How to pick stocks like a hedge fund pro – on Asymmetric Payoffs
One of my recent reads is The Smart Money Method: How to pick stocks like a hedge fund pro (November 24, 2020) by Stephen Clapham. Naturally, when he mentioned “Asymmetric Pay-offs” I have to share the… Read More
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The weight of evidence is becoming increasingly bearish for the US stock market
“The trend is your friend, until the end when it bends.” Stock indexes making higher highs and higher lows is a good thing – until it isn’t. I run a combination of systems. Most of them… Read More
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Global Macro Trends in Uncharted Territory
I primarily focus on directional price trends, momentum, volatility, and investor sentiment. That is, until economic trends trend to extremes. Then I start observing these global macro trends. We monitor thousands and data streams and… Read More
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What’s going to happen next with the stock market?
I respect history. The past is no guarantee of future results, but it’s all we have to draw statistical inference from, so we need to understand its risks and rewards. We use past data to… Read More
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Good news for the stock market
Something we have warned about for a while now is the elevated valuation level of stocks in general. To be sure, I search for “Shiller PE” here on ASYMMETRY® Observations to mention the most recent… Read More
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Bolted to the chair
Mark Twain’s mother said: “I only wish Mark had spent more time making money rather than just writing about it”. I am no Mark Twain. I’m a tactical trader, so that’s my first purpose. I’m… Read More