29 June 2017: Stock picking

At These Dutch Guys, we do not practice stock picking. The recently presented results from research by a professor from Arizona State University makes clear why it is not such a good idea to pick stocks: “When stated in terms of lifetime dollar wealth creation, the entire gain in the U.S. stock market since 1926 is attributable to the best-performing four percent of listed stocks. [..] The results also help to explain why active strategies, which tend to be poorly diversified, most often underperform.” (Highlighting ours.) This explains why some people get very rich by having the luck of picking the right stock, but it also clarifies that the large majority of stock pickers makes only small gains from their stock investments or that they even lose money. If you are interested in investing in stocks, it is a better idea to buy index funds, so you can be sure that that small group of successful stocks is part of your portfolio. Or you take a completely different approach to investing by using the universal patterns of greed and fear in the stock markets as your guide. Just like we do…

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A rally by financial and technology stocks on Wednesday helped lift the major US stock indices. The S&P 500 posted its largest one-day gain in two months. The NASDAQ recorded its best day in eight months. The S&P 500 climbed 0.88%, the Dow gained 0.68% and the NASDAQ rose 1.43%. Volatility returned to the level it had before Tuesday’s sudden rise: the VIX closed just above 10 points (- 9%). UVXY ETFs lost almost all of the gains they made the day before: -5.9%. XIV ETNs gained almost 3%.
Danny Daredevil was the main victim: his RSS dropped to 319%. Adventurous Anny was unchanged: her RSS remained at 40%. Solid Suzy and Lazy Larry climbed back to an RSS of almost 30%.
None of our models gave a trading signal at the end of yesterday’s session, but it is almost inevitable that Danny and Anny will give a trading signal at the end of today’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

318.92%

3.92%

-10.63%

161%

Adventurous Anny Cash 6 March 2017

40.21%

40.21%

15.13%

192%

Solid Suzy XIV 6 March 2017

29.68%

29.68%

18.40%

128%

Lazy Larry
XIV 6 March 2017

29.68%

29.68%

18.40%

128%

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

 

 

One year ago to this day, These Dutch Guys reported that the month of June broke a record as the wettest ever June in the southern provinces. Today, with only two days to go before the end of the month, it is safe to say that June will again break a record: that of the warmest June recorded in the Netherlands. According to Dutch online weather service Weeronline, the previous record dates from 1976, with an average temperature of 18.0 degrees centigrade. The average temperature this month was 18.1 degrees centigrade. On average, the temperature in the month of June is 15.6 degrees in the Netherlands. It makes us wonder, which surprises June will have in store for us for the future.

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