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Why Does Dual Momentum Outperform?

Those who have read my momentum research papers, book, and this blog should know that simple dual momentum has handily and consistently outperformed buy-and-hold. The following chart shows the 10- year rolling excess return of our popular Global Equities Momentum (GEM) dual momentum model compared to a 70/30 S&P 500/U.S. bond benchmark [1] Results are hypothetical, are NOT an indicator of future results, and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Please see our Performance and Disclaimer pages for more information. GEM has always outperformed this benchmark and continues to do so now, although the amount of outperformance has varied considerably over time. In 1984 and 1997-2000, those who might have guessed that dual momentum had lost its mojo saw its dominance come roaring right back. In Chapter 4 of my book, I give a number of the explanations why momentum in general has worked so well and has even been called the “premier anomaly” by Fama and French. Simply put, reasons for the outperformance of momentum fall into two general categories: rational and behavioral. In the rational camp are those who believe that momentum earns higher returns because its risks are greater. That argument is harder to accept now that absolute momentum has clearly shown the ability to simultaneously provide higher returns and reduced risk exposure. The behavioral explanation for momentum centers on initial investor underreaction of prices to new information followed later by overreaction. Underreaction likely comes from anchoring, conservatism, and the slow diffusion of information, whereas overreaction is due to herding (the bandwagon effect), representativeness (assuming continuation of the present), and overconfidence. Price gains attract additional buying, which leads to more price gains. The same is true with respect to losses and continued selling. The herding instinct is one of the strongest forces in nature. It is what allows animals in nature to better survive predator attacks. It is built in to our brain chemistry and DNA as a powerful primordial instinct and is unlikely to ever disappear. Representativeness and overconfidence are also evident and prevalent when there are strong momentum-based trends.Investors’ risk aversion may decrease as they see prices rise and they become overconfident. Their risk aversion may similarly increase as prices fall and investors become more fearful. These aggregate psychological responses are also unlikely to change in the future. One can easily make a logical argument for the investor overreaction explanation of the momentum effect with individual stocks. Stocks can have high idiosyncratic volatility and be greatly influenced by news related items, such as earnings surprises, management changes, plant shutdowns, employee strikes, product recalls, supply chain disruptions, regulatory constraints, and litigation. A recent study by Heidari (2015) called, ” Over or Under? Momentum, Idiosyncratic Volatility and Overreaction “, looked into the investor under or overreaction question with respect to stocks and found evidence that supported the overreaction explanation as the source of momentum profits, especially when idiosyncratic volatility was high. A number of economic trends, not just stock prices, get overextended and then have to mean revert. The business cycle itself trends and mean reverts. Since the late 1980s, researchers have known that stock prices are long-term mean reverting [2]. Mean reversion supports the premise that stocks overreact and become overextended, which is what leads to their mean reversion. We will show that overreaction, in both bull and bear market environments, provides a good explanation for why dual momentum has worked so well compared to buy-and-hold. Dual Momentum Performance Earlier we posted Dual, Relative, & Absolute Momentum , which highlighted the difference between dual, relative, and absolute momentum. Here is a chart of our GEM model and its relative and absolute momentum components that were referenced in that post. GEM uses relative momentum to switch between U.S. and non-U.S. stocks, and absolute momentum to switch between stocks and bonds. Instructions on how to implement GEM are in my book, ‘ Dual Momentum Investing: An Innovative Strategy for Higher Returns with Lower Risk’ . Results are hypothetical, are NOT an indicator of future results, and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Please see our Performance and Disclaimer pages, linked previously, for more information. Relative momentum provided almost 300 basis points more return than the underlying S&P 500 and MSCI ACWI ex-US indices. It did this by capturing profits from both indices rather than from just from a single one. We can tell from the above chart that some of these profits were due to price overreaction, since both indices pulled back sharply following strong