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Any thoughts on FFTY (Innovator IBD 50 ETF)?
ETF and Market Evaluation for week of 06/05/2023
FFTY - Business Daily Investor 50 ETF - Poor performance is symbolic of CANSLIM effectiveness?
Dow Jones Futures Fall as Deutsche Bank Shares Sell Off on Rising Default Risks
Stalking the Bear: The dreaded rising wedge $DIA $MTUM $FFTY
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IBD CANSLIM ETF FFTY is up 40% over it's existence while the S&P 500 is up 1,014% over the same time. There is no time period that FFTY has ever outperformed SPY. It's a failed system that is not followed by real investors anymore. As you can see it's digital presence is as antiquated and dysfunctional as it's investing system.
Just found 2 new ETFs I like: $FFTY and $RFLR
FFTY - Innovator IBD 50 ETF
Honestly it didn’t dip as much as I’d have liked, last time it dipped down to around $25 and I was able to scoop shares before it v’d back up, this time it didn’t even get near $35. Oh well I’ll take the discount. I also saw today where it’s the top holding in $FFTY now 👍
If the people who run IBD and are the keepers of the CAN SLIM flame cannot make money, then CAN SLIM doesn't work. It may work once or twice and anecdotally, but over time and over many trades, it loses money. According to the FFTY's website, it is rebalanced every week. That is in line with CAN SLIM, where they often look at weekly charts. Weekly rebalancing should allow them to keep up with changes in the market. FFTY has a NEGATIVE return since inception. It lost more money than ARKK on many different timelines! Enough said.
>many, many times that a stock "was approaching the buy zone" even though it was up 75%+ from a low point. > >FFTY is up 8% year to date, about the same as VOO, but if you shifted around their buying... essentially they buy things way too late. And then they also hold until they lose bacl some ground as a principle. Interesting, thanks for that. The books stresses more than anything the importance of getting into a stock at the right time, so if their buypoint advice isn't holding up that's something to be aware of. I'm currently trying to track each of their buyzone/Stock of the Day recommendations to make some kind of opinion in the coming months/year. I just started with a small test account soon after the original post, first purchases were FTNT (sold when it hit -7% a few days later), PANW and DT (still holding and both up). All bought based on the IBD "checklist" being fairly flawless, and being in their recommended buyzone. I know it's far too early to make a call, but so far I enjoy the system and feel like I'm making a more informed decision on stocks. So far I agree, I think the IBD site is excellent (in my novice experience) for market round-up, suggesting stocks to check out, and their heads up on incoming quarterly reports. I'm probably too rigid on taking their buypoint advice as gospel, at the moment I don't see myself having the knowledge or confidence to make a move on anything even marginally outside the 5% zone, but at this stage I'm just happy to be able to work backwards and see the pattern and logic behind why that figure is suggested in the first place. Early days!
The FFTY ETF captures the following factors according to a quick screen on FF5 + Momentum: 1.20 Beta, 0.38 Size, 0.38 Momentum It also has tended to capture unprofitable and aggressively leveraged stocks. This is VERY similar to the ETF QMOM, with its 1.27 Beta, 0.53 Size, and 0.62 Momentum loadings. Even the profitability loadings are similar, at 0.54 and 0.55 . So really I'd argue that FFTY may just be a Momentum strategy with more aggressively leveraged companies. This also means that when overlevered and unprofitable companies got punished the ETF got punished right alongside them. In addition, QMOM has outperformed this ETF over QMOM's full lifespan with half the drawdown. I assume this is due to implementing 'frog in the pan' screening for less volatile Momentum that's less likely to reverse.
IBD is _extremely_ good at identifying stocks to keep an eye on. At the same time, during the Covid era, their choices of when to buy are nothing short of idiotic. I've seen them write many, many times that a stock "was approaching the buy zone" even though it was up 75%+ from a low point. FFTY is up 8% year to date, about the same as VOO, but if you shifted around their buying... essentially they buy things way too late. And then they also hold until losing a principle. Very odd philosophy, which I think is largely due to them using rules from decades ago rather than ones understanding 1) pandemic 2) FEDinflation policies 3) lack of a recession lots of people wrongly assumed would occur. Again, they have been outstanding in identifying winning stocks (like TGLS, ACLS and RMBS) but act very illogically in terms of buying and selling. Anyway, very good tool _to give you ideas_, but don't do what they say.
