V.16:14 (689): Product Review: Bollinger Group Power by John Sweeney

Bollinger Group Power (AIQ Systems, Inc.). John Bollinger's industry groupings arranged for use with AIQ's TradingExpert. by John Sweeney

Lately, group analysis has become more of an issue, with investors becoming more sophisticated in their trading of stocks, as opposed to buying and holding stocks. What were once one-industry decisions (high-tech first, last, and foremost) have become more difficult as the bull market has hesitated in late 1998 and defensive positions with equity upsides are more difficult to find.

Academic studies have long differentiated between return and risk due to the market versus those due to company capabilities. Analyst John Bollinger’s review of such studies places the return from stocks even more precisely: 50% is from the industry group. He assigns the remaining return to the market at about 30%, and the stock itself at 20%.

To make such an analysis concrete, Bollinger, who is best known as money manager, analyst, and newsletter publisher, has created his own industry groupings based not only on the line of business of each company but also the trading pattern of its stock. He has examined the correlation between stocks to see that they are not only in similar lines of business but also trade with similar price patterns. ...