run ups. Even though relative momentum can give us substantially increased profits, it does nothing to alleviate downside risk. Relative momentum volatility and maximum drawdown are comparable to the underlying indices themselves. However, we see in the above chart that absolute momentum applied to the S&P 500 created almost the same terminal wealth as relative momentum, and it did so with substantially less drawdown. Absolute momentum accomplished this by side stepping the severe downside bear market overreactions in stocks. As with relative momentum, there is ample evidence of price overreaction here, since there were sharp rebounds from oversold levels following most bear market lows. We see that overreaction comes into play twice with dual momentum. First, is when we exploit positive overreaction to earn higher profits from the strongest index selected by relative momentum. Trend following absolute momentum can help lock in these overreaction profits before the markets mean revert them away. Second is when we avoid negative overreaction by standing aside from stocks when absolute momentum identifies the trend of the market as being down. Based on this synergistic capturing of overreaction profits while avoiding overreaction losses, dual momentum produced twice the incremental return of relative momentum alone while maintaining the same stability as absolute momentum. We should keep in mind that stock market overreaction, as the driving force behind dual momentum, is not likely to disappear. Distribution of Returns Looking at things a little differently, the following histogram shows the distribution of rolling 12-month returns of GEM versus the S&P 500. We see that GEM has participated well in bull market upside gains while truncating left tail risk representing bear market losses. Dual momentum, in effect, converted market overreaction losses into profits. Market Environments We can also gain some insight by looking at the comparative performance of GEM and the S&P 500 during separate bull and bear market periods. BULL MKTS BEAR MKTS Date S&P 500 GEM Date S&P 500 GEM Jan 71-Dec 72 36.0 65.6 – – – Oct 74-Nov 80 198.3 103.3 Jan 73-Sep 74 -42.6 15.1 Aug 82-Aug 87 279.7 569.2 Dec 80-Jul 82 -16.5 16.0 Dec 87-Aug 00 816.6 730.5 Sep 87-Nov 87 -29.6 -15.1 Oct 02-Oct 07 108.3 181.6 Sep 00-Sep 02 -44.7 14.9 Mar 09-Nov15 225.7 89.4 Nov 07-Feb 09 -50.9 -13.1 Average Return 277.4 289.9 Average Return -36.9 3.6 Results are hypothetical, are NOT an indicator of future results, and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Please see our Performance and Disclaimer pages, linked previously, for more information. During bull markets, GEM produced an average return somewhat higher than the S&P 500. This meant that relative momentum earned more than absolute momentum gave up on those occasions when absolute momentum exited stocks prematurely and had to reenter stocks a month or several months later [3]. Relative momentum also overcame lost profits when trend-following absolute momentum temporarily kept GEM out of stocks as new bull markets were just getting started. Absolute momentum on its own can lag during bull markets, but relative momentum can alleviate the aggregate bull market underperformance of absolute momentum. Relative and absolute momentum therefore complement each other well in bull market environments. What really stand out though are the average profits that GEM earned in bear market environments when stocks lost an average of 37%. Absolute momentum, by side stepping bear market losses, is what accounted for much of GEM’s overall outperformance. Large losses require much larger gains to recover from those losses. For example, a 50% loss requires a subsequent 100% gain to get back to breakeven. By avoiding large losses in the first place, GEM has avoided being saddled with this kind of loss recovery burden. Warren Buffett was right when he said that the first (and second) rule of investing is to avoid losses. Increased profits through relative strength and loss avoidance through absolute momentum are only half the story though. Avoiding losses also contributes greatly to investor peace of mind and helps prevent us from becoming irrationally exuberant or uncomfortably depressed, which can lead to poor timing decisions. Not only does dual momentum help capture overreaction bull market profits and reduce overreaction bear market losses, but it gives us a disciplined framework to keep us from overreacting to the wild vagaries of the market. [1] GEM has been in stocks 70% of the time and in aggregate or intermediate government/credit bonds around 30% of the time since January 1971. See the Performance page of our website for more information. [2] See Poterba and Summers (1988) or Fama and French (1988). [3] Since January 1971, there have been 9 instances of absolute momentum causing GEM to exit stocks and then reenter them within the next 3 months, foregoing an average 3.1% difference in return.

