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mYCharts - May 15, 2019

How Batnick Strips Emotion Out of Decision Making


The above chart is courtesy of Michael Batnick, CFA from Ritholtz Wealth Management, and the co-host of the enormously popular “Animal Spirits” podcast. Read our Q&A with him below and if you don’t already, follow him on Twitter @michaelbatnick.

Q: Can you tell us a little bit about Ritholtz and what you do there?

A: I’m the Director of Research at Ritholtz Wealth Management in New York where I help build portfolios and risk management strategies for our clients. Our focus on thinking and acting for the long-term is paramount and lies at the center of how we manage client portfolios. Behavioral counseling, a balanced investment plan and consistent communication are the tools we employ to help our clients reach their financial goals.

Q: How long have you been using YCharts?

A: I’ve been using YCharts for about two years. In that time I’ve seen new product launches like Model Portfolios that have really rounded out the platform. I continue to find myself logging back in on at least a daily basis, if not more often.Q: With the chart you submitted, your mYChart, what were you trying to analyze, understand or communicate?

A: The chart above (Click to view in YCharts) shows the S&P 500’s percent off high over the last year and the same metric for its top 10 constituents. People often look at what individual stocks are doing to try to predict what the market is going to do; however, most of the time this is a fool’s errand.

For instance, on April 22nd, the S&P 500 closed less than 1% off its 52-week high, yet the average stock was 12.8% off its 52-week high (and the median was -9.1%). At that time, only 27 stocks were closer to their 52-week highs than the S&P itself.

That seems crazy, but it goes back to one of Ritholtz’ core beliefs of stripping out emotional tendencies from decision making. Those big movements from individual stocks really aren’t indicative of the market on the whole.

Q: Is there a secret tip or shortcut that you’d like to share with other YCharts users or someone considering trying out the platform?

A: I don’t know how much of a secret this is, but there is a ton of great data in the equity universe. Just try out the Stock Screener tool and see for yourself. It allows you to compare the fundamentals of a company — pretty much any data point you could ever want or think of — which is virtually impossible without a tool like YCharts.

Q: In a recent client survey, YCharts users indicated that the platform saves them 3–4 hours per week. If this time savings is true for you, what do you do with your extra time?

A: It is absolutely true for me. I use the time savings to dig into more analyses and gain some unique insights, engage more of the investing/finance community on social media, and help my organization grow. One of my favorite things to do on YCharts is to compare performance for multiple securities with the click of a button. It’s so easy.

Michael Batnick, Ritholtz Wealth Management

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