₦airaland Forum

2012 to 2020 : Mean Reversion Variant

as u can see bellow the initial 1mil in 2012 generated 1.127 mils in 8 years. Very poor.

DrAwo:
Very interesting...

Mean reversion is a real thing indeed. Not sure if 1 month is a long enough time frame for the reversion to occur though...

It would be interesting to see the outcome of this strategy! I'll advice you think about publishing your results in any Nigerian investment journal (if there's any)...

Kudos...

You are probably right. Attached bellow are the results. I used the smaller morgan capital sample data running from march to yesterday.

To clarify a few things,

1. I collect the closing prices on the first trading day of the month and subtract the closing price at month end.
2. I do that for all listed stocks, then I pick the 5 lowest performers.
3. On the next month, I buy these stocks at the beginning of the month and sell at end.
4. I stake 200k equally on each selected stock.
5. Repeat the process over and over.
6. To make the automation more realistic, I also implemented trading charges. (1% from buy and 1% from sell)

Compared with buy and hold it didn't perform as well, while some stocks have netted over 80% in returns this strategy made only 17.7%. Maybe it will need a few tweaks here and there.

I also ran same test on the larger data set and I was only able to double the starting 1 mil by the end of the 8 years (2012 to 2020). I didnt post the results here because of the size of it.

Note: the whole thin was automated with a python script, it took me 2 hours, sha, to debug certain aspects of the code that were malfunctioning.

I will like deploy it live from January next year with 1 mil, I will keep u posted.

My only out of market period will be when brent crude drops below usd 40 a barrel.

I noticed something sha, but then their could be a bug in my calculations.

Don't know if you have heard of Mean Reversion, simply put, it assumes that if the price of a stuck deviates from its established mean value, it tends to return to its mean.

I wrote a small program that applied a version of this reasoning to our stock market data and it was profitable. Actually, I have two sets of data, one collected from investing dot com, running from 2012 to date and the other, I personally collected it from morgan daily price list correspondence, both were profitable.

The strategy is simple, and here it is:

I buy the five worst performing stocks(in terms of returns) of the last month, on the first of present month and sell on the last day of the month. I buy equal weight, that is if I am playing with 1 mill for example, I distribute 200k to each stock in d portfolio.

Very simple strategy, though it requires some amount of computing in other to scan through all 155 stock every month.

I am wating for zenith at km 20 or even 21 make I load more. Nothing new under the sun. Like Aunt Mcy56 said here if u are in for dividends no fear.

Even if drops to 15, I buy more. I dey load zenith dey go. No shaking.

Lazyyouth4u:
What excuses? Are you actually reading my comments well? Let me try to simplify for you.

Your father is wealthy and has 60 wives and 600 children. Does it mean you Osita are wealthy? Does it mean that you and all your 599 siblings will be living a good life? Go and ask children of rich polygamous men if you don’t know how it works.

Also, If you and some of your brothers leave your papa house to search for greener pastures on your own by picking menial jobs in another man company where the pay is decent and you can live a better life than you were living in your papa polygamous home, does it mean your father is poor?

Anyhow, this is my opinion. I understand you don’t agree with it. So please let’s move on.

If after sharing our father's wealth equally to all 600 of us and yet it is not enough to buy one car. Would you still think our family as wealthy?

On the other hand, if my ten elder brothers use mago mago divert the properties, they can be very wealthy.

Also, my father as a single individual can't be equated to Nigeria rather our family as whole is a better analogy.

If it was only 11 of us, we would surely be wealthy, but 600 of us ? No chance.

We can now move on.

Lazyyouth4u:
I understand that this is your opinion and respect that. But I have mine as well and it is that Nigeria is not a poor country. The wealth just doesn’t go round.

Just based on what is reported in the formal sector, Nigeria is the wealthiest African country. Imagine adding the goods and services produced and all the money made in the informal sector?

You cannot have people consistently making billions and billions of dollars in a country that is poor. There are all these other countries with many poor people. Burundi, South Sudan, Somalia, Liberia, Sierra Leone, Gambia, Niger, Chad. Why are they not going there to make money from the poor? There’s not a lot of money there. The investors won’t go there.

In a sane country where all these huge foreign corporations and few Nigerian business men are making billions and billions of dollars, there is no way the government isn’t making its own share of taxes, dividends, JV income and other remittances. There is a huge volume of formal and informal business activities going on in Nigeria and this does not happen in poor countries.