GDXJ – Limited Downside And Great Upside Potential In A Rising Gold And Silver Price Scenario

A potential long term investment with limited downside and great upside potential. Diversity of holdings mitigates the downside risk. Virtually every component of the index would be on many people’s list of junior precious metals stocks to buy to take advantage of a rising price scenario. There are few sectors which have such a huge potential for massive gains as resource sector juniors, but to achieve these one not only has to pick a company which on its own has enormous potential in what is one of the riskiest sectors for any investor to dabble in, but also any gains may be doubly enhanced should the resource sector in which the chosen company operates also move from being extremely depressed into a strong recovery phase. Pick the right resource, and virtually any surviving junior will serve you well but, as was seen following the 2008 resource market crash, if you pick well gains could be massive – 1,000 percent or more. Arguably, now could be a really good time to buy into resource stocks. They have seldom been more depressed, particularly the precious metals, and industrial metals copper and iron ore. However the writer does not see any kind of sharp recovery ahead for either copper or iron ore in 2016, although looking further ahead one would still have to consider survivors in the industrial metals sector as being potentially very strong investments, but the fallout between now and then could be perhaps a risk too far. That leaves us with precious metals – perhaps the riskiest sector of all. However the collapse in prices has seen precious metals stocks come down dramatically over the past three years, since gold reached its top of around $1920 an ounce in 2012. Gold for example has fallen by 44% since, and has dragged the other precious metals down with it. Is now the time to climb back in? If one reads the mainstream media one could be forgiven for assuming that the gold price fall had been far greater – but a much bigger drop has been suffered by most precious metals mining stocks – and by the junior sector in particular – ‘so here there be bargains galore’ one would think. And so there most definitely are, but the risks in buying junior precious metals stocks can be enormous. Any prolonged continuation of gold’s fall, and that of the other precious metals could yet see some serious casualties in terms of corporate shutdowns, and/or sales at hugely below potential valuations, even for juniors who, on the face of things, have some really good potential projects, but do not have the wherewithal to progress them. Now we see the fundamentals for gold in particular on a supply/demand basis as being extremely strong, but it may still take time for the investment sector to come to terms with this. Demand for physical metal has been growing – particularly in Asia and the Middle East – and central banks have been net buyers further increasing demand for physical metal. Meanwhile gold inventories in the West have been declining drastically. Sales out of the Precious Metals ETFs, which kept the market well supplied particularly in 2013 when the price began to dive, are dwindling with the weaker holders already having exited. Low gold prices are beginning to see new mined production starting to fall back, while the same low prices keep the incentive for scrap sales low – so these have been dropping too. So here the prospects for junior gold and other precious metals miners look potentially strong. If there is a supply crunch coming ahead – see 2016 a crunch year for physical gold supply as we suggest – then precious metals, and precious metals juniors in particular should be a major beneficiary and we could see some dramatic stock price gains even on comparatively small upwards movements in the metals prices. The high risk investor is poised to climb back in given many feel the gold juniors are bumping along the bottom. So how does one mitigate the very serious risk element here. It’s all very well jumping into a junior stock, however good it seems on paper, but then some external black swan factor comes into play which completely wipes you out. This could be political, geological, financial, weather related, fire, flood, earthquake etc. – any number of things could bring an under- or tightly-funded project (the nature of most juniors) to a grinding halt. There is a way, though, of investing in this sector in a much safer manner, but still with phenomenal growth potential. As we noted above, if the metals prices rise the whole sector will accelerate – except perhaps a few players who get left in the wake. Consider here investing in an ETF which follows a major junior precious metals index. The diversity in the stocks followed helps mitigate the downside risk, but virtually all the individual holdings in the ETF have great upside potential in a rising precious metals market environment. OK, it also will mean that the whole is perhaps not as profitable as some key elements within it, but the overall potential remains massive. Such an investment is the Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ ) (listed on the NYSE Arca Exchange) which seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Global Junior Gold Miners Index. It has been bouncing along what many see as the sector bottom of late. It peaked back in November 2010 at around 171.84 and those who invested in it at the time, and stayed with it, would have lost just short of 90 