Investing & Trading Day 4 - Clark May II


On Thursday, we focused on researching companies and testing our strategies. In the morning, we found two companies that were in the same industry and sector, and then we compared them to each other to determine which would be a better investment. Using financial statements, important numbers such as EPS, P/E Ratio, Debt, P/B Ratio, and news about the company, we concluded what company had a stronger outlook for investing. Afterwards, we did technical analysis to determine what would be a good price, and to find if it was at a good buy point. This project helped us further understand concepts we had learned earlier in the course, and taught us how to actually apply the strategies we learned. 

    In the afternoon, we further worked on our strategies and actually backtested our own. We used popular companies, for example AAPL, SPY, etc, and tested our strategies to determine how successful they were. Whenever our strategy was triggered, we bought (or shorted) the stock with a predetermined stop loss to see if we would make money. Many of our strategies were successful over time, but for many of us it would have been more profitable holding the stock instead of trying to time the market through swing trades (the test was done over a 5 year period). Both of these activities put us in real world situations and prepared us to be better, more prepared investors.

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