In Business Since 2001 We accept Paypal
Home Article Directory
More from Bill Platt
"Bill Platt for Book Authors" Youtube Channel
Training for Book Authors
Other Resources for Book Authors & Publishers
FictionPlots.com (350+ Plots & counting)
Please Support Our Advertisers

 
D9 Hosting


The Persistency Phenomena, Program Trading and the Small Caps

Copyright (c) 2006-2022

The concept of trading for persistency is simple. The rules are this; buy on an up day and sell on a down day. The results of this strategy have blown away buy and hold and were demonstrated in the article: - The Non-Random Walk Theory Persistency. The article also showed that the day to day upward consistency of the market deteriorated around and during the Bear Market; this could be seen in the growth of $1000 equity charts in the above mentioned article. Some people argue that this deterioration was due to program trading, I would argue that is was caused by the Bear Market and the after affects of September 11, 2001. The conclusion is persistency is an exploitable phenomena and while it may have deteriorated for a while it never disappeared in the small cap markets. Note: It is also important to remember day to day persistency is only one of the ingredients CET Capital uses in our over all methodology.


First I Will Address the Issue of "Program Trading"

After it is all said and done an increase in "program trading" is just another way of saying an increase of volume. When investors talk about volume they are talking about liquidity. One way to measure "program trading" is to look at the Commitment of Traders open interest. As of March 7, 2006 open interest was 695,690 contracts for the S&P 500, 74,882 contracts for the NASDAQ 100 and 34,247 contracts for the Russell 2000. The action is, has been and will be in the S&P 500. The reason why "program traders" or "big money" play the S&P is because of its attractive liquidity. Small cap stocks by their nature are illiquid. The less liquid a market the larger the bid-ask spread. Try liquidating a billion dollar position of small cap stocks. You can do it but it will take awhile and you might not get the price you like. It is the small cap illiquidity issue that deters active trading and it is the lack of active trading or volume which is one ingredient that leads indices to higher persistency. That said as long as the Russell 2000 stays small cap dominated it should remain more persistent then the larger cap indices


The Golden Rule of Investing Is Preservation of Capital

The easiest way to lose money in the markets is to sit on a losing position. Trading for persistency forces you to sell after one down day therefore you do not hold losing positions. The flip side to that coin is you can lose money if you are trading during choppy market conditions. For example, if you buy on an up day and the market closes down the next day forcing you to sell.


Persistency Is Here To Stay

Lastly I want to show you a chart of trading for persistency on the Russell 2000 vs. buy and hold of the S&P 500 from 1998 until February 2006. During this period the Russell 2000 had a 55 percent chance of closing up two days in a row. Trading for persistency during this time produced a compounded annual return of 13.27 percent with a maximum drawdown of 34.53 percent. Buy and hold of the S&P 500 produced a compounded annual return of 3.45 percent with a maximum drawdown of 49.15 percent.

[IMAGE: http://www.cetcapital.com/blog/images/RUTvsS&P_POP.jpg ]

There comes a point in every money mangers life when they have to take what they have been testing and trade it with real money. That point for CET Capital was in the beginning of 2003. So far our managed account performance has been good and drawdown has been low. It is also important to remember day to day persistency is only one of the ingredients CET Capital uses in our management programs.

Please click this link to read our full disclosure. http://www.cetcapital.com/disclosure.htm




About The Author: Shop Amazon - Top Gift Ideas
Damian Campbell is President and head money manager of CET Capital, a Registered Investment Advisory firm. He oversees the testing and execution of all CET Capital investment programs. Low Minimum, Low Management Fee, Small Cap Focused, No Leverage. Please visit us on the web at http://www.cetcapital.com or call.

VOTE ON THIS ARTICLE
Needs Work >> 0 - 1 - 2 - 3 - 4 - 5 << Excellent Article

Tell our authors what you think about their article.



Top-Level Category: Articles

10 Most Recent Articles Written by Damian Campbell

The Business Cycle - Where Are We currently?
Written by: Damian Campbell | Distributed: 2006-04-11 | Word Count: 0 | Page Views: 1647
Economists use numerous regularly released surveys, statistics and reports to try and predict the future direction of the economy. But if you wish to use phases of the economy to help guide your investment strategy, perhaps the most reliable and most available parameters are the financial markets themselves.

The Non-Random Walk Theory - Persistency
Written by: Damian Campbell | Distributed: 2006-03-24 | Word Count: 0 | Page Views: 2913
Non-Random price behavior is not a myth. It exists and if you are not exploiting it you should be. Here is a closer look...