percent of their investment given it is now, at the time of writing at least, at 18.95. Many feel the chances of it falling lower are decidedly limited, while the potential for recovery, if precious metals prices pick up, is very large. If it gets halfway back to its former high that would mean a gain of around 350 percent from its current level. While this might be a tall order in 2016 it is certainly not outside the bounds of possibility should precious metals start to move. Interestingly trading volume has been high over the past year when the price has fluctuated from around 18.30 to 30.10 so it tends to be easily tradeable and there are obviously others out there aware of its potential. The Index on which the ETF is based is also not based on fly-by-night juniors with little or nothing to offer except hope and a prayer, but also includes some significant miners which are probably highly offended that they might even be classified as juniors, like Hecla Mining (NYSE: HL ), Pan American Silver (NASDAQ: PAAS ), Centerra Gold ( OTCPK:CAGDF ), Evolution Mining ( OTCPK:CAHPF ), Oceanagold ( OTCPK:OCANF ), Osisko Gold Royalties ( OTC:OKSKF ) etc. to name but a few. The top 10 companies held, which include all the above, account for 42.75 percent of the total holding. Note also these include some significant silver miners, and history tells us that if gold begins to move, silver moves too – but faster! Indeed running down the full list of holdings all of them would be on many people’s list of potentially strong performing juniors. They include Pretium Resources (NYSE: PVG ) (developing one of the world’s highest grade – underground gold mines), Detour Gold and Lake Shore Gold ( OTCPK:DRGDF ) – both Canadian junior gold high flyers, Silver Standard (NASDAQ: SSRI ), Coeur Mining (NYSE: CDE ), First Majestic (NYSE: AG ) (all three prominent in the silver space). So – do take a look at GDXJ as a long term punt on a turnaround in precious metals prices. It is a junior investment which nowadays offers what we see as very limited downside, but has great upside potential in a more favorable pricing environment.

Market-Makers Compare Coming Prices For: Major Market Index ETFs

Summary Behavioral Analysis of the players moving big blocks of securities in and out of $-Billion portfolios provides insights into their expectations for price changes in coming months. Portfolio Managers have delved deeply into the fundamentals urging shifts in capital allocations; now they take actions on their private, unpublished conclusions. These block transactions reveal why. Multi-$Million trades strain market capacity, require temporary capital liquidity facilitation and negotiating help, but are necessary to accomplish significant asset reallocations in big-$ funds. Market-making firms provide that assistance, but only when they can sidestep risks involved by hedge deals intricately designed to transfer exposures to willing (at a price) speculators. Analysis of the prices paid and deal structures involved tell how far coming securities prices are likely to range. Those prospects, good and bad, can be directly compared. This is a Behavioral Analysis of Informed Expectations It follows a rational examination of what experienced, well-informed, highly-motivated professionals normally do, acting in their own best interests. It pits knowledgeable judgments of probable risks during bounded time periods against likely rewards of price changes, both up and down. It involves the skillful arbitrage of contracts demanding specific performances under defined circumstances. Ones traded in regulated markets for derivative securities, usually involving operational and/or financial leverage. The skill sets required for successful practice of these arts are not quickly or easily learned. The conduct of required practices are not widely allowed or casually granted. It makes good economic sense to contract-out the capabilities involved to those high up on the learning curve and reliability scale. It requires, from all parties involved, trust, but verification. What results is a communal judgment about the likely boundaries of price change during defined periods of future time. Those judgments get hammered out in markets between buyers and sellers of risk and of reward. The questions being answered are no longer “Why” buy or sell the subject, but “What Price” makes sense to pay or receive. All involved have their views; the associated hedge agreements translate possibilities into enforceable realities. We simply translate the realities into specific price ranges. Then the risk and benefit possibilities can be compared on common footings. A history of what has followed prior similar implied forecasts may provide further qualitative flavor to belief and influence of the forecasts. Certainty is a rare outcome. Subjects of this analysis Major market indexes are tracked by Exchange Traded Funds of different varieties; all of the major variants are covered here. There are the simple, direct price trackers of indexes that cannot be invested in directly, ETFs often used by market professionals. The ETFs more frequently traded in by public investors may carry prices at levels more conveniently accommodated by portfolios of individual investors. There are leveraged long ETFs with prices structurally engineered (and maintained) to move 2x or 3x the movement of the index being tracked. And there are leveraged short ETFs engineered and maintained to move the inverse of the price of the index being