Tuesday, April 16, 2013

SNP Intraday Chart

Dow Jones Historical Chart

djia historical chart
Dow Jones Long term historical chart (monthly chart)

Best stocks to buy now

I have been wondering for the past many years as to why stocks I buy don't go up, or at least not as much others do. I mean there are so many stocks which double treble and go up ten times, and I just never seem to have any of them in my portfolio !! :)

A lot of reading lately though, I think has pointed to me in the right direction. As I read somewhere, one has to fish in the right pond - the one with the larger number of fish. If we consistently fish in a pond with no fish, obviously one is not going to catch any fish !!

The pond with no fish is a reference to stocks making 52-week or lifetime lows. And the pond with lots of tasty and big fish is the group of stocks making new 52 week or lifetime highs. Think of it, a stock which goes up say 10 times in 3-4 years time, does it go up 10 times in the first day itself ? Maybe it doubles first, and in the process makes new 52 week highs or maybe even lifetime highs. It would seem difficult to buy such a stock after it has already doubled - but the fact is it would go up another 5 times from there.

Its a simple concept no - today's largest companies were not born large. They were all small or mid sized when they first listed, and over a period of time they became huge. Their market caps must have grown multi-fold times in that process. Say a company with market cap of $100 billion might have listed at a market cap of 1 or 2 or even 5 billion. But from there it still grew 100 or 50 or 20 times to be what it is.

Yes, the point is also valid that how many of these small companies would grow this big, and how many would whither away or remain average performers. And how would one know in advance which one's would grow 100x and which one just 2x. Well that's the point right, when one buys stocks making new 52 week highs or new lifetime highs, one is not trying to forecast which ones would become the largest caps.

But even if 10% of these stocks would grow 100x over 10-15 years, then that would be enough to generate amazing returns for the portfolio. And its possible for companies to grow that much. Our markets are littered with stocks having market cap of 10 billion and above, and most of these would have started really small.

So there it is - the secret sauce. No longer secret. The best stocks to buy now or anytime are the ones making new lifetime highs or new 52 week highs. 

Tuesday, May 19, 2009

Sunday, May 10, 2009

Historical S&P 500 Index Weekly Data

Need Dow Jones Index Weekly Data since 1928 ?? Download Dow Jones Weekly Historical data since 1928 for free. The data is neatly cleaned and arranged in an excel file.

Friday, April 17, 2009

Calculate Exponential Moving Average in excel

How to calculate Dow Jones Exponential Moving Average - illustrated with data in excel spreadsheet.

What is exponential moving average(ema) and how is it different from simple moving average(sma)? Simple moving average takes an average of the no of days. So a 20 day sma would calculate an average of all the figures for preceding 20 days. In EMA, we give more weight to recent observations. This is done via using a factor called exponent.

The value for the exponent = 2/(No of days +1)
So for EMA of 20 days the exponent = .047619

Now we multiply today's closing figure with this exponent, and yesterday's EMA with (1-exponent) to get new ema. Obviously you have to start somewhere, so we start with a simple average for the first 20 data points and then move onto the EMA formula from there. Confusing? Have a look at the excel sheet it will become a little more clearer as to what it is that I am talking about and how exactly it is calculated.

Label: ema excel

Thursday, April 16, 2009

Calculate S&P Moving Average in excel

Someone asked me how does one calculate a moving average of any stock or index. So here's an illustration of how to calculate moving averages in excel using dow jones data. Simply open the spreadsheet and follow the calculations, they are very simple to understand. This is the simple moving average.

You can download the excel spreadsheet from here.

I have also included charts in another sheet in the same file. It has a couple of all time historical chart for the dow in both log scale and normal scale. There's another chart of the 2007-09 recession and stock market crash along with a comparison with the Great Depression of 1929-32. The same charts also have the 200 day moving average plotted to show how the 200 dma is a key technical level.