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1. How long have you been actually using BI?
2. What is your actual CAGR over that period?
3. Which additional cut-offs do you use -- EMA, EGR, F-score?

I've been using BI since 1999. BI was tough to use in 1999 with value stocks dropping as money managers were rolling out of value trying to catch the momentum wave. In 2000, I learned that catching falling knives was dangerous. So many NASDAQ stocks fell so fast that they plunged way below downside prices and looked like bargains. Part of the problem was it took VL a couple of reports to change their opinion of the stock (see footnote at end). Second, I got greedy and wouldn't wait for stocks to pull out of their dives before I would buy in. Since then I've had much better success to the extent that a large fraction of my portfolio is in BI stocks.

I haven't really tracked my BI CAGR over that period since I didn't do a very good job of detailing what were BI picks and which were MI picks. Some of my BI picks ended up on MI screens, as they made good progress and became momentum/growth stocks.

I started tracking EMA and Altman Z score several years ago in an effort to avoid falling knives and the financially unstable. At the beginning of the year, I try to buy the top S&P 500 using enhanced BI criteria. Enhanced BI means:
Current price below downside target price
Expected earnings growth of at least 10%
13 day EMA above 50 day EMA
Altman Z score at least 3.0 if defined or unavailable
Current price equal to or below simple intrinsic value price

Also during the year I'll try to pick up EBI selections especially in the fourth quarter and they've had a down year. I'm not completely mechanical, since I try to distribute my picks across sectors to avoid risk like the Vioxx meltdown or the Spitzer Insurance investigation. I haven't systemically started using F-Score yet, but I do look at the score and I will do additional research if it has a score of 5 or lower.

Footnote: I've tried to learn to be patient when finding a BI pick. I want it to be under its downside and stay there even after VL has released two new reports. In doing the Dow extended backtest, I've observed that VL consistently believes that stocks can turn around in 3 quarters. For example in early 80's VL kept thinking a turnaround was just around the corner for Bethelhem Steel even though the company lost money for 19 out of the next 23 quarters.

- Lee
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