SMA Pro “Beta” Industry Leaderboard

Introduction

  • A combination of the right process and actionable intelligence are necessary to tilt the odds of winning trade in our favor.
  • An important starting point for all winning investments is identifying stocks that offer the best reward/risk (i.e., “what stock should I buy?”).
  • We take a systematic approach to identify our picks.  We search for the strongest stocks in the market: i.e., stocks significantly outperforming their peers, regardless of market condition, and demonstrate the flow of investment. We then bring these stocks into a curated list for further analysis.
  • We use this list as a starting point to apply our trade management process, including:
    • Entry/exit/escape
    • Position sizing within our portfolios
    • Determining if there are “sister strategies” we should be investigating
  • Our objective: Crush the annual S&P 500/Nasdaq performance (i.e. aim for up to 3X performance of the indexes performance)

How is our list generated?

  • We rank the entire universe of stocks based on a combination of fundamental criteria.
  • Once we rank the full set of stocks within our database, we filter out the following:
    • Stocks with prices less than $20
    • Stocks with low float/volume
    • All sectors except Technology
  • Given the list of stocks are generated on a fixed set of filtering criteria, it is possible for stocks to move in and out of our list (sometimes daily)
    •  This issue is by design – as daily prices change, stocks can move in and out of our criteria threshold
    • It does not mean the stock is no longer good enough for a trade. Once a stock appears on our list, we will determine if there is an appropriate setup from a trading/investment standpoint.

What does this list include?

  1. A ranking of tech and non-tech stocks in key industries.
  2. A list of stocks that meets our criteria for strength and money flow. We visualize the list as a candleglance with a link to finviz for quick analysis.
  3. A list of stocks that have dropped below the required threshold for a top 20% score.
  4. A current portfolio of stocks that in the top 20% list, shown as a candle glance as a table. We provide links to tear sheets (via CML Viz) and charts (via finviz).

What sectors does the industry leaderboard include?

  • We believe the technology industry will significantly outperform the market in the next 5-10 years. As a result, our current list will focus on tech stocks first. For more information, read the blog post here.
  • As part of our launch, we are also including an industry leaderboard that includes (e.g. consumer discretionary, financial services, materials, healthcare).

What performance can you expect from this list?

  • Our core objective: Beat the QQQ and S&P 500 indexes on an annual basis.
  • Performance can vary by each trader based on the stocks that they pick and their holding periods.
  • We do expect there will be trades that will not work in our favor – we plan to limit those losses via appropriate trade management.
  • Sample swing trade results can be found from our co-founder on Stocktwits!

How would you use this list?

  1. Swing trading: Accelerate your research by selecting trades that are high probability, high reward/risk.  In addition to providing the list, we will review and provide our recommendations.
  2. Long term Investing: Find the next potential multi-bagger and potential “sister strategy” plays

Example leaderboard scan results

Disclaimers:

All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, investment timeframe and liquidity needs.

Any opinions, news, research, analyses, prices, or other information offered by Seattle Market Analytics LLC are provided as general market commentary, and does not constitute professional investment advice from a qualified person, firm, or corporation.. the blog and its authors will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Please consult the appropriate professional advisor for more complete and current information on any security.

Seattle Market Analytics LLC shall not accept any liability with respect to the accuracy or completeness of any information on this site, or by any third party/affiliate. While efforts will be made to ensure the accuracy of the information, we are under no obligation to update or correct any information provided on this website. All statements and opinions provided across all communication vehicles are subject to change without notice.