Better Stock Picking and Factor Tests

July 09, 2020

  A deep dive into methods used for better stock-picking.  Louis Llanes and JP Tremblay delve into the benefits and pitfalls of factor testing using the scientific method for determining the criteria used to improve stock performance. Louis unpacks how fundamental analysis can capture information not found in quantitative analysis and how technical factors have been very effective in generating excess returns over traditional benchmarks over the long term. A discussion on how technical factors have demonstrated better information coefficients and improved risk-adjusted returns in factor tests that fundamental factors often favored by Wall Street. They uncover the results from a single technical factor used in the Wealthnet process for selecting stocks to illustrate the validation and replication of a factor.

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