All of Author's Articles on this site:

Most Recent "" Articles

Ann Arbor, MI Offers A Lot Of Year-Around Family Fun
Written by: Jeb Maxwell | Distributed: 2010-01-20 | Word Count: 595 | Page Views: 4431 | Votes: 8 | Rating: 1.25
Ann Arbor, Michigan is the home of the University of Michigan, a leading institution of higher education. Ann Arbor is a wonderful place to visit. The University is co-mingled with the city and greatly expands the cultural places and events available in the area.

Flowers Are The Perfect Gift For Father's Day
Written by: Wesley Berry, AAF | Distributed: 2008-02-20 | Word Count: 486 | Page Views: 5649 | Votes: 11 | Rating: 2.09
Dads everywhere have Sonora Smart Dodd to thank for getting Father's Day started. In 1909, Sonora sat in a church in Spokane, Washington listening to a sermon expounding on the virtues of motherhood. But, as she sat there, she thought about how special her own father was since it was he who raised her after the death of her mother.

Finding the Adventure in Travel Again
Written by: Helen Bergstein | Distributed: 2006-05-11 | Word Count: 718 | Page Views: 4171 | Votes: 14 | Rating: 2.64
If you want to experience adventure at every level of your next trip, you need to go beyond the usual resorts and places to stay. If you're like most travelers, personal safety remains a priority, especially in today's world. A growing number of savvy travelers have found the perfect balance between adventure and comfort.

7 Tips to Hiring a Good DJ for your Party
Written by: Kamau Austin | Distributed: 2006-05-11 | Word Count: 563 | Page Views: 5070 | Votes: 11 | Rating: 1.36
If you want to have a party that everyone will be talking about for days and years later, hire a good DJ to run your music and light show. Hiring a DJ can actually be fun. Just follow these simple tips, and you are sure to have a fabulous DJ for your party.

Building your Credit to get a Mortgage
Written by: Kamau Austin | Distributed: 2006-05-11 | Word Count: 840 | Page Views: 5139 | Votes: 11 | Rating: 2.09
You are thinking about purchasing real estate. However, you are not sure if your credit is good enough to get a mortgage. There are things that you can do to build your credit so that it is worthy of any mortgage that may interest you.

1569 Unique Ways To Get A Free Lunch
Written by: Steve Robichaud | Distributed: 2006-05-07 | Word Count: 0 | Page Views: 3340 | Votes: 3 | Rating: 0.33
Everywhere you turn - T.V., Radio, magazines, or the Internet, someone is talking about government grants. What's the real story? Does the government give away real money, to ordinary people, to use for whatever they want? Let's take a closer look:

Don't Wait to Start Your Marketing Strategy
Written by: Jo Fulkerson | Distributed: 2006-05-07 | Word Count: 0 | Page Views: 3675 | Votes: 3 | Rating: 0.33
Your novel is finished, you’ve had it edited by a professional Editor, and you’ve done the rewrites. What? You haven’t had an editor edit your work yet? This is a must. There are many editors advertising in Writer’s Digest.

NEVER Reply to an eGroup Post!
Written by: BIG Mike McDaniel | Distributed: 2006-05-07 | Word Count: 0 | Page Views: 4908 | Votes: 3 | Rating: 0.33
eGroups are collections of people subscribed to a common (discussion list) address. When one member sends an eMail message to the eGroup address, it is automatically sent to everyone else on the list. As subscribers open and read their eMail, discussion threads take shape with additional posts and replies. The attraction of eGroups is the ability to join in at your convenience as opposed to the confinement of live chat rooms.

Reasons behind Shoulder Pain
Written by: Jessica Horowitz | Distributed: 2006-05-07 | Word Count: 0 | Page Views: 4711 | Votes: 3 | Rating: 0.33
Pain between the shoulder blades, or any pain for that matter, is your body's way of notifying you that something is amiss. You should never ignore it and hope it will *go away by itself*. There are a multitude of possible causes of pain between the shoulder blades. We'll discuss common ones in this article and start with the most serious conditions first:

Effective Managers Need To Coach
Written by: Wendy Hearn | Distributed: 2006-05-07 | Word Count: 0 | Page Views: 4211 | Votes: 4 | Rating: 0.75
Bearing in mind the fast pace of business today and the need to stay competitive, it's essential that managers should be effective. They need to be especially effective with their people and this requires learning to coach. For most managers, coaching has been added to their role anyway, but the majority haven't received any training in coaching skills.