It is our population, bad corrupt leaders and inequitable distribution of wealth that makes the citizens so poor. The gap between those mega rich people and the very poor is so so so WIDE.

My opinion

Why making all these excuses?

Nigerias GDP is higher than Finland, Israel, Ireland to name a few and yet thousands of Nigerians leave Nigeria to go and do manual jobs in these same countries. Why not the other way round nah?

I don't know what you think wealth is, but if the standard of living of the average man is below par, how can you call that country wealthy.

Apart from oil and gas which other foreign corporations are in Nigeria making it big, raking in billions?
Don't mention telecom sector because it is in every country poor and rich.

Lazyyouth4u:
Bros, please don’t ever quote Wikipedia and expect to be taken seriously

Read my comment again very carefully and you will see that you have just corroborated my points.

Naija get money but the money no fit go round because our population too much and some people dey thief the money. While some few billionaires dey suck all the money for themselves and their family and friends without regard for the poor.

Think for a second. Why are some so called billionaires and foreign companies cashing out (in billions of dollars) from this country every year if it was a poor country? Haba.

I leave it to the experts to define what metric to use to classify a country.

But, if 90% of our population live in poverty would I be wrong when I say my qwantry Nigeria is poor.

Mahatma Gandhi once said "There is enough for everybody’s need and not for anybody’s greed".

Maybe, the high level of corruption and nepotism and all other vices Nigeria is known for are as a result of its humongous population.

Lazyyouth4u:
This guy is actually 100% right. Only thing is Nigeria is not the second or third wealthiest but the wealthiest country in Africa with a GDP of over USD400bn. The sixth largest producer of oil in the world cannot be a poor country. Nigeria is not a poor country!

Its citizens may be poor but as a country, Nigeria is not poor.

And he stated clearly what the issues are. Corruption, bad leadership and inequality. I will add the biggest issue which is huge unsustainable population growth.

What Japan may have in human capital, Nigeria has more than enough in natural resources.

The problem with this thread is herd mentality. We tend to think that if you are not Mr A or Mr B, then you can never be right as only Mr A and B are right all the time.

In terms of raw GDP Nigeria is first in Africa and number 30 in the world.

In terms GDP per capita at PPP, Nigeria is 17th in Africa and number 135 (IMF) in the world.

From wikipedia:
"Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita at purchasing power parity (PPP) is arguably more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market. "

Corruption aside, given our population, Nigeria is not doing that well. A family of 4 that earns 350k a month is far better than a family of 15 that earns 1 mil per month.

XiaoLi:
I think you are wrong here, inviting your spouse and children to your country of origin is different from inviting your immediate family to your country of residence. Do you think an American living in Nigeria will need a statement of account to get an american visa for his legally owned children born in Nigeria by a Nigerian woman? You can enlighten me.

Do parents own their children?

Neimar:
The 100
Classic ending tho

Good ending, but not as epic as The Originals or True Blood.

To my fellow pythonistas food don done o.

Algorithmic Trading with Python – Free 4-hour Course With Example Code Repos



https://www.youtube.com/watch?v=xfzGZB4HhEE

To my fellow pythonistas food don done o.

Algorithmic Trading with Python – Free 4-hour Course With Example Code Repos


https://www.youtube.com/watch?v=xfzGZB4HhEE

Lazyyouth4u:
My brother, sorry to say. I don’t agree. It is not as easy as that. Investing in equities is very high risk. You can get dividends today, tomorrow you may not. You can invest in stocks today and in a couple of years, the money invested will be halved. All it takes is for external shocks to hit the domestic or global markets and you will regret ever going there with your 500 million. And this generally applies to developed markets. Talk less of our inefficient market that can easily be manipulated.

Anyone that celebrates dividends hitting his or her account is not really thinking about what can happen to the share price in a short period of time. Some of us are after capital preservation o. It’s like a man that celebrates interest on corporate bonds hitting his account when he is not sure that he will even get half of his principal at the end of the corporate bond’s tenor.

No investor should ever put all his money in the Nigerian stock market.
The Nigerian stock market is a very high risk investment play. Anyone that says otherwise is setting people up for premium tears.

Yes, external or internal shocks can affect the stock market but also other forms of investment.

For example the Corona pandemic affected all forms of investment, but the stock market is kind of resilient it will get hit but rebounds especially the leaders in their individual sectors.

Unlike the USA and other developed countries with thousands of listed stocks on their stock exchange Nigeria has about 150 something. It is much easier to spot industry leaders.

