Saturday, May 12, 2018

Buy When Others Fearful - Part 2

Buy When Others Fearful - Part 2

Ok, I have analyzed stocks I held at start of 2018 (just a seed list).  I followed these rules:

if a stock dropped 10% or more from its high post 1/1/18, I bought at average price the following day. 

Then if it dropped another 10% from that price, I would buy another tranche and so forth.

I would then sell each tranche after a year (obviously haven't gotten there yet).  Note this has nothing to do with MFI, although there are MFI stocks in the list.  Rather, it is using a formula to decide when to buy and sell stocks (where I have pre-selected list of stocks) and taking emotion out of it.

Before I show results, several observations:


  1. You can definitely get falling knife syndrome.  You see this with stock like GME that keeps going down, so each 10% down you buy another tranche.
  2. You can get some huge wins, KLDX was down a ton (due to a negative result from mine), but then bounced all the way back as they were bought.  Generally, if a stock is down - I will buy the same number of shares, not the same $ amount as initially.  I think buying same $ amount is smarter.
  3. There are times you will need courage as stocks move on individual news and on overall market conditions.  Around Feb 9th was a bottom and so a lot more stocks were qualifying in that week.  It would take courage to buy as market had dropped more than 10%.  But that is why it is "buy when others are fearful".
  4. This time period is way too short to say whether this is good strategy... though I have to say I like it.
  5. Individual stocks (like OMER) can have a big impact.

So here is the list:



