Invest with Probability, Not Opinions
Screen ~980 stocks → simulate 2,000 returns → build optimal portfolios with measurable odds.
For diligent investors, advisors, and allocators — not noise-driven traders.
Live probabilities and today's confidence metric
Why This Matters
Most investors rely on price targets. Merkapital quantifies probability.
“Probability beats predictions. Insights beat opinions.”
“Merkapital's Conviction Scores replaced my gut calls with defensible odds.”
How It Works
The pipeline from data to conviction.
A Three-Stage Selection Pipeline
Nearly 1,000 stocks → narrowed to the 10 with highest risk-adjusted probability.
Universe & Data
S&P 500, large/mid-cap NYSE and NASDAQ, select ADRs. Ten fundamental data points per stock: price, earnings estimates, profitability, analyst targets.
Micro-cap and OTC excluded.
Scoring & Simulation
Scored 0–100 across five factors, then 2,000 GBM paths per stock via Merkapital Simulation Engine™. Full 1-year return distribution.
Bayesian shrinkage on drift. Per-stock volatility from Forward P/E.
Portfolio Construction
Ranked by risk-adjusted composite: Sharpe proxy, upside probability, downside protection, quality, data completeness. Top 10 equal-weight, validated by 5,000 portfolio simulations.
Equal weight outperforms optimization (DeMiguel et al., 2009).
Five Factors. Four Decades of Research.
Peer-reviewed factors, weighted by empirical predictive power for 1-year returns.
Earnings Growth
Forward EPS growth + YoY momentum. Strongest 1-year predictor.
Analyst Consensus
Price vs consensus target. Predicts direction ~60% of the time.
Value (PEG Ratio)
Growth cheap or expensive. PEG < 1 historically outperforms.
Quality (ROE + Margins)
ROE + margins. Competitive moats and earnings durability.
Market Base Rate
Bayesian prior anchored to S&P ~10%/yr. Prevents excess bearishness.
Merkapital Simulation Engine™
2,000 GBM price paths per stock over one year. Drift from five-factor score; volatility from Forward P/E.
Full probability distribution — not a point estimate. P(positive return), median outcome, 10th and 90th percentiles.
where Z ~ N(0,1), T = 1 year
Optimal Portfolio Construction
Ranked universe → top 10 by risk-adjusted return and downside protection.
Ranking Criteria
Why Equal Weight?
1/N equal-weight outperforms mean-variance optimization in practice. Estimation errors in returns and covariance negate theoretical gains.
DeMiguel, Garlappi & Uppal (2009), Review of Financial Studies
Portfolio-Level Validation
5,000 portfolio-level simulations. Independent draws per holding; equal-weighted outcome. Captures diversification and aggregate risk.
Research Foundations
Decades of asset pricing, factor forecasting, Bayesian estimation. Every design decision traceable to peer-reviewed literature (1952–2019).
Clear signals, not noise.
Highest-probability stocks, downside risk, and factor rationale at a glance. Plain language. No black boxes.
Methodology you can audit.
Factor decomposition, documented weights, Bayesian shrinkage, per-stock volatility, portfolio simulation. Transparent codebase.
The numbers you need — not opinions you don't.
From data to decision in minutes.
Join other thoughtful investors. Start with a free account — see top stocks and probabilities today.