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March 16, 2005

GICS Tables & Stock Lists, Wed., March 16, 2005, 1:22 PM

Just after 8 AM today, my PC network card failed after a power spike had shut down the cable TV and ISP. The latter problem happened Monday morning as well (thanks, I believe, to a hacker), but the network card was not damaged then and I was back in business in 15 minutes.

Today, bam!

Unfortunately I was reviewing an article via MT publishing, just ready to upload, and I lost everything because today I was doing something I often remind myself not to do, which is to compose blog articles on MT and not in MS Word on my PC. This happens about twice a month, so shame on me. The hacking problem just started to escalate this week.

So, I have just returned from yet another visit to the computer store. A new network card was installed and some additional anti-spyware software, including the beta version of the new Microsoft anti-spyware system. It seems the hacker was altering my IP address. I am not a happy camper.

Now for the good news.

Today the GICS top banner link is working. You can go to the tables and see links to the S&P Global 1200 stock lists, which are sortable by column heading. This is a neat research feature I put together for you, which took a lot of work to do.

I hold S&P in the highest regard, but in order to make a buck (which is good), S&P decided not to release to the public (as a free service) the 4th level GICS coding. So I had to go through the list, one stock at a time, and do the coding that I think is appropriate.

Like any road map you will find differences between my work and S&P's published data (if you can afford it), but the important point here is that this presentation is just a roadmap and there are different routes to success.

In time, I will add ETF's and other leading company stocks to these lists, and I'll add links to charts with technical indicators, which will help you better research equity markets.

As you know, the Global 1200 is comprised of the U.S. S&P 500, plus the S&P index component issues for Canada, U.K., Europe, Hong Kong, Japan and Latin America. There are no stocks for many of the key equity markets of the world, like the PRC, Russia, India and so on. I intend to add the largest cap stocks in these markets to my lists.

You will soon see the high correlations between the price data of stocks in groups, and across regions, as big capital pools flow their money into and out of these stocks.

Using my GICS facilities, you will also be able to quickly visit the stocks of international companies within each sub-industry group, which will help you diversify your portfolios.

By this summer, I hope to install icon links in these stock lists that will take interested traders to a premium website I am developing that will give on-demand buy-hold-sell recommendations computed by my algorithmic trading models. Already about 60 percent of the professionally managed funds are using algorithmic trading support, and I intend to make mine available to everybody at an affordable cost.

This morning a reader pointed me to the PowerShares XTF, which supposedly is a "smart" ETF in that rather than just modelling the index levels for trading within a single security, the XTF uses algorithmic trading to try to outperform those same indexes. I believe PowerShares has four indexes modelled, but you'll have to get your own info on this.

I have no further comment at this time on algorithmic trading systems except to say that it's a case of duelling computers. All the major trading houses have teams of the brightest mathematicians and quants developing software that can out-perform the decisions of individuals. It's kind of like Big Blue software that, after many years in development, can now beat most chess grandmasters, most of the time.

But here's the rub. People write software. If a world-leading chess grandmaster could effectively programme a computer to perform at his/her level, and more, then I believe his/her computer system would beat the committee of mathematicians and quants every time.

That, I don't think, has ever been proven, either with respect to chess or the capital markets, but I intend to pursue the goal. It ought to be a lot of fun doing what I'm doing now, which is consistently beating the market (forgive me for GM!), but put it into a sophisticated computer system that does it for me.

I'm already thinking of the android image for Bill Cara. Younger, thinner, and a lot more hair. Maybe I'll even use the photo image of the man in the top banner.

And, I suppose I could computer-generate the best voice I can find at my nephew's leading voice-over company, InteractiveVoices.com.

Isn't this more fun than getting hacked?

BCara@BillCara.com

Posted by Posted by Bill Cara on March 16, 2005 01:06:01 PM | Category: GICS Sector