Help picking the best Industry

[Fran8]

Hi everyone
I would like to get some help to find the best futures industries. I know that is complicated and that everyone is going to say that if was that simple I would be the richest man in the world and bla bla bla. I use a combination of technical and fundamental analysis, most people tell you that you should find the best industries and then the best stocks on the top industries but then, the way that they pick the best industries is too technical and to vague for me. Like in the book “How to make Money in Stocks” that says that picking the right industry is half the return that you would get from a stock and then goes by saying pick the best 50 industries that have the best 6 month Relative Strength, then on a very similar book of Stan Weinstein “Secrets For Profiting in Bull and Bear Markets” says that you have to do stage analysis base on the 150 week moving average line.
To be honest if the industry that you select is so important I think that booth explanations are a bit simplistic, also I would like to get in the trend a bit before the industry is already over the moon.
I have been trying to find books about this topic without success, also I have search other strategies base more on fundamentals but they are all pure bottom up and they just compare the stocks with the industry and nothing else.

Please heeelllllllpppppppppp

 

[Joey25]

Look up "Barra model"; this is a multi-factor equity model and will allow you to focus on risk translated into reward.

 

[Fran8]

I have google it and found some papers, I have to go more trough the papers but is more related to risk reward.

Can you help with something more specific on how to find the top industries

 

[Pento]

What do you mean best futures industries? You mean the futures contracts in which you can make most money? If that's what you are asking then I doubt anyone who has found the golden goose of a contract will go around telling everyone else

 

[Joey25]

I have google it and found some papers, I have to go more trough the papers but is more related to risk reward.

Can you help with something more specific on how to find the top industries

You could look also look at the Fama-French 3 factor model, which is an extension of the Capital Asset Pricing Model.

Alternatively, draw an XY-scatter graph of the daily returns of some sector against its underlying stock index. If the slope is steep, then this sector will outperform the stock market when it does well. You can't get away from having to make forecasts, but in this case your forecasting is on the overall economy (top down) and you just pick industries to suit.

At the next stage you drill down to individual stocks within an industry.

So, your train of thought might be - inflation is on the horizon, which will have to be met by rising interest rates. This is bad for the stock market since it discounts future dividends at a higher rate. Therefore I'm looking for a safe industry, e.g. utilities. Within utilities, which is safer, electricity or water? And so on...

 

[Fran8]

What do you mean best futures industries? You mean the futures contracts in which you can make most money? If that's what you are asking then I doubt anyone who has found the golden goose of a contract will go around telling everyone else

No I mean to find good industries with upside potential