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The Art of Investing: Scoring Stocks
Barnes and Noble
The Art of Investing: Scoring Stocks
Current price: $9.95
Barnes and Noble
The Art of Investing: Scoring Stocks
Current price: $9.95
Size: OS
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Enter the fundamental metric information such as P/E for any 100 stocks into a scoring system. If the top 25% of the stocks perform a lot better than the rest in 6 months consistently, then it is a good scoring system.I have been using my own scoring system for years. It sums up the individual scores for selected fundamental metrics. When the total score passes a set number, I evaluate the stocks further for potential purchase. This scoring system has been updated many times for refinements and adapting to the changing market conditions. All basic metric information can be obtained from free web sites.Many companies and academic projects must have worked on this kind of stock scoring systems. However, few if any can prove their systems work consistently.I may have found the reason why it does not work consistently. The fundamental metrics change when market conditions change. To illustrate, the current market conditions may favor value stocks while some other conditions favor growth stocks. I monitor the performances of all the fundamental metrics periodically and make changes accordingly. Hence, I call my scoring system Adaptive Stock Scoring System (do not use the acronym).In writing this book, I switched the illustrative example from IBM to Apple IBM scored very low. Apple scored very high. This book was published in 06/2013. The performance of the two stocks from 06/03/2013 to 06/03/2014 are as follows: IBM-12%Apple41%SPY (for comparison)17%Size: 150 pages (6*9). Last Update: 01/2021.