I've seen several (dated) posts on people trying to combine the magic formula with Piotroski's F-Score and MSN's Stockscouter, however I have not been able to track down results people have had using this method. Has anyone seen their results improve running the MFI stocks through the additional screens? I envision doing the following (taken from a post on this board, although I can't seem to find it again):1. MFI screen (from http://www.magicdiligence.com/tools/mfiscreens.php)2. Piotroski F-score greater then 6 (from http://www.gurufocus.com)3. Check MSN Stockscouter score, if greater then 8, buy the stock4. If MSN score less then 8, put stock on watch list5. Continue to recheck MSN score 6. Recheck score indefinately until it increases or falls off the MFI websiteRunning through that algorithm provides the following list:This list is sorted first by F-Score (high->low), then by MSN score(high->low), then by Market Cap(low->high).Ticker F-Score MSNPDLI 7 10DLX 7 9BKE 6 10CA 6 10LLL 6 9INTC 6 9SCLN 6 8JCOM 6 8KLAC 6 8FRX 6 8CSCO 6 8Welcome additional thoughts.Pat
2. Piotroski F-score greater then 6 (from http://www.gurufocus.com)3. Check MSN Stockscouter score, if greater then 8, buy the stockYour list implies Piotroski greater than or equal than 6 and MSN StockScounter greater than or equal than 8.I'm always a little leery about MSN StockScouter, when their "top rated" list of stocks doesn't contain all 10-rated stocks.
Several years back I was running some long term experiments that did just that (combine Piotroski + MF, CAPS + MF, MSN + MF, Stocks 360 + MF etc etc) and over longer periods of time, and in every single case, pure random selections had better outcomes. A good example is the MFI CAPS page here (which I've voluntarily managed for over 5 years now): http://caps.fool.com/player/trackjgreenblatt.aspx Total Score: 785.06 (88th percentile) and average pick score of +3.91 above the S&P. - Not too shabby for a mechanical screen.ZD
That isn't too bad at all for a mechanical screen. Ok, so trying to combine MFI with other screens hasn't really produced better results. What about trying to account for Graham's valuation and margin of safety with MFI? I know MFI says to hold onto the stocks for approx 1 year, but what if you only held on until you were close to the valuation of the stock within your margin of safety? This means you could sell it well before a year or hang onto it for longer?Thanks for doing the tracker, certainly good to see this in action over the last 5 years.
What about trying to account for Graham's valuation and margin of safety with MFI? I know MFI says to hold onto the stocks for approx 1 year, but what if you only held on until you were close to the valuation of the stock within your margin of safety?What you wrote assumes you have the ability and skill to a. evaluate what a given company's earning will be at a given point in the future and b. that you'll be able to approximate with reasonable accuracy the fair value of that company based on those earnings and c. that the market will eventually agree with your valuation. If you (like Graham, Buffett, Greenblatt and others) have these abilities, then you should absolutely sell when your position reached your target valuation (if not - just stick to the mechanical screen). ZD
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