Internet Holders:How to Trade It, Build with It
THE IMPORTANCE OF TIMING--Internet Holders (HHH)
7.69 years June 21, 2002--February 26, 2010
Worldwide ETFs Portfolio--Hypothetical
The Signature-Rank MethodSM
See Comments below
(Definitions and System Rules at the bottom of the page)
BUILDING A PORTFOLIO
Some members are more interested in having and holding a portfolio of holdings in order to diversify and thereby reduce risk. I am not among them.
Still, there is much to recommend signature-rankSM
analysis as an investment method to build whole portfolios, the components of which would trade infrequently and have few or no losses while held.
Such a method would be a complete, all-weather, professional (or individual) portfolio-management system for pensions, 401k's, TSP, Taft-Hartley funds, et al, or just plain old widows' and orphans' or lazy man's trusts.
And it would be easy to do and beat me to it.
Take the 50 biggest cap stocks in the 100 Stocks--3 Portfolios holdings. Test each for its highest profit signature-rankSM
weekly. Then select and buy those stocks whose ranks are above their signature ranks. There you are--a portfolio perhaps to love and to hold. When the market rolls into a bear, one by one they will drop into cash. At the bottom of the bear, they will singly or in a rush ascend to fully invested. For months on end, they will be in cash, jointly or severally.
Definitions and System Rules. The rank of a stock in a portfolio is the numerical standing of performance (profits over time--numbered from 1 to n, 1=best) of the stock relative to all the other stocks in the portfolio. The 'signature-rank' is that fixed-rank level of each stock as its own benchmark, above which it will give its own best cumulative performance over time (it's equity curve). It is found by testing each numerical level one at a time, e.g., 1, then 2, etc. Logic would expect a signature-rankSM to be found somewhere not far from the median rank of all the stocks in the portfolio. There are 23 stocks (ETFs) in the Worldwide ETFs Portfolio. The median rank is 11.5. I found HHH's signature-rankSM empirically to be 7.5. Rules: Any weekly rank above the signature-rankSM, buy and hold the ETF. Any weekly rank below it, sell and go to cash. (The current rank is easily seen in the weekly Rankings table--sample here.
How rankings are determined. This note, first posted in 2005, may help explain how the rankings are derived.
Current system satus
Own and hold as of March 12, 2010.
Posted
3/14/2010 7:26 p.m. EST
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