Om A Torah-based Stock Prediction Algorithm
The data indicates that this algorithm being applied since 1897 yielded an investor 69% of total Dow returns.... with that same investor only being in the market for half the time(conceptualize only being in the market when the sun travels through the designated Dow rise prediction sectors). Being in the market half the time would ideally cut the risk in half. In this case, expectations were exceeded. The downside of applying this algorithm--as one would only be in the market half the time--is that the highs of the market are difficult to catch. The individual years of extreme lows for the Dow historically, however, were completely avoided in some cases of applying the algorithm. For example, in 1931, the Dow dropped 52%. Applying the algorithm that year and conceptualizing only being in the market when the sun traveled through the designated Dow rise prediction sectors, we yielded a positive 11%.
After unsuccessfully trying to discover--astrologically--a way to find something to improve the risk/reward ratio of this algorithm. I decided to turn to the Torah for help.
"At the end of every seven years, you shall celebrate the remission year. The idea of the remission year is that every creditor shall remit any debt owed by his neighbor and brother when God's remission year comes around. You may collect from the alien, but if you have any claim against your brother for a debt, you must relinquish it...." (Deuteronomy 15:1-6)
The correlation between Jewish Sabbatical years and major declines/crashes in stock prices is heavily studied. In the Judaism tradition, the number 7 holds great significance. Shabbat is observed on the 7th day of a 7-day cycle, the shmita or sabbatical year is observed on the 7th year of a 7 year cycle, and the Jubilee year is celebrated at the end of seven cycles of shmita.
I found a way to apply this concept of "every 7th year" to the algorithm and further improve its risk/reward profile. What I did was simply reverse the parameters of the algorithm during every 7th year of a 7 year cycle. Whereas normally, the sun traveling through a Dow drop prediction sector would mean the prediction of a market decline--now, in making use of the "every 7th year" concept by reversing the algorithm only during the 7th year, the sun traveling through a Dow drop prediction sector(during that 7th year) starts to mean the prediction of a market rise and vice versa... the sun traveling through a Dow rise prediction sector(during that 7th year) starts to mean the prediction of a market drop. See the results on the next page. Please note that I am not applying the actual Shmita years; I am simply applying that "every 7th year" concept.
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