your expected value has to be positive: prob(right)*psyoff(right) > (1-prob(right))*payoff(not right) In general your opinion of prob(outcome) <> market implied prob(outcome)
Did the prop firm you worked for have any guidelines you had to follow? What were you trading? Futures, stock options, currency pairs?
Who said i was going to be a plumber? You cant even read a simple sentence on a fuckin forum. The Volcker rule is what they told you at least. No wonder why you have no idea what prediction means.
Maybe you are going back to school to be a mime. I don’t really care. Stick with your semantics. It’ll make you rich.
%% LOL + add dividends to that...……………………………………………………………………………………... OF course earnings matter==== that's why tech sector has been so super strong for decades. SQQQ+ inverse tech etfs do NOT change that; I trade both tech + inverse tech ETFs every now + then. AMZN is an extreme example+ good thing its tech sector. Debt +sales can matter also; ask Long Term Capital Management, LEH+ Bear Stearns. [Edit, thats NOT a prediction; big difference between a high probability + infallibility]
FarmerJ,to get back to your original question,you really should look at portfolio123 and,run backtests.The problem is,it,will only tell you what worked in the past,and last I looked there was no WFA..Its the best fundamental backtester on the,market,and if,nothing else it will introduce you rebalancing and ranking.You will discover if technical conditions increase returns for fundamental factor models.. As for your direct question,I would probably take R and D over Capex (for technology)to go along with some sort of rev/earnings metric..