Combining Value, Momentum, & Risk Management
We constantly analyze over 2000 stocks to find those which can thrive in a variety of market conditions. We then rank each stock based on three potential market conditions.
1. Value. Market capitalization of each company is compared to predicted value based on sales, growth, smoothed profit margins, and a discount rate appropriate based on company characteristics
2. Risk. We use regression analytics and the most recent major market declines to model potential losses, by stock, during any future potential sell off
3. Momentum. Similar to Risk modeling, we use recent market gains to identify factors most closely associated with individual stock outperformance… should positive market momentum continue
All three approaches are weighted to produce a final ranking, and yield a robust perspective on overall company attractiveness regardless of market direction. Technical analysis is applied as a final check to potential stocks identified via quantitative methods.
We would be honored to explain our philosophy and approach in more detail