The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Mechanical Investing

URL:  http://boards.fool.com/i-use-the-spreadsheet-in-two-ways-one-i-am-one-30537896.aspx

Subject:  Re: performance of screens Date:  2/12/2013  9:50 AM
Author:  FlyingCircus Number:  241550 of 251808

I use the spreadsheet in two ways. One, I am one of the few who does have a portion of my MI allocation assigned to "what's working lately". Other portions are assigned to reliably backtested and high quality post-discovery screens - of which there are a very manageable number to choose from. What's working lately is not that much "considerably more effort" to figure out. You set up a spreadsheet with the return and deviation comparison metrics and rankings columns of your choice, copy and paste in the 5 or 10 stock values periodically, review the rankings and decide.

Realizing that this approach is an experiment in style-chasing, it's not something I would recommend using for an entire portfolio. But I argue there's a place for it, instead of stubbornly sticking with a screen or an approach with a good backtest that has very visibly underperformed for some time.

The second way is as a post-discovery or backtest validation tool. A screen that pops to the top of those rankings that has a low quality history can quickly be checked for reliability or deviation from normal. (like Beta or Option_A). Also, one could analyze the consistency of screen performance rankings over time.

FC
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us