Most Viewed "" Articles

TAKING RESPONSIBILITY - LIFE'S BIGGEST QUESTION
Written by: Richard Sparky Bryan | Distributed: 2006-05-07 | Word Count: 0 | Page Views: 13595 | Votes: 3 | Rating: 0.33
When did Americans stop taking responsibility for their own actions? My friend agreed that the slide began in the late 1960's with the growth of the drug culture. But he was quick to emphasize that although the sixties began the slide, the real sharp slope did not arrive until the 1990's. Along about 1993, the slide began to sharpen. It was not until early 1998 that the slope became a steep cliff.

High Thread Count Bed Sheets. How Many Threads Does A Bed Sheet Need?
Written by: Liz Beresford | Distributed: 2004-09-14 | Word Count: 0 | Page Views: 6248 | Votes: 3 | Rating: 0.33
High thread count bed sheets, often called percale, are much advertised, but what exactly does 'high thread' count mean? You know that it means quality and comfort, but do you know why? It used to be considered good to have thread count of 180-200 but thread counts of up to 1000 are advertised these days.. So what is going on? Does high thread count always mean better quality? Is there an optimum thread count, and if so what is it?

Muzzling the Motor Mouths: Silence Workplace Windbags
Written by: Bill Lampton Ph.D. | Distributed: 2005-12-01 | Word Count: 0 | Page Views: 6064 | Votes: 4 | Rating: 0.50
During my twenty-three years in management, I dealt with blabbermouths frequently, so for the last ten years I have advised clients on how to silence the workplace windbags. Here are my suggestions for muzzling the motor mouths:

Better Than Botox is there a Safer Substitute?
Written by: Kamau Austin | Distributed: 2005-09-08 | Word Count: 0 | Page Views: 5963 | Votes: 3 | Rating: 0.33
Women since time immemorial have always looked for ways to enhance and prolong their beauty. This of course becomes more difficult as they age.

12 Ways to Promote Your Business And Website for Free
Written by: Ivana Katz | Distributed: 2005-03-29 | Word Count: 0 | Page Views: 5822 | Votes: 3 | Rating: 0.33
You are very excited!! You have finally created your own website!! But the trouble is customers aren*t knocking on your website door. Why? The most probable answer is...

Transform Your Work Area into a Homey Environment
Written by: Ted Roberson | Distributed: 2006-02-24 | Word Count: 0 | Page Views: 5778 | Votes: 4 | Rating: 1.25
Nothing enables one to think and work better than a comfortable working environment. Especially if you have a sedentary job, you've got to have little knick knacks around that will enliven your spirits or which you can look at for inspiration or just to zone out in relaxation.

Flowers Are The Perfect Gift For Father's Day
Written by: Wesley Berry, AAF | Distributed: 2008-02-20 | Word Count: 486 | Page Views: 5649 | Votes: 11 | Rating: 2.09
Dads everywhere have Sonora Smart Dodd to thank for getting Father's Day started. In 1909, Sonora sat in a church in Spokane, Washington listening to a sermon expounding on the virtues of motherhood. But, as she sat there, she thought about how special her own father was since it was he who raised her after the death of her mother.

Sell Yourself, Not Your Products or Services
Written by: Bill Platt | Distributed: 2004-05-03 | Word Count: 0 | Page Views: 5225 | Votes: 2 | Rating: 0.50
Sell yourself, not your products or services. The point we need to make is that your products and services will change over time as your business adapts to the realities of the marketplace.

Building your Credit to get a Mortgage
Written by: Kamau Austin | Distributed: 2006-05-11 | Word Count: 840 | Page Views: 5139 | Votes: 11 | Rating: 2.09
You are thinking about purchasing real estate. However, you are not sure if your credit is good enough to get a mortgage. There are things that you can do to build your credit so that it is worthy of any mortgage that may interest you.

7 Tips to Hiring a Good DJ for your Party
Written by: Kamau Austin | Distributed: 2006-05-11 | Word Count: 563 | Page Views: 5070 | Votes: 11 | Rating: 1.36
If you want to have a party that everyone will be talking about for days and years later, hire a good DJ to run your music and light show. Hiring a DJ can actually be fun. Just follow these simple tips, and you are sure to have a fabulous DJ for your party.

Highest Ranked "" Articles

Finding the Adventure in Travel Again
Written by: Helen Bergstein | Distributed: 2006-05-11 | Word Count: 718 | Page Views: 4171 | Votes: 14 | Rating: 2.64
If you want to experience adventure at every level of your next trip, you need to go beyond the usual resorts and places to stay. If you're like most travelers, personal safety remains a priority, especially in today's world. A growing number of savvy travelers have found the perfect balance between adventure and comfort.