tracked. Here is a quick review of the market characteristics of this article’s subjects, their securities names and symbols and position now in current-year price ranges. Figure 1 (click to enlarge) These symbols are arranged first by the Indexes which can’t be directly invested in, then for each of those indexes the most widely utilized unleveraged ETF, the most heavily long-leveraged ETF, and the inverse, or short-structured ETF. There is no well-recognized symbol for an Index of mid-cap stocks, but three rows of ETFs in the same character sequence as the pattern for the recognized four (boldfaced) indexes close the table. Market liquidity is addressed in the first four columns of Figure 1. What leaps out is the huge capital commitment made, apparently by individual investors, of $66 billion in the Vanguard Mid-Cap ETF (NYSEARCA: VO ). At its average daily volume of trading, less than half a million shares, it would take 5 years for all investors to escape. Other ProShares mid-cap ETFs, like the ProShares Ultra MidCap 400 ETF ( MVV) and the ProShares UltraShort MidCap400 ETF ( MZZ ), also have less liquid involvements of double-digit days to turn over the capital investments, while most other index ETFs need less than 10 days. The largest, the SPDR S&P 500 Trust ETF (NYSEARCA: SPY ) needs only 6 market days to replace its whole commitment. The trade-spread cost to trade these ETFs is typically in single basis points of hundredths of a percent. That is in the same region of a $7 commission on a $10,000 trade ticket. Price-earnings ratios for these subjects range from 15 times earnings to 22 times. But appear to be of little influence in differentiating between their selection for portfolio participation. Notions of capital size or leverage seem to be of much more import. Where behavioral analysis contributes Investor preferences among these ETFs during the past year are indicated in the last two columns of Figure 1, reflecting on their price range experiences in that period, shown in the prior two columns. The Nasdaq 100 index [NDX] fluctuated the most, by 25% low to high, while the S&P500 traveled by only 14%. From a portfolio management viewpoint, what matters most is where holdings are priced now, compared with where their prices may go in coming months. Prices are, after all, what determine the progress of wealth-building, and are what can be a source of expenditure provision as an alternative to interest or dividend income. Ultimately price changes are the principal portfolio performance score-keeping agent. Where prices are now, in comparison to where they have been provides perspective as to what may be coming next. If prices are high in their past year’s range, for them to go higher means that their surroundings must also increase. If price is low relative to prior year scope, a price increase represents recovery. As you think about the security’s environment, does it seem likely in coming months to be one of stability, of increase, or of possible decline? How would such change be likely to impact the security under consideration? First there is a need to be aware of what has recently been going on. The measure for that is the 52-week Range Index. The 52 week RI tells what proportion of the price range of the last 52 weeks is below the present price. A strong, rising investment likely will have a large part of its past-year price range under where it is now. Something above 50, the mid-point of the range is likely, all the way up into the 90’s. At the top of its year’s experience the 52wRI will be 100. At the bottom the 52wRI will be zero. All the 52wRI can do is provide perspective. A look to the future requires a forecast. With that, expressed in terms of prospective price changes, both up and down, a forecast Range Index, 4cRI or just RI, gives a sense of the balance between upcoming reward and risk. This is what behavioral analysis of the actions of large investment organizations, dealing with the professional market-making community, can do. The process of making possible changes of focus for sizable chunks of capital produces the careful thinking that lies behind such forecasts of likely coming prices. Hedging-implied price range forecasts While the four boldfaced widely-recognized market indexes in Figure 1 can’t be directly invested in, professionals in the market-making community use security derivatives of them to perform large-scale hedging of portfolios on an asset class-wide basis. Hence we have forecast implications for those four indexes, as well as for the ETFs listed. Figure 2 tells what the professional hedging activities of the market-makers imply for price range extremes of the symbols of Figure 1, in the same sequence. Columns 2 through 5 are forecast or current data, the remaining columns are historical records of market behavior subsequent to prior instances of forecasts like those of the present. Figure 2 (click to enlarge) A lot of information is contained here, much of potential importance. Some study is deserved. Exactly the same evaluation process is used to derive the price range forecasts in columns 2 and 3 for all the Indexes and ETFs, regardless of leverage or inversion. Column 7’s values are what determine the specifics of columns 6 and 8-15. Each security’s row may present quite different prior conditions from other rows, but that is what is needed in order to make meaningful comparisons between the ETFs today for their appropriate potential future actions. Column 7 tells what balance exists