Equity Methodology – Services And Fees 

Open Interest Analyst (OIA) is a research service for financial professionals. My strength is analyzing markets through a technical and tactical lens in order to provide objective actionable research to portfolio managers. Markets are efficient engines that quickly absorb new information and I specialize in analyzing the rapidly changing parts. This enables Clients to make key investment decisions using performance based data because financial news, company/market narratives and forecasts can be wrong or misleading. I cover North American stocks, ETFs, U.S. commodity, financial and currency futures. Since 2014, OIA has been providing commodity research to subscribers of the Bloomberg Professional service. My book, How I Trade Stocks details my equity investment process and was published in December 2020. It can be found on Amazon and Barnes & Noble.

Stock picking is my specialty, but managing positions is just as critical, if not more so. To navigate markets, I employ multi-faceted technical tools and apply them to relative strength measurements of companies in relation to competitors, their respective industries and sectors. Financial metrics are important for evaluating the quality of companies and seasonal trends occasionally offer some interesting insights.

How I Select Securities

Securities to be considered for purchase using my optimal set-up must closely track or outperform the majority of their competitors, relevant industries, sectors and the S&P 500 one year-to-date after they have corrected to areas of previous price support. While securities may look terrific in three or six month time frames, the one year period smooths out the interim highs and lows. Although securities may outperform their benchmarks in a single year, I examine their price history over multiple years to flag if they are in long term bear markets. How I Trade Stocks discusses this topic in detail.

Positions must be managed after candidates have been acquired in order to maximize returns and minimize the loss of capital/profit. Having exits in place at trade entry helps to keep losses under control and is a key protocol of position management. The reason: trades may be ill timed and exiting early prevents further loss. However, this does not preclude re-entering previously exited positions if the set-up becomes favorable again. How I Trade Stocks discusses this topic in detail.

Controlling losses is a rarely discussed investment topic, but it is essential if your fund is to outperform.

Trying to prove an investment thesis by stubbornly holding losers risks additional loss and an underperforming portfolio. Many funds suffer multi-year losses because they are unwilling to liquidate losers. How I Trade Stocks discusses this topic in detail.

To assist managers with underperformers, I propose alternative candidates using my performance based methodology. Armed with this information, managers have the frame of reference to easily evaluate new securities before exiting underperformers. Pro or con, I always provide solid reasoning for every position. 

When long positions have advanced substantially and corrections are inevitable, my position management strategy calls for lowering risk. 

The rationale is that when securities become overbought relative to their major moving averages, the risk of corrections, or something worse increases. Every investor has had the unpleasant experience of seeing their profits/capital erode due to corrections or earnings reports that send equities lower. Typically, investors hold out hope for a full recovery but often this is wishful thinking. To help Clients mitigate the loss of profit, I make recommendations based on the setup of each position. 

There is more to my methodology and I look forward to answering your questions about it. Please contact me to discuss how I can help your firm reach its goals. 

Services And Fees

Portfolio review

I begin work by evaluating each of your positions for their performance against competitors, their industries, sectors, the S&P 500 and other indices of your choice. I send the results of the analysis for your review and give you my opinion on the current and future prospects of each position. This includes whether to hold, trim or sell them. At your request, I will supply alternative securities in the same industry/sector as the underperformers but only if they outperform. 

Long Candidates

An essential part of my work is to find new securities that possess the characteristics mandated by my methodology. This is a time consuming endeavor and because markets change rapidly, it is an ongoing process. Sectors, industries and companies move in and out of favor and I am looking for major turning points to uncover obscure opportunities. This gives your firm a special edge because the investment community ignores the tactical aspects of investing due to its labor intensive nature.

Short Sale Candidates 

Short selling is difficult for a variety of reasons. However, the primary cause is that investors are equally undisciplined about controlling risk on shorts as they are on longs. Also, many short sellers make the mistake of picking market tops and selecting candidates in bull markets. My short-selling strategies follow the same rigorous analysis and risk-management principles as my long recommendations.

Portfolio Monitoring

It is important for your portfolio to be monitored on a daily basis. I enter your positions into a database and this allows me to quickly assess your portfolio’s performance and prospects against benchmarks for any period. Using my technical tools, I assess the strength or weakness of your positions on an ongoing basis and notify you of material changes. If you want specific candidates to be followed, I will set up a separate watchlist and notify you of any new technical developments. When I see interesting opportunities, I send you charts with performance statistics. 

Research Notes

When little known developments occur in markets, I send research notes to keep you informed. For example, in early January 2022, the 2021 underperformance of QQQ and XLK against 2020 and 2019 was relatively unknown. However, this data point was the harbinger of sector rotation out of technology.

The fee for the services above is $4,500 per month with a three month commitment. Renewals are for a minimum of three months. The monthly fee also includes daily telephone/text/email communications with me during and after market hours. At the conclusion of each quarter and calendar year your firm receives a portfolio performance report. This shows how each security in your portfolio is performing relative to its competitors, industry, sector and your designated benchmarks for the periods.