Post #1502 by DragonTales on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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ratio 5 day return excluding today/200 day return excluding today, bottom 10;
then reduce further as follows:
ratio(price,MktCap) bottom 7;
then reduce to 5 stocks further:
ratio(5 day return excluding today/float) bottom 5

Translated to English, that's:

10 stocks with worst 2-through-6 day return compared to 1-201 day return
then of those 10, the 7 stocks with lowest share price compared to company market cap
then of those 7, the 5 stocks with the worst 2-through-6 day return compared to how many $ of company stock are available for trading.

Did I get that right? If so, I don't get how that has anything to do with what the stock might do in the future. It certainly has nothing to do with company metrics. Is it simply a possible reversion to the mean? Does it survive a Mound of Toast test, i.e. 10,20,30 picks; 2,3,6,12 month holds?

Tails

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