Advanced Math Investing: Quantitative Techniques
The Math
Quantitative investing (Quant Investing) represents an investing technique typically employed by the most sophisticated and technically advanced hedge funds.
Quant algorithms are developed by people who have spent time in physics, math, computer science, and statistics disciplines …..Wikipedia
Computerized trading is here to stay. A good strategy is to find quant advisors that haven't been bought out by large banks and investment funds.
Our math. Advanced Math Investing utilizes two quant metrics to analyze our equity investments.
First
We analyze individual companies' financial statements. Then, using our proprietary math formulas, we derive a dollar value for the entire company. We divide that number by the outstanding shares, which gives us a fairly valued share price. Then we compare our fairly valued share price to the actual traded share price, and subsequently, we give the companies our star ratings. 1 star = 10% undervalued. 2 stars = 20% undervalued. 3 = 30%. 4=40%, and our highest 5 stars are for 50% and over-undervalued companies. We avoid overpriced companies. Naturally, we invest in our undervalued companies.
Second
We analyze market direction using our proprietary formulas. This program doesn't give us a daily up or down signal, so naturally, we won't be trading in and out on a daily basis. That's day-trading…not what we do.
Rather, it gives us a longer-term "buy" or "sell" signal, which enhances our star rating analysis.
We take profits on our star-rated stocks following our sell signals and re-buy them when our buy signals come back. Seems simple. But remember, it's advanced math.
Risk disclosure
Advanced Math formulas are complicated and may have limitations and difficulties in their usage. We cannot guarantee any specific performance level. Equity investments are subject to various extraneous risks including, but not limited to, economic risks, political risks, & currency risks.
Safety
We cannot access client funds. We use "limited trading authority" to manage client investments.
Client information is private and not disclosed.