We offer regular reviews of topics that are important to asset owners and managers who trade capital markets. Our opinions and insights are freely shared.
What I have learned over 50+ years of trading
Change is constant. Markets are competitive. For the owners and managers of assets, only students of the market survive. We must learn to adapt to change. That involves the continuous study of social and political change, macro-economic data and business conditions, international trade and taxation, commodity prices, interest rates and market liquidity, emerging markets, industry life cycles, corporate balance sheets and operating fundamentals, investor sentiment, trading research methodologies, and so forth. Needing to be a specialist at just one thing is a myth. Multiple interests and skills are required.
We all have it in our power to develop sufficient expertise to trade as well as most professionals. However, like anything in life, the experience needed to survive and prosper takes time and should not be rushed.
How to trade, survive and prosper
Through our publications, we offer a practical guide that incorporates an holistic approach to trading capital markets. Before we should buy any security, we need to understand the market and how to trade.
We believe we should buy only what we need and to buy the highest quality. The basic choices are Growth, Value or Yield. You should ignore any other marketing label put by to the sell-side. Understand that large-, mid- and small-cap companies or companies that operate in different regions of the world is simply your preference.
To ascertain the highest quality for Growth, Value and Yield requires a study of corporate fundamentals, comparing performance of one company to all other companies. In our proprietary database of almost 5,000 companies, we input the data of about 15 datapoints from Bloomberg and Thomson Reuters and then calculate weekly composite scores for Growth, Value and Yield, which we then rank from best to worst. For the most part, we are interested only in the highest quality companies. For order entry timing optimization, we study the market price & volume data for each of these companies from about 50 datapoints we capture from various sources on a daily and perhaps intra-daily basis.
Each portfolio is created and managed to meet different investor requirements; however, the trading methodology we use is consistent with what we know from experience works.
To guide our readers, we produce a Cara 100 list that balances Growth, Value and Yield considerations. This freely accessible list of what we consider to be quality companies is updated at the end of each quarter year, based on relative fundamentals, giving a range of large-, mid- and small-cap companies.