Finance

Money & Finance: Stock Reports > Observations, Comments and Questions

Money & Finance: Stock Reports > Observations, Comments and Questions

Postby Papa » Mon May 18, 2009 10:01 pm
I submitted the following (with minor changes) this morning to one of the other WA feedback areas before I knew of the COMMUNITY area and its Archive search capability. Please excuse the redundancy, but I think it has value for the Money & Finance query users of Wolfram Alpha....

I've been using WA to build a stock portfolio with good expected returns and low volatility. Please verify that the Return is a stocks Alpha and Volatility is the Beta. If that is the case and for the better understanding of everyone, please add those descriptions to the vertical and horizontal axis chart descriptions and enclose them in parentheses.

Wolfram Alpha seems to Time Out after working on a request for 40 to 45 seconds. Repeated many times last night. Is that an arbitrary length of time that you chose? Can you increase it or somehow timeshare (loop/bypass and come back...whatever the process might be called) with other lengthy requests to complete job results that are, in fact, valid?

What is the maximum number of stock ticker inputs? I realize that for now you probably need to limit the number. Something reasonable like 25 or 30 at a time should be doable for the present.

Can you highlight the unrecognizable symbols in a request. Rather iffy the way it works now. Must eliminate and add tickers one at a time. Painful task.

If you run the test inputs I used (IBM JNJ ABX MO CL KO SO GIS STRA), you will get a respectable optimal 8.50% return (given time, I can get it higher). I input several dozen stock symbols one at a time. I will personally verify with another source before any actual investment. You might ask your company legal folks if you need to add caveats at the bottom of the Money & Finance results page.

Some stock symbols gave a zero result for weight, shares and cost. I eliminated them and added others. Some symbols are not recognized by WA and I eliminated them from my input.

WA does not recognize Exchange Traded Funds (ETF's), at least the ones I tried. Please add them. Haven't tried mutual funds yet?

There should be at least 5,000 to 8,000 stocks, mutual funds, ADR's and ETF's that should be recognized by Wolfram Alpha for U.S. investors.

Please give us more information on assumptions, data, etc. I did see your Source Information and it looks like you need more data sources.

Thanks for a wonderful tool for us all. I always wondered how many days old I was. *sigh*

Bob Durrett, Havertown, PA
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Re: Money & Finance: Stock Reports > Observations, Comments and Questions

Postby beavis » Wed May 20, 2009 3:01 am
Can you provide more information on the queries you are using and how you are building this portfolio you describe?
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Re: Money & Finance: Stock Reports > Observations, Comments and Questions

Postby Brightside » Wed May 20, 2009 8:57 am
I agree you need more data sources. Exchanges like the Johannesburg Stock Exchange are not covered at all. In addition, it seems impossible to perform currency weighting, which makes it difficult to compare foreign held stocks within a portfolio.

Many thanks for an excellent launch product.

Raymond Ellis, Cape Town
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Re: Money & Finance: Stock Reports > Observations, Comments and Questions

Postby coghoo » Thu May 28, 2009 6:52 pm
I agree WA needs to add ETFs...my portfolios are constructed entirely of ETFs.
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby financeinvestment » Thu Apr 15, 2010 4:45 am
i lso would like to know that on what basis you made that observation
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby bobucb » Mon Apr 19, 2010 3:53 pm
sorry, new to wa, but can someone (perhaps papa) tell me how one can use wa to select stocks for a portfolio?
thanks.
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Looking For Some Sincere Advice . Please Help

Postby AnaecyMayboab » Wed Jun 30, 2010 11:09 pm
Hey everyone, I have really wanted to get into stock investing for a while now. From what I hear, investing in penny stocks might be the best way to go. I just really dont know much about researching stocks. Does anyone know a good place that can give me stock tips?
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby jasonc » Tue Jul 06, 2010 4:04 am
The first post in the thread is mostly asking about the mean variance optimal portfolio analysis that you get if you enter multiple stock symbols into Wolfram|Alpha. First to answer the most direct question, no the expected return listed there for the suggested portfolio weights is not Alpha and the standard deviation is not Beta.

