ALL THINGS BIG AND SMALL 2.0

Click on images for full-size and details. By this time you must be pretty disillusioned with analysts' estimates and forecasts as well as what Companies tell us they are worth i.e. their book value.Using ValuEngine's Model and Viscovery's Self-Organizing Map, we take a look at what kind of stocks appear in our stock pick list if we ignore analysts' estimates, Price/Book ratios, Price/Earnings and Price/Sales ratios. We also ignore the forecasts of ValuEngine's Forecast Model that does simulation treating stock prices as mean-reverting stochastic processes, since at this stage we believe that certain Model variables such as Average Volume [Liquidity], Volatility, and Size should have greater weighting in the Model parameters. In the top image, the statistics of Cluster 3 [S3] are the most favorable when measured in terms of standard deviation from the screened population. The screen used is somewhat similar to the "stocks for a recession screen" of the Ma...

Autocorrelation characteristics of Exxon Mobil [XOM] Autocorrelation characteristics of Petroleo Brasileiro [PBR.A] Autocorrelation characteristics of Statoil [STO] Autocorrelation characteristics of Google [GOOG] * click on images for full-size and details. It is a fact that a stock's past price affects its current price. i.e. A stock's price is correlated with itself for any given period of lag. A less technical explanation of this phenomenon would be that investors look to a stock's past price as a guide for future prices. The 'collective memory' of a stock's investors thus manifests itself as its autocorrelation characteristic. The degree of autocorrelation [AC], and the total effect over time varys greatly with each stock. In the context of ValuEngine's Valuation model, a high autocorrelation level indicates high persistence in over or undervaluation, and a long period to correct the mispricing. If we know the AC characteristics of a stock, it can be...

The big difference between Western medicine and Chinese medicine is that the former treats the symptoms, while the latter treats the causes. For example, a Western doctor will give pain killers, antihistamines and antibiotics for the relief of the symtoms of influenza. A Chinese doctor on the other hand, believes that the influenza was caused by a temporary break-down of your body's immune system caused by imbalance of your Yin [negative, cool, female etc] and Yang [positive, heat, male etc] properties. He will therefore brew you a herbal concoction to restore the balance of Yin and Yang in your body and allow its immune system to function normally again. Most of the Chinese herbs that give energy and power such as Ginseng and Cordyceps [caterpillar fungus***] restore deficiencies in Yang. But some people, may suffer from too much Yang, and this also leads to fatigue, headaches, being prone to influenza, sore throat, teary-eyes, tinnicus, sniffles, swelling of the lymph nodes etc....

Yunnan province, in the South-west of China, is close to Myanmar, Laos, Vietnam and has a small area in the North-West bordering Tibet. This mountainous region has a climate that is tropical and yet pleasantly cool the whole year round. Kunming, the capital is known as the City of Eternal Spring. The area is very rich in natural resources, and was one branch of the famed Silk Road. Yunnan's products include the best rare Chinese medicinal herbs, the famous Pu-erh tea, historically sent as tribute to the Emperor in Beijing, jade, silk, flowers, iron ore and gold. Foodwise, it is famous for its mushrooms and ham. Many species of strange-shaped mushrooms thrive in this wet, cool environment and some of them are known for their medicinal properties. The dry mountain air also makes Yunnan ham the best in China. And it is the province with the largest number of ethnic minorities (26). Otherwise known as Hill tribes. The presense of these tribes make this area an anthropologist's par...

Hi! Just a reminder that George Sinkler will be playing at Jim and Sue McCauley's this Sunday evening from 6 to 10. Bring your drinks, a snack to share and don't forget something for George. DIRECTIONS: From Buckingham, at the intersection of Rts 263 & 413: Take Rt 413 south toward Newtown. Go 1.5 miles. Look on the right for the entrance to "Village of Buckingham Springs". Go in the entrance. At the stop sign turn left, then the first left again onto Juniper Circle. The 6th left is Elder Ct. Hope to see you! Art (Suzie Bartel's Assistant!!!!!!!) A tomato and sunflower stall on the PA side of the Delaware opposite Frenchtown Shad festival, Lambertville NJ The bridge across the Delaware at Stockton,NJ Old-fashioned Truckstop near Coopersburg PA The bridge that links Lambertville NJ with New Hope PA A street in Doylestown, Bucks County PA Farmer's market, Doylestown PA The email above, from a friend who did not know that I had moved back to Singapore, bring...

* image of a complex system taken from http://www.necsi.org/ , the New England Complex Systems Institute.Nassin Nicholas Taleb's book The Black Swan [ see http://www.fooledbyrandomness.com/ ] is about the great impact that highly improbable events can cause in financial markets, in history, in natural events, on our working life, in our personal relationships etc. Taleb makes us aware of and fear black swans. But not all black swans are bad. There are good black swans too. In life, highly improbable events can lift you up to heights never imagined in your wildest dreams. The obscure writer/musician who was 'discovered' and rose to stardom. The small businessman who had a lucky break, a chance meeting that led to success. That first job interview with an interviewer who liked you. The lonely Blog or the YouTube video that, by word of mouth,and being in the right place at the right time drew a million visitors a day. These are all examples of riding to the sky on a black sw...

Dry Bulk shipping companies are those that carry raw materials such as coal, iron ore, grain, fertilisers and chemicals in their specialized ships. The demand for dry bulk shipping is a good leading indicator of the health of the world economy. The Baltic Dry Index is an index of freight rates for dry bulk shipping as compiled by the Baltic Exchange in London. Since October, the BDI has gone down by 40 %, and with it the share price of the dry bulk shippers. In this experiment, using the Self-Organising Maps [SOM] in http://www.viscovery.net software. [for more on Self-Organizing Maps see http://en.wikipedia.org/wiki/Self-organizing_map ] we took the data for 156 stocks from the Transportation Sector. The data included the output of ValuEngine's quantitative models and covered variables such as Valuation, EPS growth, 1 year-forecast retrun %, 1-month forecast return%, P/E ratio, Sharpe Ratio, 1 yr return %, 5 -yr return % etc. There were more than 30 variables. For more on ValuEn...