There's been a few developments for Adrian's Investment Models I want to highlight
First, I'm still working on the consumer staples article: "Is The Consumer Staples Industry Just Spinning My Wheels?". I'm about 60% done. Besides work and recovering from a busy work schedule slowing down my progress on the article, I'm taking more time to conduct deeper analysis and to provide more data to back up my points.
Second, it's been brought to my attention that more statistical tests are needed on my investment models to confirm/increase accuracy and to ensure that it's built properly. To give you an example, picture an investment model as a car. The car runs and has been tested in various real world driving situations (backtests), however, the engineers have not conducted detailed simulation runs to document engine response, fuel efficiencies, and breaking ability (statistical tests). Therefore, for the next few weeks I will be running a set of statistical tests on my models. I've already reached out to statistics experts in my network to guide me in the right direction. I will blog once I have results.
Third, I'm going to make tweaks on both the Energy and Consumer Staples Industry Investment Models. For the energy model, I am going to adjust the crude oil and petroleum production data for seasonality, that should smooth out model results. I don't expect it to significantly impact model results, but it will require me to rebuild the model and re-run the backtest. For the consumer staples model, the U.S. Census bureau adjusted historical data based on their Annual Wholesale Trade Survey and results from the 2012 Economic Census. This will also require me to rebuild the model and as a safety precaution re-run the backtest. I will try to finish them this weekend.
My outstanding to-do-list in order of priority:
- Finish my article: "Is The Consumer Staples Industry Just Spinning My Wheels?".
- Energy Industry Investment Model - Fix seasonality in crude oil and petroleum products production
- Consumer Staples Industry Investment Model - Update model for changes in annual merchant wholesaler update
- Finish building the Stock Market Investment Model
- Finish building the Consumer Discretionary Industry Investment Model
- Write an energy industry article
- Investigate why the price estimate of my Energy Industry Investment Model is much lower than the Energy Select Sector SPDR ETF's (XLE) price. I'm looking for evidence to support my hypothesis that dividend investors are propping up energy industry stocks.
- Investigate dot com era, dot com crash, and subsequent recovery effects on both the energy and consumer staples industry investment models.
- Investigate why merchant wholesaler inventory levels affects consumer staples industry stocks. I suspect two reasons: higher merchant wholesaler inventory levels equate to higher profit margins for consumer staples retailers or inventory levels is a result of future sales expectations.
- Write an article about lessons I learned from Mohegan Sun casino.
- Write an article about how to identify stock market tops.
Thank you for your patience as I try to balance work and my website.