Guide · Momentum
Does Frog in the Pan work?
Across 373 stocks, Frog in the Pan cut the worst fall on 84%, beat buying and holding on risk-adjusted return on 23% and on raw return on 21%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
Momentum built from many small up days lasts longer than momentum from a few big jumps, because investors underreact to slow, steady news. Hold a 12-1 winner only if more of its days were up than down.
- Checked on the last trading day of each month, over the window from 12 months ago to 1 month ago.
- In when the return over that window is above zero and the window had more up days than down days.
- Out at month-end when either fails.
Momentum plays bet that what has risen most over the past months tends to keep outperforming for a while. The family guide
How to use it
- It trades rarely (about 1.4 switches a year), so it suits someone who checks in occasionally, and a single bad call can last months.
- Expect to be wrong more often than right: only 44% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It worked best on Real estate (47% beat holding on risk-adjusted return) and worst on Big tech (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
Frog in the Pan did best against holding in the 2008 crash (+31% median gap) and worst in the 2020–21 rally (−18%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| Frog in the Pan | +31% | −7% | +0% | −18% | +8% | −7% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Real estate | 47% | -0.01 |
| Indexes & ETFs | 43% | -0.02 |
| Media & telecom | 40% | -0.05 |
| Financials | 38% | -0.02 |
| Sectors | 33% | -0.03 |
| Industrials & rentals | 33% | -0.11 |
| Energy & power | 27% | -0.06 |
| Software & devices | 26% | -0.11 |
| Metals & mining | 20% | -0.08 |
| Healthcare | 17% | -0.17 |
| Industrials & materials | 14% | -0.09 |
| Consumer & retail | 12% | -0.10 |
| Semiconductors | 5% | -0.12 |
| Big tech | 0% | -0.18 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
Frog in the Pan holds 217 of 377 names as of the Oct 13, 2026 close.
No changes of call in the last two weeks.
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.