Apr

11

Readers of Dailyspec normally speak of picking spots to trade S&P for brief statistically anomalous moments they identify. They do no try static timing approaches to beat the S&P by only trading the S&P. A weasel could put out predictions and escape scientific judgement by evading the selection of a benchmark for comparison of results. Since legitimate reasons exist for not using the S&P as a benchmark for taxable investors in a trading account, the skewer arrives as a dull blade. The Thomson Reuters Eikon idea holds more interest.

What strikes me is that as the competition increases, events could go the way of the cellphone data provider model. They get rid of the business model of the non-negotiable onerous bi-annual contracts first, and then they offer to pay the remainder of the competitor's contract to get clients to switch. Will that cut the margin projections for all of them and make it a lower margin business generally? The new tax inversion rules cannot help US based business valuations and might lead to foreign based lesser-market share competitors gaining in their relative profit margins as well.

Russ Sears writes:

Much time is wasted looking for static rules to sell stocks, but the converse is where the static rules apply, what time to buy stocks. I believe many investors confuse the potential to time individual stock sell indicators with the market as a whole. My battles have not been finding static ideas or getting institutions to implement ideas that beat the market. If it is static, it is not labor intensive enough to give investment department credit beyond luck. Static market ideas are simple by their nature, and therefore its easy to label them as luck rather than sophistication, and when they are 10/ 20 baggers to cash them in once someone decides they need money to lessen the "risk" because it was just lucky. The same goes with long term stock holders. The kids find a nice portfolio of stocks that the wise old deceased patriarch held forever, which made the family rich. The kids are told to sell into something with less risk because the portfolio just got lucky.


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