The correlation improves over time, but not to a meaningful degree. Over five years, the top five performing stocks had an average ranking of 305 for revenue. Over 10 years the average drops to 251, which is still above the statistical median point for the entire Fortune 500 list. That's hardly a ringing endorsement for revenue as a predictor of stock market performance. Nevertheless, a comment in a sidebar column suggests Fortune may soon be offering investors the opportunity to trade its list of stocks that it claims has outperformed the S&P 500 Index by a considerable margin over the past 20+ years: "Coming soon: products to help investors profit from that advantage." What does that mean? Probably one or more exchange-traded funds (ETFs) that track the Fortune 500, and possibly subsets of that list based on profitability, etc. I think that is a great idea from a liquidity perspective. So much money is invested in products tied to the S&P 500 that an alternative universe of large-cap stocks should add some much needed diversification to what has become a highly concentrated market. However, that still doesn't solve the problem of determining which Fortune metric(s) are best for anticipating stock market performance. And perhaps that's the major takeaway from all that data. We can easily measure what has already happened, but cannot predict what is yet to come. The good news is, I know someone who has consistently outperformed the stock market in good times and bad. Not by predicting which direction it may turn next, but by using a system that works no matter which way it goes. I'm referring to Jim Fink, chief investment strategist of Velocity Trader. Jim has devised a trading system that finds the stock market champs - in bull or bear markets, in economic expansions or recessions. Jim achieves consistent trading success via his proprietary trading system, called the Velocity Profit Multiplier (VPM). The product of years of painstaking research, the VPM can predict when a stock is about to rise, or fall, with uncanny precision. Jim's VPM has pinpointed a trade that could generate up to 163% in profits. But you'd better act now; the window is rapidly closing. Click here for all the details. |
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