Check out FFTY. Already there
Growth 250 is a great list. I also like the FFTY. Great post and solid thesis.
Also, for that proof you’re desperate for. IBD has an ETF ($FFTY) picking their top 50 using CANSLIM and/or any other Willy methods. 3 Month Return: FFTY: -15%, S&P500: -4% 6 Month: FFTY: -32%, S&P500: -9% 1 Year. FFTY: -30%, S&P500: -2% 2 Year. FFTY: -1%, S&P500: +35% 5 Year. FFTY: +15%, S&P500: +68%
I'll just say that although they are similar, it's ok to invest in different ones. Not much different than investing all those dollars in a single ETF. And these are the type of investments you want. Note that S&P 500 diversifies based on market cap. So the biggest company is the biggest % holding. A very few companies make up the lions share. Most of the 500 companies are miniscule components. So it sounds big and diverse, but not so much really. There are ETFs that include the S&P 500 companies but at equal weights. The characteristics of these are very much different. The DOW interestingly is weighted by the price of one share of stock - which is pretty random. (If a stock splits, it's weighting is cut in half). Market cap doesn't affect weighting. Members keep their stock prices in a fairly narrow band - so they're sort or similar weight across 30 large very diverse companies. If a company is losing value, it's weighing drops with it's share price. And if one does very poorly, it drops out and a new company is added. I mix then up - S&P and DOW. There is some overlap (Apple), but they are different enough. Not nearly the tech presence in the DOW. Speculation that Google is doing it's 20 for 1 stock split to fit into the DOW stock price range. You might look at ETFs that track the S&P 500 (VOO, SPY, SSO), DOW (DIA, DDM), Nasdaq/FANG (QQQ), IDB Leaderboard (FFTY), lithium battery (LIT), these are some I own or have owned. Good choices all. Look at historic returns. Don't always trust the ratings. If you have a good feeling about a specific stock, proceed with caution. Carefully consider. I'd recommend 90-99% in ETFs. Pick individual stocks that get beaten up in a downturn. Like 2-3 weeks ago. Or better yet Mar/Apr 2020 (Tesla was like $80/share). I bought some down there, it was up 12x, but I'm still holding it at 8x long term. But most of my holdings are ETFs and they've performed extremely well. They're like the energizer bunnies. More often than not, a subset are rocking and pushing the index up rather consistently.
Unfortunately, I heard the same response from investors in ARKK FFTY type assets last Feb. when I posted about the 1st LQD breakdown. I'm simply sharing thoughts about protecting capital in this market I wish you nothing but success
I wonder if those ETFs follow the Canslim trading system (including entry discipline, exit discipline, position concentration and position reduction/increase based on market state) or whether they only buy and sell securities as they enter/exit the IBD 50 list. Looking at FFTY, it currently has 50 positions which makes me think it is the latter. I did simulations of the Canslim trading system - a fractional betting system, probability of win 50%, avg. gain 20% avg. loss 7%, and betting fraction 0.2. The simulations show that the system should work as advertised in books and the returns they claim should be achievable. The simulations also show returns can be improved very significantly by reducing exposure in unfavourable markets and increase it in favourable markets. Once I simulated this adaptive behaviour, I got return numbers in line with what Minervini, David Ryan and others claim they achieved. Still, similations are simulations. It is reassuring to hear from people who have been following the system and can tell you those results can really be achieved by regular individual investors.
Very old school it seems, but look at the IBD - Investor's Business Daily There's an ETF with 50 of their picks with very strong stocks that fit the CANSLIM method called $FFTY
Interesting, thanks for sharing that. From what I found, the ETF that IBD created (FFTY) seems to have generally outperformed S&P 500. https://www.innovatoretfs.com/etf/default.aspx?ticker=ffty