Market Views and Research


Six S&P500 stocks that outperformed during the COVID-19 sell-off

Posted on 2nd Jul 2020
#market views #stocks #diversification

One of the more interesting things I've observed in the markets over recent years is that while there has undoubtedly been inter-asset class integration (meaning during periods of turmoil correlations tend to 1 between stocks, bonds, real estate, commodities etcetera), we have actually observed intra-asset class divergence in many places. Or to put it in a more quantitative way: the correlation of for instance Netflix and Amazon with the S&P500 was lower than that of emerging market stocks and real estate to the S&P500 during the worst of the 2020 sell-off.... Read More

About Win Rates and Signals

Posted on 28th Jun 2020
#signals #investment process

I wanted to share a quick few thoughts with you about using our signals in your investment process, and what to expect in terms of win rates. Are we at LongShortSignal actually able to predict the market, if so why is no one else doing it and exactly how game-changing is our output? Those are a few of the things I will go into in this very short piece. For starters, it is my firm belief that markets are inherently unpredictable to an extent and there's no magic potion that will allow anyone to predict how assets will behave today, tomorrow or a week from now. ... Read More

6 Tips for Achieving Portfolio Diversification in 2020

Posted on 27th Jun 2020
#investment process #diversification #market views

So far, 2020 has been nothing if not a wild ride for financial markets. The S&P500 started the year on a slow upwards grind and was up as much as 5% by February (which would have been a respectable result for the entire year if it had only stayed there). It then started dumping to the bottom from 19th February onwards, eventually going as far down as -30%. We all know what happened next as central banks stepped in to save the day, one after the other. Today, it would appear to me that markets remain fragile as risk levels remain elevated and concerns about things like global economic growth and the impact of COVID-19 but also geopolitics, trade friction, upcoming US elections etc. continue to weigh on sentiment.... Read More

Moving into the Crypto Space

Posted on 26th Jun 2020
#Cryptocurrencies #models

We are happy to announce that as of today we have expanded our premium model offering to include no fewer than 7 cryptocurrencies. Included in our signal coverage from today on are: Cardano, Ripple, Ethereum, Litecoin, Binance Coin, Bitcoin Cash and of course Bitcoin itself. And while generally, we will reserve our premium signals for premium users, on this special occasion we can let you know that all of them except for Bitcoin have incepted with a LONG signal.... Read More

Deliberations About the Market

Posted on 19th Jun 2020
#market views

As I sit out here in Asia watching my Bloomberg screens on a late Friday night / early Saturday morning I thought to share a few quick thoughts on the markets with you all. On my screen I see predictable headlines passing by about Ray Dalio warning that we may be looking at a "zero decade" for US stocks as profit margins reverse, JPMorgan discussing the highest ever levels in cross-asset correlation and another warning to add to the pile of endless screaming about how Robinhood traders are going to be the sole cause of the biggest bubble ever. Nothing new under the sun.... Read More

How to Trade our Signals?

Posted on 16th Jun 2020
#LSS #signals's free and premium subscriptions include assets from a variety of classes, such as stocks, bonds, commodities, currencies (Forex) and even cryptocurrencies. So what trading platform should I use and what ticker should I be trading? This will mainly depend on where you live. For those living in the United States, you will most likely have access to a normal trading account like Fidelity, TDAmeritrade, Charles Schwab and even the more recently popular Robinhood. All to varying degrees offer $0 trading commissions which greatly reduces our transaction costs.... Read More

Shortest Bear Market in History

Posted on 11th Jun 2020
#market views

Last Monday, the S&P 500 returned positive year-to-date which is quite remarkable following the Covid-19 pandemic and resultant liquidity induced 34% correction witnessed mid-March. The Federal Reserve, and indeed other major central banks, unleashed unprecedented monetary stimulus to deal with this exodus of liquidity from risk assets.... Read More

Model Quick Take: US Treasury

Posted on 9th Jun 2020

One of the best performing - if perhaps least exciting - models this year has been our US Treasury model which maintained its recommendation to be long US Treasury since December 2019. In fact, except for a quick trend break in December 2019 that lasted all of 17 days, the signal from our US Treasury model has pointed in this direction since November 2018, when the US 10 year yield peaked out at approximately 3.25%. What gives?... Read More

Our Quantitative Investing Process: Focusing on Structural Regime Shifts

Posted on 7th Jun 2020
#investment process

Traditional portfolio management on the buy-side often still centres around Modern Portfolio Theory, a half a century old (!) model which describes the idea that the expected return of a portfolio can be maximized for a given level of market risk and one combination of portfolio exposures provides the "optimal" portfolio. This theory treats historical returns as a continuum: 2008 (-38% return on stocks) and 2019 (+30% return on stocks) are opposite parts of the same return distribution. Instead, our investment process utilizes quantitative regime shifting models which have the underlying understanding that markets behave differently during good and bad times, and with a degree of statistical certainty, we can estimate what regime we are in today, aiding your investment decisions.... Read More

Monthly Signals Recap - May

Posted on 31st May 2020
#monthly signals recap officially launched in early 2020. Our signals are updated daily, but on a regular basis, we also want to share with you our views on how the models have been performing and the signals they have been giving.... Read More