Comments on: The Seasonality Problem (Part Eight) http://financemanila.net/2007/11/the-seasonality-problem-part-eight/ Our world in and out of the workaday world Fri, 19 Mar 2010 08:24:59 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: servalhttp://financemanila.net/2007/11/the-seasonality-problem-part-eight/comment-page-1/#comment-6219 serval Sun, 02 Dec 2007 07:14:45 +0000 http://financemanila.net/2007/11/30/the-seasonality-problem-part-eight/#comment-6219 Boss MTM, October would indeed be a good candidate if one is positioning long term on FA stocks or if the stocks and indices are showing signs of bottoming out or are building bases. Buying just because it's October maybe risky, or I wonder if it's worth the risk?The sorting I made is for 1 day gains only, so holding for 6 months could still give a better return than 3 months. I'm just guessing, only a mathematical computation could clearly show us that.That's a difficult one, buying in a crash? Like the old saying of "buying when there's blood in the streets?" If one has deep pockets maybe he can spare a portion. The problem is what if the prices keep falling? For FA guys, that may not be an issue and for those with deep pockets. Like what Larry Williams said in the video, seasonal effects can give us a head's up on possible opportunities, if the effect materializes or not as scheduled, I guess that's a another matter. Maybe if we combine it with other tools, the odds would be greater that investing/trading on such seasons is worthwhile.And the "why" part, FA guys particular to seasonal effects might have some insights. Boss MTM, October would indeed be a good candidate if one is positioning long term on FA stocks or if the stocks and indices are showing signs of bottoming out or are building bases. Buying just because it’s October maybe risky, or I wonder if it’s worth the risk?

The sorting I made is for 1 day gains only, so holding for 6 months could still give a better return than 3 months. I’m just guessing, only a mathematical computation could clearly show us that.

That’s a difficult one, buying in a crash? Like the old saying of “buying when there’s blood in the streets?” If one has deep pockets maybe he can spare a portion. The problem is what if the prices keep falling? For FA guys, that may not be an issue and for those with deep pockets. Like what Larry Williams said in the video, seasonal effects can give us a head’s up on possible opportunities, if the effect materializes or not as scheduled, I guess that’s a another matter. Maybe if we combine it with other tools, the odds would be greater that investing/trading on such seasons is worthwhile.

And the “why” part, FA guys particular to seasonal effects might have some insights.

]]> By: MTMhttp://financemanila.net/2007/11/the-seasonality-problem-part-eight/comment-page-1/#comment-6218 MTM Sun, 02 Dec 2007 06:23:16 +0000 http://financemanila.net/2007/11/30/the-seasonality-problem-part-eight/#comment-6218 Thanks for your feedback. Boss serval, seems your own observations shed further light on the Seasonality Problem. If October is usually (or should i say unusually) the month the index experiences its losses, then it might help investors in buying at good prices?Your observation is also that December registers the best gains, so if I amended my table and checked for 3-month returns instead, would buying in October and selling in December appear the best times I wonder?This kind of inquiry begs a more general question (which could cover the results of both our surveys): is buying the index during times of big losses (like a crash) a good trading strategy? And over what holding period?The last frontier is the "Why?" What happens in October anyway that leads our independent studies to point to the same thing? Thanks for your feedback. Boss serval, seems your own observations shed further light on the Seasonality Problem. If October is usually (or should i say unusually) the month the index experiences its losses, then it might help investors in buying at good prices?

Your observation is also that December registers the best gains, so if I amended my table and checked for 3-month returns instead, would buying in October and selling in December appear the best times I wonder?

This kind of inquiry begs a more general question (which could cover the results of both our surveys): is buying the index during times of big losses (like a crash) a good trading strategy? And over what holding period?

The last frontier is the “Why?” What happens in October anyway that leads our independent studies to point to the same thing?

]]> By: servalhttp://financemanila.net/2007/11/the-seasonality-problem-part-eight/comment-page-1/#comment-6217 serval Sun, 02 Dec 2007 06:13:41 +0000 http://financemanila.net/2007/11/30/the-seasonality-problem-part-eight/#comment-6217 In your table, if I understood it right, the exercise shows that if you bought the hypothetical psei stock in October and sell it after 6 months, you get that best returns as shown. Ever since I watched a video of Larry Williams regarding his study on seasonality on trading days of the month, I always wanted to do some study on our local market. After reading your blog, I decided to finally do some initial tests. It was nothing fancy, just simple tabulation, sorting and summation. I took the psei data from 1994 to present and sorted those with the psei closing higher, that is, close-open = value. I then sorted again based on that positive gains/losses for the day.Here are the results of this unscientific approach for the psei: best gains per day = thursday followed by friday worst losses per day = tuesday followed by monday best gains based on week = dec. 13-20 worst losses based on week = oct. 3-10What's interesting I noticed is that in your table, October is the best time to buy which corresponds to the month where I found that the psei experiences its worst losses. In your table, if I understood it right, the exercise shows that if you bought the hypothetical psei stock in October and sell it after 6 months, you get that best returns as shown. Ever since I watched a video of Larry Williams regarding his study on seasonality on trading days of the month, I always wanted to do some study on our local market. After reading your blog, I decided to finally do some initial tests. It was nothing fancy, just simple tabulation, sorting and summation. I took the psei data from 1994 to present and sorted those with the psei closing higher, that is, close-open = value. I then sorted again based on that positive gains/losses for the day.

Here are the results of this unscientific approach for the psei:
best gains per day = thursday followed by friday
worst losses per day = tuesday followed by monday
best gains based on week = dec. 13-20
worst losses based on week = oct. 3-10

What’s interesting I noticed is that in your table, October is the best time to buy which corresponds to the month where I found that the psei experiences its worst losses.

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