More concept, ideas and investment strategies with Jitta
Jitta releases 4.0 algorithm update for picking wonderful stocks with less risks
In a few days, the year 2021 is coming to an end. Are you ready for the upcoming 2022?
Although the pandemic is raging on, stock markets worldwide have performed well throughout 2021. Which is nothing unexpected, as the world discovered a light at the end tunnel of the Covid-19 pandemic such as increasing rates of vaccination and new R&D movements from healthcare companies. It leads to economic recovery in most countries while revenues and profits of listed companies return to growth from the lowest base in 2020.
Investors around the world have better attitudes towards stock markets. As a result, capital flows resume investing in equities. Even though there are some volatilities, they have many lessons learned and know how to handle risks and impacts. Therefore, the 2021 stock markets haven’t collapsed since the world’s first pandemic.
However, various environmental situations can happen during the economic recovery cycle; for instance, central banks carry out their restrictive monetary policies in order to tackle rising inflation rates. They are considering cutting the amount of bond purchasing and planning for interest rate hike in 2022. We expect these factors will bring short-term volatilities in bond and stock markets worldwide.
Most importantly, the Covid-19 pandemic is still in this world along with many other mutant virus strains. When each new strain has been announced, the stock markets worldwide reacts inconsistantly and this is such a challenge for investors.
In 2021, overall stock market indices have risen, except China, although its economy recovers and listed companies’ financials show positive signs, the stock markets in China and Hong Kong have declined because the government is controlling and using crackdowns for some watched sectors such as internet platforms, big techs and property developers. Beijing is concerned on antitrust and monopoly issues, and aims to protect customers.
Jitta stock analysis is developed from a principle of investing in value stock, also known as VI – Value Investing and chooses to buy a good stock at a fair price through a development of AI and algorithm to explore 10-year financial statements and arrange into Jitta Ranking.
In 2021, stocks in Jitta Ranking Top 30 have performed well and beaten stock market indices. Jitta team chooses 4 stock markets from the platform covering 19 countries.
From the above table, you can see 2021 returns under Jitta stock analysis platform, making better results than compared stock indices. That is another proof that the value-based investment principle can generate such a great return amid various situations, pressuring the stock market all the time.
New algorithm to focus more on update financials
Although Jitta’s present algorithm is capable of making very good long-term compound returns, the team continuously develops and improves the algorithm to be more accurate, so you can use the stock analysis platform with more confidence to make your portfolio.
The core of Jitta stock analysis is to invest in a ‘wonderful company at a fair price’ according to the principle of value investing. If you invest in stocks in line with Jitta Ranking, you can beat the market in the long run. Jitta focuses on 3 algorithms which are;
- Algorithm for calculating Jitta Score
- Algorithm for calculating Jitta Line
- Algorithm for arranging stocks in Jitta Ranking
In 2020, Jitta developed and improved the calculation method of Jitta Score – wonderful company and Jitta Line – fair price to be more accurate in stock analysis. You can read the algorithm update for 2021.
In 2021, Jitta team focuses on experimenting, researching and developing on Jitta Ranking to be able to rank stocks that have a chance to create better returns in the minimized risk based on 3 main components including;
- Good company (Jitta Score)
- Fair Price (Jitta Line) compared to the present value
- Growth factor calculates from the latest performance.
Jitta emphasizes on a growth factor as businesses are changing and growing rapidly nowadays. We want AI to focus more on a balance of Value and Growth.
Warren Buffett said ‘Growth is a part of value’. Jitta team weighs more on present financials in order to arrange stocks in Jitta Ranking. The important figures are consisting;
- Growth on revenue from the last 4 quarters
- Growth on profit margin from the last 4 quarters
- Growth on profit from the last 4 quarters
The new algorithm is designed to analyze the growth of revenue, profit margin and profit which are the third part to arrange stocks for Jitta Ranking by calculating the latest performance of each company.
Jitta platform analyzes 3 figures from financial statements – revenue, profit and margin in total. There are 3 types of profit – gross profit, operating profit and net profit. You can find these figures on FactSheet of Jitta’s website
We adjust the algorithm to rank stocks that are worth investing and building portfolios. The company must have the consistent growth of revenue and profit from the last 4 quarters, also known as trailing twelve months (TTM) to focus more on the present figures and reduce mistakes in selected stocks that used to be good but the financial statement becomes unfavorable.
We have tested the new algorithm in Jitta Ranking Top 30 on all 23 stock markets, compared returns with the existing algorithm and stock market Indices to prove whether the efficiency of the new one should create better results. The results have come out as follows.
For the above table, the backtest from 5 year, 10 years and 15 years found that the new algorithm, arranging stock in Jitta Ranking could increase better returns. These figures have shown great results for those of you who are interested in long-term investment because building portfolios by ranked stocks in line of Jitta Ranking are more efficient based on the new algorithm.
With this algorithm adjustment for 2022, we have tested on 19 stock markets which are available on Jitta and added 4 new countries – Italy, the Netherlands, Brazil and United Arab Emirates, all together with 23 markets.
As we tested all 23 countries, the results were compatible with Jitta’s new algorithm. It reduces bias from developed AI and algorithms and overfitting problems from many in-sample data and parameters to be added. If developed algorithms are in line with Jitta’s investment fundamentals and come with accuracy, returns should be better than the existing one in most stock markets.
Jitta runs fast to the second decade.
This new algorithm update will be ready to use on January 1, 2022. You can review the analysis and new ranking to organize investment portfolios from the year 2022 onwards.
For private funds Jitta Ranking under Jitta Wealth management services according to investment plans in each country and business group, The system will adjust the stocks selection according to this new algorithm when entering the year 2022. You don’t have to do anything and you can be confident that your port will have ‘Good stocks at good price, and ready to get better returns’ from the new algorithm.
Jitta team will update historical returns and stock lists on https://library.jitta.com/en/ranking to match the new algorithm in the same period. We also do archives of historical returns and stock lists under the existing algorithm for comparison and studying further for a year period which can be viewed at https://library.jitta.com/en/archive/2021/ranking.
In 2022, Jitta will turn to 10 with a strong foothold. We are committed to our core mission – ‘To help investors create better returns through simple investment methods’. We have created many milestones over the past decade from the small Thai WealthTech startup to Jitta stock analysis platform with worldwide users. Furthermore, we established Jitta Wealth Asset Management – the private fund business for the Thai market, regulated by the Securities and Exchange Commission (SEC).
Jitta is still engrossed in the core mission. Thanks to all investors around the world for your support and we promise that we will develop our technology for your benefits in a bid to step into the second decade with a stronger foothold.
Jitta, also known as Jitta Dot Com Company Limited is Thai WealthTech startup to design and develop the stock analysis platform, covering more than 20 countries. The company was established in 2012.
Jitta Wealth Asset Management Company Limited is the first WealthTech startup to manage private funds. As a part of Jitta, the company was founded in 2018 and given the private fund license from the Finance Ministry. Jitta Wealth is regulated by the Securities and Exchange Commission (SEC) of Thailand.