between the prospects for upside price change and downside price change in the forecasts of columns 2 and 3 relative to column 4. The Range Index numbers in column 7 tells of the whole forecast price range between each row of columns 2 and 3, what percentage lies between column 3 and 4. It is what part of the forecast price range that is below the current market quote. That proportion is used to identify similar prior forecasts made in the past 5 years’ market days, counted in column 12. Those prior forecasts produce the histories displayed in the remaining columns. Of most basic interest to all investment considerations is the tradeoff between RISK and REWARD. Column 5 calculates the reward prospect as the upside percentage price change limit of column 2 above column 4. Proper appraisal of RISK requires recognition that it is not a static condition, but is of variable threat, depending on its surroundings. When the risk tree falls in an empty forest of a portfolio not containing that holding, you have no hearing of it, no concern. It is only the period when the subject security is in the portfolio that there is a risk exposure. So we look at each subject security’s price drawdown experiences during prior periods of similar Range Index holdings. And we look for the worst (most extreme) drawdowns, because that is when investors are most likely to accept a loss by selling out, rather than holding on for a recovery and for the higher price objective that induced the investment originally. Columns 5 and 6 are side by side not of an accident. While not the only consideration in investing, this is an important place to start when making comparisons between alternative investment choices. To that end, a picture comparison of these Index and ETF current Risk~Reward tradeoffs is instructive. Please see Figure 3. Figure 3 (used with permission) In this map the dotted diagonal line marks the points where upside price change Prospect (green horizontal scale) equals typical maximum price drawdown Experiences (red vertical scale). Of considerable interest is that the subjects all tend to cluster loosely about that watershed. This despite the fact that several short structured ETF subjects are present, along with several strongly (3x) leveraged ETFs of twin subject matter. If we were in a cheap market situation, or a threatening overpriced one, there would be strong clustering of each type of ETF structure, long and short, with emphasis by the leveraged ones. Instead, this is a mildly confused market with no clear indication of which way it may head next. Well, what about differing focus of investment subjects – giant capitalizations of the DJIA, or technology biases of the NDX, or small capitalizations of the RUT? The most restrained and best advantaged tradeoff is in [2] for the NDX index. Its ETFs are the PowerShares QQQ Trust ETF ( QQQ) at [17] and the leveraged ProShares UltraPro QQQ ETF ( TQQQ) at [8]. The short ProShares UltraPro Short QQQ ETF ( SQQQ) has strong upside prospects, along with ample risk involvement. Only the ProShares UltraPro Short Russell 2000 ETF ( SRTY) at [12] appears more hazardous, and without adequate redeeming reward proportions. Its levered relative, the ProShares UltraPro Russell 2000 ETF ( URTY) at [1], of the RUT and the iShares Russell 2000 ETF ( IWM) clan, may be over-reaching a bit. This kind of comparing between alternative investments is what often distinguishes the experienced investor from the neophyte. There are so many intriguing possible stories of investment bonanzas that it may be difficult to keep focus. And for the newbie investor deciding on what combinations of attributes may be most important is a daunting challenge. An advantage of the behavioral analysis approach is that price prospects suggested by fundamental and competitive analysis are being vetted by experienced, well-informed market professionals on both sides of the trade. Looking back at figure 2, there is a condition that may disrupt the organized notions drawn from Figure 3. Column 8 tells what proportion of the prior similar forecasts persevered in recovering from those worst-case drawdowns, and for the resolute holder turned into profitable outcomes, often reaching their targeted price objectives. Batting averages of 7 out of 8 and 9 out of 10 are quite possible to accomplish by active investors. Column 10 tells how large the payoffs were, not only of the recoveries, but including the losses. And those gains, in comparison with the forecast promises of column 5 offer a measure of the credibility of the forecast. There will be circumstances where credibility will be low and recovery odds worse than 50-50. When such conditions appear pervasive, cash is a low-risk temporary investment, sometimes the treasured resource. Conclusion Major market indexes currently present an array of reward-to-risk alternatives, but not in any clearcut organization shouting “do this, don’t do that.” Safety-seekers might favor Nasdaq stocks or ETFs over other securities, but the advantages are hardly compelling. At present elaborate preference systems do not offer much advantage, but that may be a passing condition. There are major benefits from using behavioral analysis to extend and enrich conventional fundamental analysis. A principal plus is the ability to make opportunity comparisons between very dissimilar situations. Additional comparative studies of ETFs are in preparation, they should provide further profit opportunities, as they already have this year.