Stock Date Price Shares Current Div Gain/Loss Pct
AXRX 24-Feb         30.16            332         14.03 0           (5,348) -53.5%
AXRX 28-Feb         18.01            555         14.03 0           (2,210) -22.1%
AXRX 24-Apr         13.45            743         14.03 0                431 4.3%
AXRX 4-May         11.76            850         14.03 0             1,930 19.3%
AMID 9-Feb         11.69            855         10.35 0.41              (793) -7.9%
AMID 21-Mar         10.56            947         10.35 0.41                192 1.9%
ASB 9-Feb         23.50            426         27.10 0.15             1,596 16.0%
AUPH 1-Feb           5.21         1,919           5.60 0                749 7.5%
BKE 9-Mar         19.44            514         24.10 0.25             2,526 25.3%
BTG 6-Feb           2.88         3,472           2.89 0                   35 0.3%
CA 26-Mar         33.88            295         35.32 0                425 4.3%
CARS 5-Feb         27.55            363         25.97 0              (574) -5.7%
CBWTF 11-Jan           1.75         5,714           1.24 0           (2,914) -29.1%
CBWTF 5-Feb           1.40         7,143           1.24 0           (1,143) -11.4%
CBWTF 26-Feb           1.22         8,197           1.24 0                164 1.6%
CBWTF 28-Feb           1.17         8,547           1.24 0                598 6.0%
CELG 6-Feb         94.70            106         84.54 0           (1,073) -10.7%
CELG 26-Mar         86.28            116         84.54 0              (202) -2.0%
CNNEF 12-Feb           3.43         2,915           3.26 0              (496) -5.0%
CPLP 9-Feb           2.97         3,367           3.13 0.08                808 8.1%
DIN 14-Mar         68.81            145         74.98 0.63                988 9.9%
EGO 10-Jan           1.27         7,874           0.95 0           (2,520) -25.2%
EGO 12-Feb           1.18         8,475           0.95 0           (1,949) -19.5%
EGO 28-Feb           1.08         9,259           0.95 0           (1,204) -12.0%
EGO 23-Mar           0.94      10,638           0.95 0                106 1.1%
EGO 28-Mar           0.84      11,905           0.95 0             1,310 13.1%
EVC 6-Feb           6.39         1,565           4.15 0.05           (3,427) -34.3%
EVC 16-Mar           5.05         1,980           4.15 0           (1,782) -17.8%
EVC 26-Mar           4.55         2,198           4.15 0              (879) -8.8%
EXK 30-Jan           2.39         4,184           2.92 0             2,218 22.2%
EXK 9-Feb           2.10         4,762           2.92 0             3,905 39.0%
EGC 31-Jan           6.67         1,499           6.73 0                   90 0.9%
EGC 7-Feb           5.89         1,698           6.73 0             1,426 14.3%
EGC 9-Feb           5.11         1,957           6.73 0             3,170 31.7%
EGC 19-Mar           3.95         2,532           6.73 0             7,038 70.4%
FDEU 23-Mar         17.52            571         17.59 0.24                178 1.8%
FNB 26-Mar         13.36            749         13.39 0                   22 0.2%
FSM 29-Jan           4.74         2,110           5.70 0             2,025 20.3%
FULT 23-Mar         17.68            566         17.45 0.12                 (62) -0.6%
GCAP 12-Jan           8.41         1,189           8.12 0.06              (273) -2.7%
GCAP 31-Jan           7.26         1,377           8.12 0.06             1,267 12.7%
GCAP 27-Mar           6.53         1,531           8.12 0             2,435 24.3%
GILD 6-Feb         78.20            128         66.16 0.57           (1,467) -14.7%
GILD 3-May         65.55            153         66.16 0                   93 0.9%
GME 23-Jan         16.96            590         12.71 0.38           (2,282) -22.8%
GME 14-Feb         15.59            641         12.71 0.38           (1,604) -16.0%
GME 22-Mar         13.84            723         12.71 0              (816) -8.2%
GSS 22-Jan           0.80      12,500           0.71 0           (1,125) -11.3%
GSS 12-Feb           0.72      13,889           0.71 0              (139) -1.4%
GSS 14-Mar           0.66      15,152           0.71 0                758 7.6%
HIL 10-Apr           5.32         1,880           5.65 0                620 6.2%
HPQ 6-Feb         20.63            485         22.71 0.14             1,076 10.8%
ICHR 2-Feb         28.93            346         26.02 0           (1,006) -10.1%
ICHR 9-Feb         21.85            458         26.02 0             1,908 19.1%
KL 30-Jan         14.86            673         19.45 0             3,089 30.9%
KL 9-Feb         13.52            740         19.45 0             4,386 43.9%
KL 3-Feb      100.14            100      111.07 0.59             1,150 11.5%
KLDX 11-Jan           2.05         4,878           2.47 0             2,049 20.5%
KLDX 7-Feb           1.70         5,882           2.47 0             4,529 45.3%
KLDX 20-Feb           1.52         6,579           2.47 0             6,250 62.5%
KLDX 1-Mar           1.34         7,463           2.47 0             8,433 84.3%
KNOP 6-Feb         20.20            495         20.15 0.52                233 2.3%
LADR 26-Apr         13.82            724         14.90 0                781 7.8%
MD 13-Apr         52.87            189         46.09 0           (1,282) -12.8%
MD 27-Apr         45.94            218         46.09 0                   33 0.3%
MSBI 6-Feb         30.06            333         31.85 0.22                669 6.7%
MSGN 26-Mar         23.15            432         19.20 0           (1,706) -17.1%
MSGN 1-May         20.68            484         19.20 0              (716) -7.2%
MTG 9-Feb         13.86            722         10.46 0           (2,453) -24.5%
MTG 19-Mar         12.27            815         10.46 0           (1,475) -14.8%
