Image via WikipediaA study of 45 years of stock market data shows that some strategies produce greater returns than the S&P 500 while others produce less. A range of strategies were tested with the past data, re-balancing the strategies annually, with each strategy involving the 50 stocks which met the criteria for inclusion.

Here are the conclusions:

• Avoid buying last year's losers each year - as a rule, losers continue to be losers.
  
• Avoid buying companies on high multiples such as high price to sales ratio.
• Buy companies with high relative strength (shares that are rising) in combination with a value factor such as low p/e or low price to sales ratio (overlooked or out of favor sectors or old economy).
• Low price to sales stocks tend to out-perform the higher p/s stocks.
• Low price to cash flow stocks tend to do better than high p/cash flow stocks.
• Low price to book stocks tend to perform better than high p/b stocks.
• Price to sales ratio is the best single value ratio to use for buying market beating stocks.
• Last years earnings gains alone are worthless when determining if a stock is a good investment.
• Large well known stocks with high dividend yields tend to outperform the S&P500.
• Relative strength is the only growth variable that consistently beats the market.

Conclusions from James P. O'Shaughnessy's book "What works on Wall Street".

Labels: Stock market, strategies

Jim Rogers' commodity funds
"Bottom will come when market goes up on bad news."

“I am going to make a lot more money in agriculture than I am in gold or any stocks on the board. I know the inventories of food are the lowest they been in fifty years. Farmers cannot produce anymore. There is a shortage of tractors, tractor tires, seed, fertilizer. There is a shortage of farmers.”

“We are going to have an inflationary nightmare. Througout history whenever people have printed a lot of money, six months a year later you have terrible inflation. May I repeat again. May I urge you to buy some agricultural products. Massive inflation is coming and the only way to protect yourself is to be out of paper assets and into real assets.”

Jim is buying commodities and Swiss Francs. He is currently in short term treasuries but expects to get out soon and go short more government long term bonds. He also says commodities are still in a bull market, and has used this downturn to add to commodities, especially gold, and he expects to make the most money in agriculture in the years ahead.



The inventory of food is the lowest in 50 years. There is a shortage of farmers, tractors, tractor tires, seeds, etc. Jim says the bottom in equities will come when the market goes up on bad news.


Rogers International Commodity TRAKRS Index - $RCT

ELEMENTS Rogers Intl Commodity ETN - RJI

ELEMENTS Rogers Intl Commodity Agric ETN - RJA

Labels: agricultural products, commodity, Jim Rogers