Building your Credit to get a Mortgage
Written by: Kamau Austin | Distributed: 2006-05-11 | Word Count: 840 | Page Views: 5139 | Votes: 11 | Rating: 2.09
You are thinking about purchasing real estate. However, you are not sure if your credit is good enough to get a mortgage. There are things that you can do to build your credit so that it is worthy of any mortgage that may interest you.

Flowers Are The Perfect Gift For Father's Day
Written by: Wesley Berry, AAF | Distributed: 2008-02-20 | Word Count: 486 | Page Views: 5649 | Votes: 11 | Rating: 2.09
Dads everywhere have Sonora Smart Dodd to thank for getting Father's Day started. In 1909, Sonora sat in a church in Spokane, Washington listening to a sermon expounding on the virtues of motherhood. But, as she sat there, she thought about how special her own father was since it was he who raised her after the death of her mother.

7 Tips to Hiring a Good DJ for your Party
Written by: Kamau Austin | Distributed: 2006-05-11 | Word Count: 563 | Page Views: 5070 | Votes: 11 | Rating: 1.36
If you want to have a party that everyone will be talking about for days and years later, hire a good DJ to run your music and light show. Hiring a DJ can actually be fun. Just follow these simple tips, and you are sure to have a fabulous DJ for your party.

Ann Arbor, MI Offers A Lot Of Year-Around Family Fun
Written by: Jeb Maxwell | Distributed: 2010-01-20 | Word Count: 595 | Page Views: 4431 | Votes: 8 | Rating: 1.25
Ann Arbor, Michigan is the home of the University of Michigan, a leading institution of higher education. Ann Arbor is a wonderful place to visit. The University is co-mingled with the city and greatly expands the cultural places and events available in the area.

How to Decorate Your Home on EBay
Written by: Pamela Cole Harris | Distributed: 2005-09-14 | Word Count: 0 | Page Views: 1931 | Votes: 5 | Rating: 1.20
If you are on a budget (and who isn’t?), a wonderful place for find home decorating accessories is auction sites like eBay. But before you go a’baying, here is some advice...

The "Proprietary Blend" Nutritional Supplement
Written by: Will Brink | Distributed: 2006-02-10 | Word Count: 0 | Page Views: 3223 | Votes: 5 | Rating: 0.60
In a nut shell, I went onto cover each of these common marketing terms that are used to sell supplements to unwitting consumers and explained each in detail as to what I view as their common misuse within the market place.

Brink's Unified Theory of Nutrition
Written by: Will Brink | Distributed: 2006-02-24 | Word Count: 0 | Page Views: 2104 | Votes: 5 | Rating: 0.60
Regardless of the topic, a unified theory, seeks to explain seemingly incompatible aspects of various theories. In this article I attempt to unify seemingly incompatible or opposing views regarding nutrition, namely, what is probably the longest running debate in the nutritional sciences: calories vs. macro nutrients.

7 Steps to Successful Telemarketing
Written by: Kamau Austin | Distributed: 2006-05-03 | Word Count: 0 | Page Views: 2776 | Votes: 5 | Rating: 0.40
Telemarketing is not as easy as it looks. Telemarketing involves talking on the phone to someone you do not know and trying to convince them to buy a product, use a service, or sign up for a special offer. Many times, telemarketers fail because they are not doing the job properly.

Offer More Payment Options than your Competition
Written by: Bill Platt | Distributed: 2004-05-03 | Word Count: 0 | Page Views: 3485 | Votes: 5 | Rating: 0.40
In order to be successful online, you must provide your customers many quick and easy ways to pay for your goods and services. It is not enough to ask folks to send a money order or check to your house or place of business. You must do more.











Download an eBook today
 
Directory Navigation
Locate By Category:

ALL Categories
Arts & Crafts
Arts & Entertainment
Automotive
Business - Offline
Business - Online
Career
Computers
Education
Family
Finance
Food & Drink
Health & Wellness
Home & Garden
Humor
Internet
Nature & Pets
Real Estate
Religion
Self Improvement
Shopping
Society
Sports & Recreation
Technology
Travel & Leisure
Uncategorized
World Events
Writing & Speaking

Change Number of Results:
50 - 100 - 200 - 500
Article Reprint Rights
Creative Commons License

This work is
licensed under a
Creative Commons
License


You are not required to show the creative commons license notice when you reprint this work.
Article Statistics
Word Count: 0

Total Views: 1382

Article Rating: Not Yet
Votes Cast: 0

More Articles By Author:



Last Distribution Date:
2006-03-31 06:17:30

Internal ID: #69





All Articles are Copyright © 2001-2022 of the Defined Authors.

All other material and images on this site are:
Copyright © 2001-2022, ThePhantomWriters.com