Plus it has been proven that buying and holding "good" stocks is the safest form of investment beside real estate.

RayRay06677:
Advise needed here:

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Issuer River Jamieson SPV Limited
Guarantor Edo State Government
Programme Size ₦25,000,000,000.00
Issue Size Up to ₦25,000,000,000.00
Description Series 1 fixed rate senior guaranteed bonds
Sponsor Rating ‘A-’ by Datapro
[Bbb-] by Agusto
Issue Rating ‘A-’ by Datapro
[Bbb] by Agusto
Price Guidance 8% – 9%
Tenor 5 years
Par Value ₦1,000 per unit of the Bond
Issue Price 100% of par value
Units of Sale Minimum of ₦10,000,000 (10,000 units at ₦ 1,000/unit) and multiples of ₦5,000,000 thereafter
Security Structure Irrevocable Standing Payment Order of the State and Guarantee and the full faith and Credit of the State
Issue Date [●] 2020
Maturity date [●] 2025
Book Build Opens December 7, 2020
Book Build Closes December 11, 2020
Funding Date December 14, 2020
Day Count Fraction Actual / Actual
Offer Mode Offer for subscription via a book build
Coupon Basis Fixed rate, semi-annual
Principal Redemption Basis Amortising with a 1 year moratorium
Noting FMDQ Private Markets Platform
Use of Proceeds To finance identified infrastructural projects (refer to pricing supplement)

If I had that ur 300 or 500 mil u have been accumulating, I would have distributed it in the stock market earlier this year when prices were at their all time low. Stocks like dangote cement, zenith and okumuoil etc would have served all the diversification I needed. And just be a dividend collector for the next few years. A guaranteed 20% annual return plus asset appreciation would have been used to pursue this other riskier investments.

Dangote cement because Nigeria is a developing country and the need for building and construction materials will be in demand for a very long time. Also because the company is well established and will be very hard to be overtaken by new comers.

Zenith, well, any of d FUGAZ would do. The Nigerian banking sector is kind of solid, almost all monetary transactions go through banks.

Okumuoil is into the agricultural sector.

Don't mind my rambling, my views are usually very simplistic and I maybe very wrong.

RayRay06677:
YES SIR, LIKE I KEEP SAYING, I KNOW LESS BOUT IT BUT THOSE SHOUTING PONZI EQUALLY KNOW NOTHING BOUT IT

Why you dey shout nah, that music you are listening to is too loud o.

RayRay06677:
I know experts are employed to trade for the company, not one or two people, groups of people. ever wonder why they don't pay roi every day, its because some days are not profitable but in the average at month end, over 40% is made and u r given 10%, is that a big deal. take out time to understand before antagonizing. I am bothered that you castigate something you know nothing about. Take a challenge and learn about it, manuals are everywhere online. also read successful stories of people only live forex. Thanks

Why are you so eager to defend MBA, enjoy your loot in peace nah.

40% return on forex trading is not attainable, at least not regularly. Chai, na only u dey the market. Mind you any expert that has such capability don't need your money, even with one million naira starting seed, giving enough years, that guy will be richer than Bill Gates and Elon combined.

At 40% monthly return the risk will be catastrophic, the best in d game maintain between 5 to 10% monthly return with moderate risk. Don't even argue cos it is public knowledge, google returns from d best hedge funds.

Even HFT, high frequency trading algorithms, run by PhDs and computer scientists don't make 40% monthly, talkless of some bunch of guys using TA and manually placing trades.

Make I no hear that 40% again from ur mouth.

anjilgreat:
Lol!,

But some people really have strength and time to argue and engage in unfruitful discussions on this forum.

Hope you are doing great today?

Yes I am, and you?

A lot of digging around here, not cool. Aunty Anjilgreat, what do you think?

DexterousOne:
Naa
I'm not the same as TransatlanticEX
We are two very different people

Not you my friend.

NL1960:
No wonder you are polite and patient with her.

Organized labour has commended the recent measures of the Central Bank of Nigeria (CBN) aimed at shoring up the value of the Naira.

The Naira recently reversed its depreciation trend in the parallel market, recording N20 gain against the United States Dollar closing at N470 per dollar due to what observers attributed to the new rules introduced by the CBN, which allowed beneficiaries of diaspora remittances and foreign exchange transfers into domiciliary account, and collect the proceed in foreign currencies.

