{"id":101,"date":"2019-12-12T23:34:53","date_gmt":"2019-12-12T23:34:53","guid":{"rendered":"https:\/\/straussresearch.com\/?page_id=101"},"modified":"2020-01-20T19:01:48","modified_gmt":"2020-01-20T19:01:48","slug":"an-ongoing-research-process","status":"publish","type":"page","link":"https:\/\/straussresearch.com\/index.php\/an-ongoing-research-process\/","title":{"rendered":"An Ongoing Research Process instead of Predictions"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-page\" data-elementor-id=\"101\" class=\"elementor elementor-101\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-820c0cd elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"820c0cd\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-eccd666\" data-id=\"eccd666\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fe15fb2 elementor-widget elementor-widget-text-editor\" data-id=\"fe15fb2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><em><strong>Note:\u00a0 the three blog pages in this section are to answer the question, &#8220;What is unique and valuable about your approach?&#8221;<\/strong><\/em><\/p><p><strong><br \/>Studying the economy, making an earnings estimate for the S&amp;P 500, and multiplying it by a P\/E ratio is a logical way of forecasting a target price for the market.\u00a0 I spent years following all the latest economic data and reading reports from Wall Street economists.\u00a0 <\/strong><\/p><p><strong>However, these years of investment experience have led to the realization that <\/strong><strong><span style=\"text-decoration: underline;\">making good investment decisions requires not only studying the economy and earnings, but also studying the behavior of the market itself<\/span>.\u00a0 This enables us to see how the balance between the buyers and sellers is playing out as developments unfold.<\/strong><\/p><p><strong>In his book <span style=\"text-decoration: underline;\">How to Make Money in Stocks<\/span>, William O\u2019Neil, who created one of the best track records in stock market history, wrote \u201c<span style=\"text-decoration: underline;\">The key to staying on top of the stock market is not predicting<\/span> or knowing what the market is going to do.\u00a0 It\u2019s knowing and understanding what the market has actually done in the past several weeks and what it is currently doing now.\u201d<\/strong><\/p><p><strong>In other words, price and volume activity often provides valuable information, and sometimes acts as a leading indicator.\u00a0 Therefore, diagnosing market behavior can play an important role in making good investment decisions.<\/strong><\/p><p><strong>My research shows that investment strategy is best done with <span style=\"text-decoration: underline;\">an ongoing, comprehensive proc<\/span><span style=\"text-decoration: underline;\">ess.\u00a0 By following a weekly routine, we can stay on top of all important economic and market developments.<\/span><\/strong><\/p><p><strong><span style=\"text-decoration: underline;\">This routine should include<\/span>:<\/strong><\/p><ul><li><strong>monitoring global macro events<\/strong><\/li><li><strong>reviewing fundamental data on stocks<\/strong><\/li><li><strong>reviewing market activity from a technical analysis perspective<\/strong><\/li><\/ul><p><strong><span style=\"text-decoration: underline;\">The technical component does not mean just looking at a few charts.\u00a0 It means having the software and procedures in place to perform a comprehensive weekly review<\/span>, covering the overall market, sectors, and industry groups, along with using the computer to scan data on thousands of individual stocks.\u00a0 <\/strong><\/p><p><strong>Using high quality charting software, I have done a lot of work building pattern recognition software, and have designed <span style=\"text-decoration: underline;\">a complex technical overlay to monitor market activity<\/span>.\u00a0 In addition I have developed a data management process to align technical data with fundamental data on over 1,100 stocks and ETFs.<\/strong><\/p><p><strong><span style=\"text-decoration: underline;\"><strong>With this research process in<\/strong> place, we can recognize significant developments, and we can identify situations in which it would be prudent to take action in managing portfolios<\/span>.\u00a0 Such actions might include<br \/><\/strong><\/p><ul><li><strong> increasing or decreasing equity exposure<\/strong><\/li><li><strong> overweighting or underweighting certain sectors<\/strong><\/li><li><strong><strong>buying or selling certain stocks.<\/strong><\/strong><\/li><\/ul><p><strong>An example of how this process adds value beyond studying the economy and setting a price target is provided in my report &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/example-of-market-analysis\/\" target=\"_blank\" rel=\"noopener\">Investment Strategy Case Study<\/a>.&#8221;\u00a0 \u00a0<\/strong><strong>Other examples focused on sectors and industry groups are provided in the report &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/sector-rotation\/\" target=\"_blank\" rel=\"noopener\">Sector Rotation<\/a>.&#8221;<\/strong><\/p><p><strong>Various other articles under the heading &#8220;Excerpts from White Papers&#8221; contain additional examples and discussions of these issues:<\/strong><\/p><ul><li><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><span style=\"text-decoration: underline;\">In May 2008<\/span> this type of analysis showed that it was prudent to reduce equity exposure and move to an overweighted position in the consumer staples sector (please see the article &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/long-term-market-analysis\/\" target=\"_blank\" rel=\"noopener\">Long-term Market Analysis<\/a>&#8220;).<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><p>\u00a0<\/p><\/li><li><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><span style=\"text-decoration: underline;\">In September 2014<\/span> it was clear that the energy sector should be underweighted, and <span style=\"text-decoration: underline;\">in July 2016<\/span> it was clear that the semiconductor group should be overweighted (please see the article &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/sector-rotation\/\" target=\"_blank\" rel=\"noopener\">Sector Rotation<\/a>&#8220;).<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><p>\u00a0<\/p><\/li><li><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><span style=\"text-decoration: underline;\">In February 2016<\/span> the conclusion was to increase equity exposure and buy certain stocks such as Nvidia (NVDA) (please see the article &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/short-term-market-analysis\/\" target=\"_blank\" rel=\"noopener\">Short-term Market Analysis<\/a>&#8220;).<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><p>\u00a0<\/p><\/li><li><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong>I<span style=\"text-decoration: underline;\">n April 2017<\/span> this process led to the conclusion that we should overweight the technology sector and buy electronic gaming stocks such as Take Two Interactive (TTWO) (please see the article &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/managing-data-effectively\/\" target=\"_blank\" rel=\"noopener\">Managing Data Effectively<\/a>&#8220;).<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><p>\u00a0<\/p><\/li><li><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><span style=\"text-decoration: underline;\">In early October 2018<\/span> the conclusion was to adopt a more defensive investment posture, underweight the technology sector, and overweight the utilities sector (please see the article &#8220;<a href=\"https:\/\/straussresearch.com\/index.php\/example-of-market-analysis\/\" target=\"_blank\" rel=\"noopener\">Investment Strategy Case Study<\/a>&#8220;).<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><p>\u00a0<\/p><\/li><li><strong><span style=\"text-decoration: underline;\">In late December 2018<\/span> the conclusion was to increase equity exposure, to take advantage of the market&#8217;s extremely oversold condition.<\/strong><\/li><\/ul><p><strong><br \/>In each of these cases, the research process discussed above leads to valuable investment conclusions in a forward-looking way.\u00a0 Because it is based on proven investment principles, this logical research process is likely to continue creating good investment outcomes in the future.<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Note:\u00a0 the three blog pages in this section are to answer the question, &#8220;What is unique and valuable about your approach?&#8221; Studying the economy, making an earnings estimate for the S&amp;P 500, and multiplying it by a P\/E ratio is a logical way of forecasting a target price for the market.\u00a0 I spent years following [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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