1 June 2017: Wisdom of the crowd

The models created by These Dutch Guys make use of knowledge about the state of the stock market. Or, to be more precise, about the sentiment of stock market investors. And that knowledge is used to make trades that do not follow that sentiment.
An Amazon engineer, Mike Roberts, is taking a different approach: he created StockStream, a crowdsourced approach to trading stocks. Visitors of StockStream can decide which trades should be made. And these trades are indeed executed using a real account that is using real money. Roberts makes use of a design that makes StockStream look like a Nintendo game of the eighties.
These Dutch Guys think that StockStream is definitely able to make some profit, but its return in the long run will not differ from the average annual return of major indices: somewhere around +5%. To be truly profitable in stock market trading, one should ignore (or better: contradict) the wisdom of the crowd.

U.S. stocks closed lower on Wednesday, but it could have been worse: they were off their worst levels of the session. Investor sentiment was influenced by a slump in bank shares and a mixed reading of economic reports. The S&P 500 lost 0.05%. The Dow doubled that loss: -0.10%. The NASDAQ sat somewhere in-between:-0.08%. Volatility was virtually unchanged: the VIX closed 0.29% higher. UVXY ETFs closed almost 2% higher. XIV ETNs lost almost 1%.
Danny Daredevil rebounded from the losses of the previous days and closed at 397%. Adventurous Anny is still holding cash and her RSS remained at just below 40%. Solid Suzy and Lazy Larry had to take a small step back. Their RSS is now at 19%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

397.36%

23.38%

6.10%

210%

Adventurous Anny Cash 6 March 2017

39.23%

39.23%

14.33%

301%

Solid Suzy XIV 6 March 2017

18.94%

18.94%

8.60%

107%

Lazy Larry
XIV 6 March 2017

18.94%

18.94%

8.60%

107%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

René has a soft spot for word jokes. During a walk through the city center of his hometown, early yesterday morning, he encountered a beauty of a malapropism. Amid expressions of tenuous street art in various shades of gray, the following text stood out in both color and content: “Ik wil niet eenzaam weg kwijlen.”
If spelled correctly, this would be: “Ik wil niet eenzaam wegkwijnen.” In English: “I do not want to languish in solitude.”
The text on the wall literally translates as: “I do not want to salivate away in solitude.”