Speaking at the one-day interactive session with stakeholders on the five-year policy trust of the apex bank in Kaduna, weekend, Vice President of Industriall Global Union, Comrade Issa Aremu, hailed the CBN’s Monetary Policy Committee ( MPC) for resisting the pressures to benchmark the real value of Naira with what he called “speculative parallel market rates.”

He observed that Naira’s worth was better determined by “market fundamentals” aimed at driving growth and development protecting wage income rather than satisfying “the insatiable urge of currency speculators for unearned profits on the streets.”

He said Nigeria depends on imported inputs for industrial production, adding that “unmanaged exchange rates” and attendant devaluation would further increase the cost of production, depress wages, making the country uncompetitive and economic recovery intractable.

Comrade Aremu decried the rising inflation and price of foodstuff despite the efforts of the CBN to maintain price stability, blaming it on insecurity which he said had undermined agricultural production in the rural areas.

He urged the fiscal authorities in ministries of trade and investment, interior and agriculture to compliment CBN’s measures and stabilise the economy through appropriate industrial, agricultural and security policies that would stimulate and guarantee seamless productivity in the country.

Participants, drawn from affiliate unions of NLC and TUC and informal sector workers in the state, also acknowledged and commended the CBN’s development financing interventions in transportation, agriculture, cotton and textile sub-sectors, oil and gas sector aimed at self-reliance and domestic production.

On security, Aremu called for what he called “bi-partisan statesmanship through cooperation by states and non-state actors to confront banditry and criminal violence”.

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“Blame games and calls for resignations of President or Service Chiefs are not helpful. In fact, acrimonies and discordant voices only benefit criminals.

“What is needed is bi-partisan cooperation to confront insecurity and the burden is on President Buhari to rally the nation against growing threats to lives and livelihoods.”

He observed that the lasting solution to “physical insecurity is economic security” which can only come through decent jobs for millions of unemployed youth across the federation.

On-balance volume (OBV) is a simple accumulation-distribution tool that tallies up and down volume, creating a smooth indicator line to predict when major market moves might occur based on changes in relative trading volume.

OBV works best when testing around major highs and lows to measure for possible breakouts and breakdowns.

Investors can use OBV to provide many key predictions, such as a bullish divergence predicting the price will break resistance or a bearish divergence predicting a rally will stall or reverse.


Investopedia

While looking at volume can help investors determine where price action might be headed, on-balance volume produces clearer signals that assist investors looking to act on a trade. Volume shows crowd sentiment as price bars carve out patterns that predict a bullish or bearish outcome.

Volume supporting price action creates convergence, adding reliability to directional signals. Opposing action creates divergence, warning that market forces are in conflict, with one side eventually taking control. Volume interpreted through an accumulation-distribution indicator clarifies this process, giving reliable signals that influence position choice and trade management.

On-balance volume (OBV), developed by Joseph Granville in the 1960s, packs enormous use into a simple accumulation-distribution tool that tallies up and down volume, adding or subtracting the result in a continuous sub-total.

 The formula generates a smooth indicator line that carves out highs, lows, and trendlines similar to price bars. Comparing relative action between price bars and OBV generates more actionable signals than the green or red volume histograms commonly found at the bottom of price charts.

ojesymsym:
No, I guess you mean to add conglomerate but definitely not Dexter. I also at one stage thought it was an alter ego but subsequent events proved otherwise.
Their style of writing and experience is different.

All 5 monikers are from the same person. The dude is quite intelligent, I give him that.

As per the knowledge displayed, you should know that almost any subject has been discussed on this nairaland alone, talkless of scanning the breath of google. It is all here littered in thousands of threads, if you know how to search, you can effectively access what ever info u want with varying degrees of depth.

I am not saying anyone is less informed o.

ositadiima1:
Oga what is d meaning of Unamikot, are u one? I like how it sounds in my head when I say it in my mind sha.

Unam == One
Ikot == popular baby name in Akwa-Ibom

Lazyyouth4u:
I like you sarcasm ;. Keep it up!

In any case, Lamba na lies. Barny na Olosho

But your guy Trans aka logo aka Dexter can explain better. Na fellow lazy youth

Btw, no go call Miss Jekyll or Lav Lilly barney o..

But u called aunty Sholapey barney, that was very bad of you.

RayRay06677:
But am your mentor as am struggling hard to educate you. Ur head too strong, e no gree enter. Now I understand why the skin to skin is required at least a good kunk will reset your dead and unilateral thinking brain. Over sabi go run you down, watch it. Unamikot

Oga what is d meaning of Unamikot, are u one? I like how it sounds in my head when I say it in my mind sha.