We covered our short in silver yesterday at expected value.
Below you will find a sample of instances where the market has overpriced the odds of continued loss. Included is the odds of the issue returning to within 1 sigma of expected value.
Each issue represents a short-term value proposition. Notably, Compass Minerals has suffered a dramatic decline, indicated by its current Advantage Betting Edge (ABE) of 18% and Discount to Expected Value (DEV) of 47%, as it lost an important USFS contract.
The below table is a small sample of the many issues that present with ABE’s on a daily basis. Holding times are discretionary. Expected Value is rarely our target. We take any action that exceeds a confidence interval of 95%. We rely religiously on the Kelly Criterion for bet sizing.
Trades in Dunn & Bradstreet, BCE, AEHR Test Systems, and Jinko Solar have been concluded.
| NAME | ABE | DEV | ODDS | MONEYLINE | IMPLIED PROBABILITY |
|---|---|---|---|---|---|
| AEHR | 11% | 38% | 1.33 | -307 | 75% |
| BCE | — | 5% | 1.45 | -220 | 69% |
| BF/B | — | 8% | 1.32 | -312 | 94% |
| CMP | 18% | 47% | 1.35 | -283 | 74% |
| INFY | 4% | 8% | 1.44 | -228 | 69% |
| NOA | 1.7% | 10% | 1.40 | -249 | 71% |
| RCI | 1% | 6% | 1.35 | -286 | 74% |
| TU | 1.83% | 8% | 1.37 | -269 | 73% |
| UAA | — | 13% | 1.43 | -230 | 70% |
