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          Engineering Professor (EngProf6)

                   Hybrid Timing Engine of Stocks and Indices

 

Timing is a Key to Successful Investing:

 

    Introduction:

How many times have you said to yourself and to others: ‘I should have bought last week’ or ‘ Why didn’t I sell last month?’  We have all done it and we will all continue to do it. It is part of life – it is human nature. 

 

Your success is directly linked to your timing skills. Improve your timing, and you will be more successful. Naturally, if your timing skills start loosing some of their luster, you will notice it on your bottom line. So most of us will agree that timing is one of the primary ingredients for success.

 

    Consider This Example:

Stock and markets cycle up and down. In bull markets, the ups can be substantially bigger than the downs. And the reverse, of course, also holds. Imagine if one had the timing skills to have made the following decisions for Apple Computers  (AAPL):

 

     Date               Action         Price               Gain

Feb 13’06             Buy          $64.71           + $7.04

Feb 23’06             Sell          $71.75          + $13.04

March 28’06         Buy          $58.71           + $12.53

April 6’06              Sell          $71.24             + $6.43

April 17’06            Buy          $64.81        to be determined

May 9’06               ---            $71.03

(present)

                                           Total Profit = $39.04 (in 4 moves)

 

The above is some timing data for AAPL for the last 3 months or so. Note, I’ve only listed closing prices and dates. What I’ve done is I’ve selected, after the fact, interesting buy and sell points that one would, with the ‘perfect’ model, hope to capture.

 

Timing is critical. You can see that for AAPL, if you had gone long and short on the specified dates (the initial transaction was on Feb. 13’06) you would have made a total profit of $39.04 by the beginning of May. So the ‘perfect’ timing engine would have racked up some sizeable gains. I have created this collection of hypothetical moves to illustrate the power of timing. You can do the same for any stock or index and, as long as there is some volatility, there will be some impressive gains.

 

No one will match the above performance. So, what performance can one achieve? That depends on the timing algorithms one uses. I will make an effort to discuss this for each stock in the coming weeks. Stay Tuned.

 

    What Did The Hybrid Timing Model Predict:

              STAY   TUNED   (It is coming.)