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Author: Zeelotes Big red star, 1000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 252575  
Subject: Re: MIVLI: MI VL Index Date: 12/14/2012 2:26 PM
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Dr. Bob wrote:
That would get at the VL part but would miss the MI part: Are the screens adding value? Is your particular selection of screens doing better or worse than the average MI screen?

My personal take on this question of an MI Value Line Index is that no one in his right mind would invest in an index containing all of the MI screens developed and shared here.

In a sense, everyone cherry picks what it is that they are going to use to invest in. Hopefully, that cherry picking, as Jim has pointed out in this thread is:

http://boards.fool.com/blending-at-a-whole-new-level-updated...

If you're going to pick stocks mechanically and use backtests to
determine what methods work well, it makes sense to pick your screens
mechanically and use backtests to determine which of those work well.


It is foolishness in my view to judge the effectiveness of the work that has been done here by comparing it to an index of all screens tracked. Part of the work done on this board has been related to the wisdom of using blends. In the early years attempts were made to create a blend and they were called a Screen of Screens (SOS). Later this morphed into using the Excel Solver. Hopefully, my posts back in 2007 raised this to a whole new level, where a backtest of screen selection guided the selection of the screens to use.

Here is Dr. Bob's table including the returns from a blend:

 MI   VLI  SPY  SIPI  Blend
2007 27 5 36 6.64%
2008 -58 -38 -30 1.84%
2009 30 29 21 61.40%
2010 22 15 35 25.00%
2011 -7 2 5 7.93%

CAGR 0 2 13 21.10%

NOTE: The 2007 return for the blend is from the PEAK in 2007 so it is not an apples to apples comparison.
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