Tag Archive for: stock market

Image Info

Hypernomics Fund

“Price is what you pay, value is what you get” – Warren Buffett

In the last post, as we studied the Aerion AS2, we found out how
Hypernomics could help avoid losses.

Someone asked me how Hypernomics could be used to make money. A stock fund is one good example.

Value analysis is a critical component of this new discipline. As Mr. Buffett is quick to point out, we need to distinguish a product’s price versus its value. In today’s red-hot real estate market, an underpriced house would be sniffed out by anxious buyers quicker than a drunken gazelle tripping into a bar full of lions. Comparable sales of several homes sold down the street take care of that.

Stocks are more complex. With hundreds of financial metrics for each company and thousands of competitors, it is easy to get lost in all the data. Hypernomics sorts through that information to find and buy undervalued stocks.

Below are metrics comparing how we’ve done since we began trading with our algorithms nearly a year and a half ago, all growth-indexed from the same starting point beginning 2/20/2020.

This fund is not open to the public.

#hypernomics #stock #stockmarket #innovation #value #valueanalysis

Image Info

Many Features Can Determine Value

Last time we looked at how 3 features revealed value in stocks.  But, stockholders do not limit themselves to some fixed number of features in their collection buying decisions.

Here, the market considers at least 4 features simultaneously.  It entertains 1) book value per share on one horizontal axis, 2) market capitalization on the other, and then, if it sets 3) EPS to 20 and 4) stock volume to 10 million, it produces the surface at left.  If it resets the stock volume to 1 million, it shifts that surface upward.  [This analysis excludes Amazon.]
Stocks support higher prices with higher earnings and book values per share.  But prices climb as market capitalization goes up and volume falls.  Accounting for opposing forces is crucial to market analysis.

This S&P 500 study only examines stock parameters.  As the world reacts to COVID-19, we see the impact of global market factors.  Stocks fall with uncertainty.

In markets such as the S&P 500, with a sufficient number of entrants, several measures of demand come into view.  The slopes of 2 important demand curves start to converge with enough market participants.  See the next post for a discussion of their differences and similarities.

#stockmarket #equities #markets #trading #stocks