Can long term investments also be done using systems ? Yes ! I’ll share the process that we use to build long term systems (100% systematic in nature) 1) Trend should be up We can objectively decide the trend using a moving averages (1)
2) Should be near support for better risk:reward One can use MA for dynamic S&R Market reverts back to moving averages and they provide dynamic support. See the stock in the image , for past decade the MA is providing good support (2)
Important aspect in wealth creation is CAGR How can we achieve high CAGR ? **Check the attached image** Credit to @InvesysCapital for his presentation in Decma. Learnt the concept from him. (3)
For eg: Reliance CMP -600 in 2009 & CMP -600 in 2017 So that’s 8 years of 0 return. So we use a momentum filter to scan for stock which are in good momentum. “Stocks are good only when they are going up” Credit :@markminervini for sharing why not to buy familiar names (4)
Finally, we analyse the stock using our fundamental systems which are inspired by @drvijaymalik and his book peaceful investing Check our sample report on Metropolis by our inhouse investment team https://drive.google.com/file/... (5)
Finally we have a stock- -Which is in uptrend -Near a support for better risk to reward -Is in momentum so that we can achieve high CAGR -And fits our fundamental criteria Can you figure out such stocks in current condn’s ? (end) #quant #investing #systems #markets #finance