You can get the Beta and Alpha of an individual stock - along with the R squared of its regression - all against a standard index, by entering a single symbol e.g. IBM. Beta is the slope of the best fit regression line drawn through the scatterplot of the two returns, stock on the Y axis and index on the X axis. Alpha is the Y intercept of that best-fit line, converted to units of percent per year. Note that this is an historical calculation based on past performance and not a prediction of any kind. You can control the time period used to make the calculation.

What the mean variance portfolio analysis is doing is something a bit more involved. It is a standard approach in modern portfolio theory that is being applied. With only a few items and especially when those items are individual stocks (rather than diversified whole asset classes), it should be used with caution.

The idea is to find a weighting of the allowed components that is on or near the "efficient frontier" of expected reward per unit of risk accepted, when risk is estimated by an expected standard deviation in value of the model portfolio. The expected return has to be estimated, and a beta model with allowance of some reversion of betas to the mean is used for this. The model also incorporates the information from the correlation matrix shown earlier. Less correlated assets can reduce the standard deviation of the portfolio compared to the weighted average of the risks of its individual parts.

In principle there are many points along the "efficient frontier", accepting a higher risk for a possibly higher reward. But assets that raise expected risk by large amounts without offering a meaningfully higher return than alternatives like bonds or a broad stock index, will typically receive small weights if any. The analysis will tend to suggest a risk level at or under that of a balanced portfolio of broad stock index and bonds. Note that this may result in a high cash and bond weighting, combined, if riskier assets are added, to compensate for their higher risk. The procedure used will also tend to recommend evenly divided investments if the individual components are suitable, but is more willing to weight heavily broad asset class items than individual stocks.

Modern portfolio theory suggests that portfolios of individual stocks need to have a significant number of them to achieve proper diversification - on the order of 20, with additional stocks offering continuing diversification benefits up to several times that figure, but diminishing ones. Positions in a handful of stocks, on the other hand, tend to experience much higher volatility than either indices or more diversified stock portfolios, without any increase in their typical expected returns. Obviously if you can pick the single best stock this would not hold, but the theory does not expect that to the possible for most investors or most of the time.

Naturally this is all just one approach to portfolio weighting decisions, and Wolfram Research is not specifically recommending or endorsing this approach. It is simply a standard sort of calculation in "mutual fund math" that Wolfram|Alpha knows how to do, that users may find useful.

I hope this helps.
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby pakiboyg » Tue Jul 06, 2010 5:01 am
I completely agree with you that the stock exchange is decreasing there market . The inverter cannot invest the money.
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby rogerjolly » Fri Jan 07, 2011 5:56 am
It is a standard approach in modern portfolio theory that is being applied. With only a few items and especially when those items are individual stocks. It should be used with caution. Less correlated assets can reduce the standard deviation of the portfolio compared to the weighted average of the risks of its individual parts.
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby jasko5 » Mon May 30, 2011 6:32 pm
Investing in penny stocks might not be the best way to go, it could be very dangerous.
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Re: Looking For Some Sincere Advice . Please Help

Postby chicagobrownblue » Sun Jul 10, 2011 5:28 pm
AnaecyMayboab wrote:From what I hear, investing in penny stocks might be the best way to go.


Where did you here this? Link to a source please.

AnaecyMayboab wrote:Does anyone know a good place that can give me stock tips?


Jim Cramer's "Getting Back to Even" is a good place to go for investment advice. His show is an entertaining way to learn about individual stocks. He is particularly good with long term dividend paying stocks. His other tips on turnaround candidates are just like any broker tips, you make on some, lose on others and overall lose. I'd recommend skipping the trading on tips idea and focusing on investing. Once you are really good at investing, a stock that you followed my present a trading opportunity that you like.

Figure out ahead of time how much you want to lose in any investment. Once you've bought a stock, it is usually too late to pick a stop loss price and the losses just continue to mount. Get out when you lose that much.

The market has doubled off its 2009 low, so you are getting in a a bad level. Not sure we will go back down to the 2009 low, but be careful here.
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Re: Money & Finance: Stock Reports > Observations, Comments and

Postby brylle28 » Sat Nov 12, 2011 9:42 am
Is it safer to sleep on your money in the Stock Market To Fine Art Investment in this way rather than subject it to ... A couple of comparatively positive pieces of news and quickly.
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