Recently, I have experienced some significant setbacks concerning BIOPHARMASYS. I have also noticed in backtesting that this particular industry performs the worst. Removing it results in a 3% improvement in returns.
This industry is often volatile, and I observe extreme fluctuations as soon as figures are released. However, is it simply overfitting to drop the industry altogether? Have others had any success with merely excluding the industries that perform the worst in the backtest itself?
And for some reason I cant get the
But it seems to work in the universe.
My limited experience with these suggests that FDA approvals (or lack thereof) and buyouts have a much larger impact on small companies than traditional fundamentals. It can be interesting to track Phase III clinical trial submissions and bet on those binary outcomes. While I’ve made money doing that, I honestly believe there was a significant amount of luck involved and I do not try to do now. The "pop or drop" can be extreme.
If you don’t enjoy looking at Phase III FDA approvals, then P123 fundamentals may be missing the most critical signals and these stocks can be very volatile.
I could see going either way. Personally, I have not removed them and I do not look at FDA phase lll approvals at this time.
