This Is My Quant.
DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
Don’t Rage Against The Machine. Use The Machine.
by Alex King, CEO, Cestrian Capital Research, Inc
In all industries, artisan producers are lionized. Furniture, architecture, baking, jewellery, clothing, automotive, the charismatic hero provider is celebrated in all walks of life. And rightly so. Some of these artisans make money sometimes. A few of them make money a lot of the time.
But in most industries, automation is the driver of increasingly reliable production methods, quality control, and as a result, profit margins. The more precise the task, the more benefit can be obtained by automating it. Would you want your iPhone to run on a modem that had been hand-produced by a wizard of analog/mixed signal design? Or would you rather Apple or Qualcomm had learned how to churn these things out at high yield, low cost, and consistently? Me too.
One of the last vestiges of the supremacy of the artisan producer is investing. Although vast swathes of institutional money is run by machines, we still like to think of the hero manager able to cut through the noise to find signal - alpha - where others cannot. Rooms full of 13Fs tell us that such managers are few and far between, but we all like to think that they exist in number and, better, that we can become one of them if only we read more, chart better, work harder, stress less, drink more Celsius, or whatever.
Kudos to you if you like to pursue the artisan dream. There’s a reason Italian high-end independent fashion houses are still a thing.
But if you just like to make money quietly, and like to avoid losing money equally quietly, we believe machines are just as superb a tool in finance as they are in semiconductor manufacturing.
We run a quantitative signals service that utilizes machine learning AI techniques to assess risk in the S&P500 and the Nasdaq-100 markets. The math is complex, but the output is so simple that anyone can use it.
Risk on - the model believes capital can remain at work without risk of a material selloff. Signal = 1.
Risk off - the model believes there is sufficient risk of a material selloff that capital should be taken out of harm’s way. Signal = 0.
Signals are issued each day at the close.You can use this service for simple long-only investing and trading in SPY and/or QQQ or indeed any other security in the S&P500 / Nasdaq-100 complex.
The signals are not twitchy - the model doesn’t flip from Risk On to Risk Off, or vice versa, when a butterfly flaps its wings near the CME. But so far it has performed very well. You can see the full backtested results here.
If you had been using our SignalFlowAI QQQ service, and followed its signals, this is how you would have fared in the current correction.
(1) Avoided a so-far-max 6.7% drop in the Nasdaq or the QQQ ETF
(2) Avoided a so-far-max 20% drop in the $TQQQ ETF
and/or (3) Achieved a so-far-max 20% gain in the $SQQQ ETF.
You don’t have to follow the machine step by step. You can just use it in your own analysis if you prefer. But in my experience, it sure beats hoping your own bespoke recipes and methods keep on producing.You can learn more about SignalFlowAI right here:
Alex King
Cestrian Capital Research, Inc - 12 March 2025.