As I mentioned in my a recent post, the idea generator has a the win-rate of 61%, which has been generally consistent through several performance reviews. Likewise, the raw performance has a return of 4.4%, and it to has been roughly in-line with the return of the S&P when measured over the same time-frame through multiple performance reviews. One important distinction regarding raw performance, is that it’s exactly what it sounds like… the difference between price today, and when it was initially flagged by the idea generator. Moving forward, I expect we’ll make some changes so that the performance data remains meaningful when measured over longer time periods.
Some highlights of note since the signals were first generated in the idea-generator…
- HMNY had a 300% run
- AVAV is up 298%
- JP is up 72%
- FBR is up 23%
Of course, it’s easy to show you the best from a universe of 125 signals. But what about the loosers? Well, the worst trade flagged by the idea generator is VERI, which is -48%, followed by ALDX which is down -34%.
Taking a casual look at VERI, and ALDX neither of them meet my criteria for me to put a trade on. Obviously, I’m saying this in hindsight, but the reality is that I also reviewed my personal watchlists and neither made it onto either… in fact, neither made it onto my prewatchlist. This is telling for me, as I review signals generated for consideration in my own portfolio. With that being said, here’s a look at my reasoning from a quick review of both symbols.
VERI’s chart is a show-stopper for me. Even though the profile looks interesting… Cloud-based, SaaS, AI thing that does something in the media planning, buying and placement, campaign messaging, custom analytics, advertising space. All the right buzzwords are present. The problem for me, is that it’s just too recent of an IPO… there’s no history, and no setup for me to trade , so it was a non-starter from the get-go and never made it onto any of my watchlists.
ALDX on the other-hand, is a biotech play and part of the healthcare sector, which on the surface is of interest to me given the sector’s performance this year. Looking at the chart, the closing price when the signal occurred was 10.90 on 9/14, which is a bit low for me to get involved, though not disqualifying in-and-of itself. While there’s no obvious pattern for me to trade, the other problem for me is that it’s a clinical-stage biotech… which means that it has a long road to go before having a product to market. While it may be worth some more investigation if it’s a small-cap that might fundamentally change the landscape of healthcare, or dramatically change the way a big-problem is approached it’s not really a candidate for a trade. This doesn’t necessarily mean it’s not worth looking at, as I’ve had clinical-stage biotech successes in my portfolio in the past, but there’s nothing here to put it one of my trading watch-lists.
Again, this is all in hindsight but based in reality as neither signals made it onto my watchlists for further review. So how does my personal watchlist fair? That might be a topic for a future post.
