Finding Edge For A Bet

One can never be sure of the certainty of a bet’s outcome. However, one can increase the probability of winning the bet (i.e finding the trading edge) by looking at “supporting circumstances“.

Without dwelling into detailed analysis of the industry and company factors, let’s look at a possible bet – CB Industrial Product (or CBIP). This company was covered in an earlier posting. Let’s take a long position bet on CBIP.

What are the supporting circumstances?

1. Possible re-bound movement (upon nearing the support zone of the lower BB range)

interactive_chart_d3d9446802a44259755d38e6d163e820.png

2. Trailing P/E is significantly below the average historical 5Y-P/E

PER Line CBIP.png

3. Target price by analysts is relatively higher than current price

Target Price.png

To reiterate again and again, a bet is always a bet. There is always a winner and a sucker for a bet. No one is guaranteed a perfect 10 out of 10 winning outcomes. One should always adopt a strict risk management approach.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE STRICTLY FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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