Author: mungofitch

Subject: Re: sector

Date: 9/7/2012

Recommendations: 5

But I don`t care. I would settle for knowing what Industry or Sector will get the best performance in the next year, or something like that. There are some industries which have fundamentally good economics, and others which have fundamentally bad economics. The past won`t tell you exactly what`s best mainly because a given sector might be overvalued or undervalued right now, but it`s probably a pretty good general guide. In the next 30 years medical devices are still going to be in the top quartile and airlines are still going to be in the bottom quartile. Try a simple screen of only only those things in the top N industries by past performance followed by a simple 1-year momentum sort (RRS preferably). My version reports a CAGR of about 27% using 15 stocks monthly. A pinch over 30% at 7 stocks deep. Obviously this is in the same past era that we know those industries did among the best, but it shows that having an industry edge makes a huge difference to an otherwise trivial screen. The all-industries version of the same thing reports CAGR 6.4%. Jim