Notes
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- graphs, past market history, past amounts
- “It turns out that daily to stocks are returns are weakly autocorrelated (i.e. they have momentum, but the costs of exploiting this pattern are high. You have to buy and sell stocks every day, and in doing so, you have to pay brokerage fees. Thus, while major patterns in stock prices should not exist, weak patterns that are too costly to arbitrage1) may persist.”
- I have seen this twice now
How does zecco.com effect this? No-fee trading (limit on trades / mth)
- “Recent research has suggested that markets may actually follow to multiple-year cycles. But can you make money? It is still hard to tell! Current hedge fund operators and high-tech investors use sophisticated “artificial intelligence” and “neural nets” to find patterns. Some make money. Is it luck? If it works, why do they offer you the opportunity to buy their software?”
- Fundamental Prediction
- earnings, financials, external factors (interest rates)
- earnings per share (see below)
- balanced portfolio
- Technical vs Fundamental
- Is there really a big difference between these? Both are quantitative values upon the company, and are of past or current data.
- Forecasting can be done on both and is similar. Forecasting on fundamentals can involve standard equations and variables, though.
- Some fundamentals may be forward-looking, but they are not always given and you do not know how accurate it may be. On other hand, future fundamentals from a company may be more accurate than what others and yourself know.
IDEA: Ratio Idea- compare ratio or relation of stock price or market value to companies total worth or net value
- this can tell you whether stock is over or under valued
- show it in visual representation (graph), similar to how you can see 52-week averages overtop of share prices
- may need to percentize the two superimposed graphs, like how google does to compare multiple tickers, so you are comparing appropriately
- Income Statement
- Used to analyze a companies revenues / sales (top line), expenses on those sales, and finally net income (bottom line)
Revenues - Expenses = Net Income- EPS Earnings Per Share
- EPS = income / # of shares
- Diluted EPS is considered to be a more reliable way to measure EPS.
- takes into account options, warrants, bonds that could possibly be turned into shares
- IDEA: Web 2.0 financial keeping and tracking app
- for businesses wanting to keep track of their finances online and anywhere
- OLAP, DSS, & dashboard-like reporting benefits
- gives ad-hoc or on-demand output of ongoing income statement, balance sheet, etc
What I did
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- tried to understand sengupta statement forecast excel sheets
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- made change to /* Earnings per share */ reference needed
- Read and re-read the class assignment papers to understand a big picture of the assignment
- looked into existing sengupta excel sheets; I want to get the non-calculated data from Research Insights, and be able to easily change the ticker
- used code from classmates excel (with permission), and pasted correct finanancial items into diff places
- had difficulty with which periods were being shown when you did a function like =SPWS(s_ticker,”SALE[-3]”)
- -3 from what?
- Also had difficulty with finding correct financial items
- Answer:
- Got all Income sheet fields to link to RI and forecast future period, like sengupta did in past
- Created system architecture visual representation
- Animated, click twice to see gif animation
- returned to notes from last Rada investment class (in binder)
1)
Arbitrage: Attempting to profit by exploiting price differences of identical or similar financial instruments, on different markets or in different forms.
