How to beat the market with our tools

2015-02-04 12:25:53

Motivation:

Need for systematic approach to investing but not based purely on computation
- Belief that no strategy based purely on computation can be better than broad market in a long run (human intelligence not computable)
Finding that trends are the best way to organize information coming from the markets
- Concentrating limited research resources on current trends
- Trends and value investing – in case of having proper intrinsic value approximation below current market price it is good to avoid fighting the market – trends can help with the timing.

Conclusions:

CARTs - Cumulative Abnormal Return Trends
CART Strategy
- Strategy or way to organize information from the markets
- Persistence / anti persistence - not decided - fixed strategies are exploitable so they can’t work forever
- Currently in most cases we find favorable odds for trend continuation so we use CART Strategy as kind of momentum strategy