MTG 10-Apr         10.67            937         10.46 0              (197) -2.0%
NMM 19-Jan           2.24         4,464           1.92 0.02           (1,339) -13.4%
NMM 12-Feb           2.07         4,831           1.92 0.02              (628) -6.3%
NMM 23-Mar           1.83         5,464           1.92 0.02                601 6.0%
NMM 9-Apr           1.63         6,135           1.92 0.02             1,902 19.0%
NRZ 8-Feb         15.72            636         17.98   0.50             1,756 17.6%
NS 6-Feb         30.30            330         21.71   1.70           (2,276) -22.8%
NS 9-Feb         23.60            424         21.71   0.60              (547) -5.5%
NS 2-Mar         20.23            494         21.71   0.60             1,028 10.3%
NSU 31-Jan           2.14         4,673           3.55        -               6,589 65.9%
O 6-Feb         49.19            203         52.99   0.66                907 9.1%
OCSI 9-Feb           7.48         1,337           8.48   0.14             1,524 15.2%
OMC 8-Mar         73.29            136         75.08   0.60                326 3.3%
OMER 16-Jan         18.98            527         19.89        -                  479 4.8%
OMER 19-Jan         16.55            604         19.89        -               2,018 20.2%
OMER 6-Feb         14.81            675         19.89        -               3,430 34.3%
OMER 15-Feb         11.38            879         19.89        -               7,478 74.8%
OMER 23-Feb           9.64         1,037         19.89        -            10,633 106.3%
PACW 26-Mar         49.11            204         53.38        -                  869 8.7%
PSXP 12-Feb         48.81            205         49.53   0.71                294 2.9%
QCOM 6-Feb         62.83            159         55.23   0.57           (1,119) -11.2%
QCOM 23-Mar         54.73            183         55.23        -                     91 0.9%
RDI 30-Apr         15.50            645         15.82        -                  206 2.1%
RGR 2-Feb         50.80            197         61.00   0.23             2,053 20.5%
RGR 1-Mar         44.42            225         61.00   0.23             3,784 37.8%
RHI 9-Feb         52.26            191         63.15   0.28             2,137 21.4%
ROSE 5-Feb           7.07         1,414           7.25        -                  255 2.5%
ROSE 9-Feb           6.59         1,517           7.25        -               1,002 10.0%
ROSE 2-Apr           6.15         1,626           7.25        -               1,789 17.9%
SAND 5-Feb           5.01         1,996           4.81        -                (399) -4.0%
SAND 16-Mar           4.51         2,217           4.81        -                  665 6.7%
SBRA 3-Feb         16.53            605         20.16   0.45             2,468 24.7%
SELB 9-Jan           9.14         1,094         11.29        -               2,352 23.5%
SELB 12-Feb           8.45         1,183         11.29        -               3,361 33.6%
SGYP 5-Jan           2.23         4,484           1.89        -             (1,525) -15.2%
SGYP 5-Feb           1.94         5,155           1.89        -                (258) -2.6%
SGYP 2-Mar           2.01         4,975           1.89        -                (597) -6.0%
SGYP 28-Mar           1.77         5,650           1.89        -                  678 6.8%
SGYP 26-Apr           1.57         6,369           1.89        -               2,038 20.4%
SIMO 16-Jan         47.26            212         48.26   0.60                339 3.4%
SLSDF 17-Jan           0.41      24,691           0.33        -             (1,852) -18.5%
SLSDF 24-Jan           0.36      27,778           0.33        -                (833) -8.3%
SLSDF 2-Mar           0.33      30,769           0.33        -                  154 1.5%
SLSDF 14-Mar           0.29      35,088           0.33        -               1,579 15.8%
SLSDF 1-May           0.26      38,462           0.33        -               2,692 26.9%
SYNT 6-Feb         21.12            473         30.07        -               4,238 42.4%
TGNA 5-Feb         13.73            728         10.66   0.07           (2,185) -21.8%
TGNA 20-Mar         12.05            830         10.66        -             (1,154) -11.5%
TGNA 11-Apr         10.59            944         10.66        -                     66 0.7%
TGP 8-Feb         18.65            536         17.75   0.14              (408) -4.1%
TK 25-Jan           8.97         1,115           8.89   0.11                   33 0.3%
TK 1-Feb           8.17         1,224           8.89   0.11             1,016 10.2%
TOO 31-Jan           2.51         3,984           2.84   0.02             1,394 13.9%
TOO 9-Feb           2.22         4,505           2.84   0.02             2,883 28.8%
TORXF 5-Jan           8.35         1,198           9.93             1,892 18.9%
TORXF 2-Mar           7.34         1,362           9.93             3,529 35.3%
TORXF 28-Mar           5.92         1,689           9.93             6,774 67.7%
VIAB 7-Feb         32.89            304         30.22   0.20              (751) -7.5%
VIAB 4-Apr         29.90            334         30.22                107 1.1%
WNC 9-Feb         22.97            435         20.16           (1,223) -12.2%
WNC 23-Mar         20.30            493         20.16                 (69) -0.7%
All 7.7%
All x OMER and EVC 6.7%


Overall +7.7% (and note many of these not held for more than a few months).  It drops to +6.7% if I remove the best and worst stocks (OMER and EVC).

I am going to continue to track.  I really like the concept and need to have a good think about how to incorporate.  In a prolonged downturn, one could run out of money to be buying new positions.  And I think you'd want to start with a shorter list of stocks than my trial here... otherwise too many transactions.
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