THE STOCKS that make 20% YoY return

Hi, I’m philip pankaj from MetaAlgo.com, here I research, build, and deploy ML algorithms for fin-techs and investors. Recently many of my friends were involved in the stock market for meeting their short & long-term goals. Some of them asked me to research large-cap stocks for long-term safe investments. So, I was in a wild search for picking a single stock that could make a fortune. But soon realized warren buffet quote “Buy stocks like you buy your groceries, Not like you buy perfume”.

Since I have good experience in FX and macroeconomics, I can understand the whole picture of the economy and the role of the stock market. So, decided to pick solid stocks that can be clubbed into a basket for low risk and decent return.

So, I’ve decided to write an article on THE STOCKS that really lived in the worst times without breaking down a lot. No Fundamentals involved, purely data analytics.

The main objective of this analysis is to find solid stocks that hit least in the global crisis and given a decent return YoY.

THE STOCKS can only be proved when we have enough data and data analytics, so I used Yahoo finance and scraped all data from 2007 to 2021. Being a Data Whisperer I wrote few scripts and develop all the required metrics and functions.

All features are encoded with concern for future dependences. As a result, I found a list of stocks that have survived in the worst scenarios.

After rigorous random cross-fold testing and optimization, I further dropped some stocks and created a so-called THE STOCKS index portfolio.

After seeing the Equity Curve, I was amazed to find that THE STOCKS index YoY returns outperformed the Nifty 50 Index with a huge margin and with limited risk.

List of Crisis in this period 2007-2021:

2007-2008 – Lehman Brothers crash.

2010 – European Sovereign Debt Crisis, DJIA Flash Crash.

2015- Chinese stock market experienced a steep sell-off which set off a global rout.

2015-16 – With this plunge, an estimated ten trillion dollars had been wiped off the books on global markets since June 3.

2018-The S&P 500 index peaked at 2930 on its September 20 close and dropped 19.73% to 2351 by Christmas Eve. Bitcoin price peaked on 17 Dec ’17, then fell 45% on 22nd Dec ’17.

2020- This crash was part of a worldwide recession caused by the COVID-19 pandemic.

Equity Curve:

Initial Investment of 10,000 Rs. for a period of 12yrs.

Nifty 50 Index

ROI : 125+ %

YoY return: 8.85%

YoY volatility: 22.33%

Max Drawdown: 60.17%

THE STOCKS Index

ROI : 950+%

YoY return: 21.10%

YoY volatility: 18.07%

Max Drawdown: 43.17%

Insights of THE STOCKS index:

Sector Details:

Sectors

Percentage

FMCG & co.

49.8%

Pharma & co.

15.2%

Construction & Chemicals

19.4%

Conglomerate

10.1%

Housing Finance

5.5%

Total

100.0%

Stock Details:

Stocks

Percentage

HINDUNILVR

15.0%

ITC

14.5%

SHREECEM

12.1%

BIOCON

10.6%

RELIANCE

10.1%

PIDILITIND

7.3%

NESTLEIND

5.6%

DABUR

5.5%

HDFC

5.5%

BRITANNIA

5.4%

DIVISLAB

4.6%

MARICO

3.8%

Total

100.0%

This analysis converges to a conclusion where Food, health, and shelter are the basic focus of successful investors all these years.

There is no remainder between Age and evolution or Life and growth.

Thanks for spending valuable time here, I hope this will help you.

For Curious minds:

You can personally reach out to my LinkedIn or through Contact me form.