Three rules before you sign up for a momentum screen.

Momentum pays a premium most years and a tax in the years that follow a sharp turn. Owning it well means owning the math, not the marketing.

The skip month is the rule, not a detail.

The 12 minus 1 formation works because the latest month tends to reverse. Screens that rank on "last 12 months" without dropping the most recent month are buying short-term winners that the textbook said to sell. Same factor name. Worse factor.

Crowding is a tax that grows quietly.

When everyone runs the same screen, the same 30 names get bid up before the rebalance. Indian momentum products have multiplied in three years. The premium narrows. Worst 12M drawdown of -38.6 pct happened in the year crowding was loudest. The math is on the same page as the marketing.

Momentum is a regime trade, not a forever trade.

It wins in trending markets and crashes at sharp turning points. Daniel and Moskowitz documented this. Size momentum on what a 30 pct drawdown actually feels like to your sleep before you size it on long-run CAGR. The 5Y hit rate is 68 pct. The other 32 pct of windows is when the strategy is supposed to look broken.

Momentum works until everyone runs the same screen. Then it pauses, hands back a chunk, and works again. Two letters of the alphabet decide whether you are early or late, and one tax is the cost of admission.

Walk through the factor-models primer on the RupeeCase Learn hub before you size a momentum allocation.

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