Not exact matches
With $ LULU below key horizontal price support of the $ 60 level, its 40 - week moving
average, and recently below the 10 - week moving
average as well, the
stock could suffer a
pretty ugly sell - off over the next several months if broad market conditions continue to deteriorate.
That's obviously high relative to the broader market (and
pretty high in absolute terms), although it's well below the
stock's five - year
average P / E ratio of 65.6.
Pretty simple stuff, below is a look at the percentage of S&P
stocks above their 50 day and 200 day moving
averages in the following two charts.
By
pretty much all measures, it offers access to higher growth rates at lower valuations than the
average European
stock fund does.
Pretty good performance from a bunch of
average stocks.
The good news first, the
stock market rebounded
pretty nicely from yesterday's drop with the major
averages regaining most of their losses.
That's obviously high relative to the broader market (and
pretty high in absolute terms), although it's well below the
stock's five - year
average P / E ratio of 65.6.
e.g. on a universe of all liquid
stocks with
pretty generous liquidity filters (price > $ 1, mcap > $ 100 million, on the market for at least 1 year, inflation - adjusted daily dollar volume in the last 63 days > $ 100,000), before friction, and hold for 5 days (no other sell rule), tested on all start dates Sept 2, 1997 forward to Aug 18, 2015 and then
averaged CAGR, leaving an
average of 3360
stocks in the universe to then test: a. 17.6 % cagr bottom 5 % of
stocks left by bad 4 day return (requiring price > ma200 was slightly worse than this at 17.4 %; but requiring price < ma5 was better at 18.1 %) b. 16.0 % cagr bottom 5 % of
stocks left by bad 5 day return c. 14.6 % cagr bottom 5 % by rsi (2) d. 14.7 % cagr for rsi (2) < 5 I have tested longer backtests on simpler liquidity filters (since my tests can't use all of the above filters on very long tests) and this still holds true: bad return in the last 4 or 5 days beats low rsi (2) for 1 week holds.
I'd be a bit more picky in terms of
averaging down on a
stock I might not want to go too heavy on due to anticipated risk, yield, or something else, but I'm
pretty excited about increasing the size of this position fairly quickly, which is something I tend to do quite often as I discussed in the article.
June looked
pretty bleak, but just as the major U.S.
averages reached a 5 % correction,
stocks reclaimed some lost ground and ended the first half of the year with the largest January through June gains since 1999.
GWMO's chart is
pretty representative of the return from an
average junior resource
stock:
Then that gives you your target, and then it's
pretty easy to back into, okay, I'm going to assume the
stock market and my mutual fund
averages 10 %.
Even though that situation seems
pretty ludicrous, isn't it exactly what we see with your
average stock picker?
Buffett after he was done with the net net thing and by the mid 1960's and with Mungers influence would buy a basket of
average business that he could make good earnings yield on and looked like
pretty good business and bought them during a correction of an industry or general
stock market correction then sell them once they became higher valued..
To sum up, although it's
pretty clear we should expect lower than historical
average returns for
stocks, there is little evidence for a strong downward force on
stock returns due to expected interest rate increases that is anything like the bond situation.
They've always been there — the Great Depression from 1929, the 1940s when
stocks pretty much didn't go anywhere, the «Black Monday» of 1987, the dot - com bubble of 2000, the collapse of Lehman in 2008... and yet the US market has
averaged a whopping 9.96 % annually from 1920 to 2010.
In general with
stock ETFs that trade very liquid markets this has historically not been much of an issue, as the creation / redemption mechanism on these types of assets is
pretty robust: it's consequences on typical spread is much more important for the
average retail investor.