Articles Written by:    DAN KNIGHT     

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August Is the Cruelest Month for Shorts

The month of August is quickly becoming a month of misery for hedge funds and short sellers in particular. Like last year, when the credit crisis seemed to initially explode and cause many large hedge funds, particularly quant-based ones that employ ...

From DAN KNIGHT, Seeking Alpha,  17 Aug 2008

The Divergence between Gas Prices and Energy SPDR

I noodled around with the recent monthly history of regular gas prices since 2000 and monthly performance of the Energy ETF XLE. As you can imagine, the two time series are correlated; as gas prices rise, so does the XLE. What was curious though was ...

From DAN KNIGHT, Seeking Alpha,  24 Jun 2008
Related Topics: Southwest Airlines

Even in a Down Market, Growth Outperforms Value

Analyzing sources of returns, I looked at the top/bottom quintile spreads of SP500 stocks ranked by various growth and value criteria. For example, the spreads between stocks ranked by earnings estimate revisions, upward vs downward, was 15%; for ...

From DAN KNIGHT, Seeking Alpha,  11 Jun 2008

High Beta Stocks: Plenty of Risk, Little Reward

Many investors try to add leverage to their portfolios through high beta stocks. The thinking is if the market rebounds, they will get a greater pop with the higher risk/higher return nature of high beta stocks, because we always read that high beta ...

From DAN KNIGHT, ETF Investor,  8 Apr 2008
Related Topics: NVIDIA

Falling Market and Rates+Volatility=Underperformance

I've seen some posts around the net about the VIX, or market volatility, and the level and change of the 10 year yield. The two measure a couple of powerful and somewhat predictive aspects of the market - the rate to discount future earnings, and a ...

From DAN KNIGHT, ETF Investor,  19 Mar 2008

History Can Repeat Itself with Earnings Surprises

United Natural Foods (UNFI) reported less than expected earnings last week, and that negative earnings surprise drove the stock down 25%. Since short the stock, I am elated, and one of the several reasons I am short is that the stock had missed ...

From DAN KNIGHT, ETF Investor,  25 Feb 2008
Related Topics: United Natural Foods, Inc.,  Whole Foods Market, Inc.

The Advantages of Short Selling

It always amazes me that so many active investors who pick individual stocks, rather than buy funds or get passive market exposure through index funds and ETF's, are unwilling to express their bearish views through short selling. Instead, they sell ...

From DAN KNIGHT, ETF Investor,  14 Feb 2008

How Short Sellers Can Help You Pick Winning Stocks

The proliferation of hedge funds over the last 5+ years has led to a dramatic increase in the amount of short selling. Traditionally, if an investor didn't like a stock, he could either sell it, if owned, underweight it relative to a benchmark or just ...

From DAN KNIGHT, ETF Investor,  11 Feb 2008
Related Topics: SLM Corporation,  Integrated Device Technology, Inc.,  Morgan Stanley,  Xerox,  Citigroup

Summing Up the January Effect, Looking to February and Beyond

January was unusual not just due to the market's losses, but more so by the magnitude that underperforming stocks from December outperformed. Typically in January, the most beaten up stocks from December, whether due to tax loss selling or ...

From DAN KNIGHT, ETF Investor,  4 Feb 2008

January Has Been Tough on Price Momentum

January has been a tough month for price momentum. Past winners are underperforming past losers, which generally is atypical. I researched how one measure of price momentum, trailing 6 months returns excluding the most recent month, has worked monthly ...

From DAN KNIGHT, ETF Investor,  31 Jan 2008

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