What Happened in the Banking Sector Since COVID-19?

Meiru ZhongThis banking article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • Interest rates have had a roller-coaster ride during the pandemic, dropping to around 0% and then surging to 5%. Severe market volatility and soaring interest rates have negatively impacted banks' operations.
  • The collapse of Silicon Valley Bank (SVB) was mainly attributed to two reasons: interest rate risk and liquidity risk.
  • To restore public confidence in banks, the Fed reimbursed deposits of over $250,000 in each account for the two banks, created the Bank Term Funding Program (BTFP), and reviewed the 2018 law for stricter banking rules.

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Risk Parity Portfolio

Sergey Okun  This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.

Summary:

  • The risk parity portfolio technique enables us to identify optimal asset weights in the portfolio so that the contribution of each asset toward the total portfolio risk is equal.
  • I Know First provides daily market forecasts for a broad range of financial assets for six investment horizons from 3-day to 1-year which help to identify the most promising financial assets according to the AI algorithm.
  • We can build a portfolio based on the IKF AI algorithm, and construct the risk parity portfolio where each asset has the same risk contribution rate to the total portfolio risk.

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GME Stock Forecast: Will the Frenzy happen again in 2023?

Meiru ZhongThis GME Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • GME’s right-sizing business and outstanding performance in the fourth quarter and FY2022 undoubtedly rekindled investors’ confidence. It had a positive net income of $48.2 million in the fourth quarter of 2022, the first quarterly profit in two years.
  • GME’s borrow fees are 11.57%, making it the sixth most expensive stock to short, presenting a positive public sentiment towards investing in GME.
  • Ryan Cohen, GME’s Chairman, bought 100,000 shares on March 22, 2023, fueling the market’s passion for investment in GME.

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Herding Behavior on the Stock Market

Sergey Okun  This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.

Summary:

  • Herding behavior refers to the tendency of individuals to follow the actions or decisions of a larger group of people, rather than making independent decisions.
  • The CSAD model enables us to identify periods of herding behavior on the stock market.
  • We implement the CSAD model and identify cases of herding behavior on the stock market for the period from January 1st, 2020 to April 19th, 2023.

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HMM-Based Classification of Stock Market Stages

Sergey Okun  This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.

Summary:

  • Identifying the stage of the market enables traders to adjust their investment strategies to take advantage of the current market conditions.
  • The Hidden Markov Model allows us to determine the stock market stages.
  • We uncover patterns in the S&P500 index and VIX from January 1st, 2000 to April 6th, 2023 by using HMM to identify periods of bull and bear markets.

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BLDR Stock Forecast:  Will Their Success Continue?

Rafi ReesThis article was written by Rafi Rees – Financial Analyst at I Know First.

Summary

  • BLDR has increased its EPS 8 fold in the last two years while the share price has only doubled.
  • Structural underinvestment in the US housing market poses significant opportunities for BLDR to grow.
  • Given a 5x PE multiple, is this company undervalued?

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HOV Stock Forecast: How Much More can Hovnanian Climb?

Meiru ZhongThis HOV Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • There is a marked improvement in Hovnanian’s home sales as its ROE has rebounded from the trough, increasing by 15.2% in Q1 2023.
  • Although the housing demand is decelerated due to the uncertain economic outlook, the supply-demand mismatch is expected to drive HOV stock price to appreciate.
  • HOV attempts to reduce unnecessary costs, increase advertising expenses, offer favorable mortgage rates, and raise community counts to improve performance in 2023.
  • DCF values HOV stock price at $97, with 49% upside potential and technical analysis also supports this bullish forecast.

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Market Anomaly: Holiday Stock Return Effect

Sergey Okun  This article was written by Sergey Okun – Senior Financial Analyst, I Know First, Ph.D. in Economics.

Summary:

  • A correctly identifying market anomaly can generate a profit for an investor that enables him to beat the market.
  • We have tested the Holiday effect anomaly and we have found that exploration of this anomaly cannot provide an eager return for an investor today.
  • The I Know First AI algorithm can identify working market anomalies that could be difficultly recognizable for a general investor.

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