100 Level

Top Ten Investment Books: A Revised List

  Education is a crucial step toward financial success. Where does one begin when trying to come up with the top ten investment books?  Here is my revised list, but be forewarned, this is not a list of books that focus on either fundamental analysis of stocks, nor is it a list of books explaining technical analysis.  In fact, the list below is the antithesis of stock picking.  My … [Read More...]

Sortino Ratio: What Is It?

The following discussion of the Sortino Ratio may get a little "heavy" for some readers.  However, this information is very important for the serious investor, so stick with me and follow along.  Users of the TLH spreadsheet are familiar with the Sortino Ratio as one of the worksheets is built specifically to calculate this number.  The equation is quite simple but very … [Read More...]

300 Level

QPP Analysis of ITA Risk Reduction Portfolio

Prices for all seven equity ETFs used in the ITARR model portfolio are not above their respective 195-Day Exponential Moving Averages (EMAs).  Nevertheless, it is useful to see what a Quantext Portfolio Planner (QPP) analysis looks like if this were the case.  In the first analysis, I use a projected return of 5.3%, which is in line with one of my recent blogs.  Then I show readers … [Read More...]

Gauss Portfolio Review: 12 November 2012

Readers interested in a detailed analysis of the Gauss Portfolio will find it at this link.  The following is an update and a discussion of how I am using the ITA Risk Reduction model with Gauss.  The first thing I did this morning was to check the price of each ETF.  So as to maintain the percentage performance of the ITA Index benchmark, I hold a few shares of each asset class.  When I ran the … [Read More...]

200 Level

Asset Allocation Example

In the table below, viewers see the asset classes discussed in a prior blog entry.  We are looking at fifteen asset classes, including Cash. In the second table the sample asset allocation is broken down into percentages and we cut out the Core holding, moving the number of asset classes to twelve. [Table=6] … [Read More...]

“Holy Grail” Portfolio: A Revised Look

QPP Analysis of "Holy Grail" Portfolio While I hope to have the focus of this blog post show up on Seeking Alpha, here is an advanced look at what I've been working on for Platinum members. This is quite a strong portfolio based on QPP analysis. Platinum membership is available for $5.00 per month.  Help provide capital for individuals starting their own business in developing … [Read More...]

400 Level

ITA Ratio*: What Is It Telling Us?

The three classical portfolio performance measuring instruments, all rooted in the Capital Asset Pricing Model (CAPM) are: the Sharpe ratio, the Treynor ratio, and the Jensen's alpha.  The most popular of these performance instruments is the Sharpe ratio so let's take a closer look at it, particularly since it is similar to the Sortino ratio. Sharpe ratio (SR) = (P - R)/SD … [Read More...]

Sydney Morning Herald Article

Photograph: Mt. Lassen in California The following article ("It's still business as usual for Wall Street") just appeared in the Sydney Morning Herald on-line paper.  The three recent crashes discussed include the 1987 drop when the DJI gave away 22% with a 522 point drop.  Then we had the tech blowup in early 2000 through 2002.  Even worse is the current Global … [Read More...]