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No. of Recommendations: 2
harmy,

Re: my earlier post:
http://boards.fool.com/Message.asp?mid=17672224

It's more than a useful method for finding undervalued stocks.
It's actually a mechanical investing strategy.

If you used this method last year, putting $10,000 in each of the twenty stocks, your results would look like the table below. It assumes you bought in August 2001, and sold at the end of July 2002. Cost is the cost in August 2001. value is the value at the end of July 2002:

ASX Company Name Price First Year 15 X First Exp 1Yr Shares Cost Value Gain
Code Aug-01Jul-02 EPS Fcst Yr EPS Growth
CLI Challenger International Limited 3.342 2.55 66.5 9.975 72.8% 2,992 $ 9,999.48 $ 7,629.60 -23.7%
GNS Gunns Limited 3.725 6.72 65.5 9.825 62.4% 2,684 $ 9,998.05 $ 18,036.48 80.4%
ORI Orica Limited 4.465 9.01 77.7 11.655 61.6% 2,239 $ 9,996.72 $ 20,173.39 101.8%
RIC Ridley Corporation Limited 0.704 1.31 10.9 1.635 52.4% 14,198 $ 9,999.67 $ 18,599.38 86.0%
MTT Metcash Trading Limited 1.122 2.2 15.8 2.370 45.3% 8,909 $ 9,999.90 $ 19,599.80 96.0%
ION Ion Limited 1.186 2.65 16.1 2.415 42.7% 8,433 $ 9,998.86 $ 22,347.45 123.5%
NUF Nufarm Limited 2.691 3.35 35.3 5.295 40.3% 3,716 $ 9,998.88 $ 12,448.60 24.5%
COA Coates Hire Limited 0.869 2.24 11.3 1.695 39.6% 11,504 $ 9,999.60 $ 25,768.96 157.7%
OST OneSteel Limited 0.996 1.47 12.3 1.845 36.1% 10,040 $ 9,999.19 $ 14,758.80 47.6%
AHD Amalgamated Holdings Limited 1.827 2.45 21.1 3.165 31.6% 5,473 $ 9,999.14 $ 13,408.85 34.1%
GMF Goodman Fielder Ltd 1.111 1.64 12.5 1.875 29.9% 9,000 $ 10,000.00 $ 14,760.00 47.6%
BRS Bristile Limited 2.146 2.55 24.1 3.615 29.8% 4,658 $ 9,998.23 $ 11,877.90 18.8%
CRG Crane Group Limited 7.179 8.4 79.5 11.925 28.9% 1,392 $ 9,993.85 $ 11,692.80 17.0%
BLD Boral Limited 2.979 3.89 32.8 4.920 28.5% 3,357 $ 9,999.03 $ 13,058.73 30.6%
GNC Graincorp Limited 10.491 10.25 112.9 16.935 27.1% 953 $ 9,998.21 $ 9,768.25 -2.3%
SSX Smorgon Steel Group Limited 1.013 1.08 10.8 1.620 26.5% 9,870 $ 9,999.62 $ 10,659.60 6.6%
PPX PaperlinX Limited 3.828 4.95 40.4 6.060 25.8% 2,612 $ 9,999.54 $ 12,929.40 29.3%
ADZ Adsteam Marine Limited 2.092 2.05 22 3.300 25.6% 4,780 $ 9,998.98 $ 9,799.00 -2.0%
ALZ Australand Holdings Limited 1.571 1.43 16.5 2.475 25.5% 6,363 $ 9,999.00 $ 9,099.09 -9.0%
ABC Adelaide Brighton Limited 0.704 0.74 7.3 1.095 24.7% 14,202 $ 9,999.51 $ 10,509.48 5.1%
Totals $199,975.43 $286,925.56 43.5%

Average 43.48%
Best 157.70%
Worst -23.70%
Standard Dev 48.78%

Returns of 43.5% are not too shabby. Isn't this supposed to be the worst bear market in living memory? Maybe that depends on how long you've been living, and how bad your memory is.

This year's list is:
 PORTFOLIO -  AUG 2002
Code Shares heldPurchase pricePurchase valuePurchase date
CLI 3839 $2.60 $9,997.70 1/08/2002
CTX 6162 $1.62 $9,998.74 1/08/2002
ALZ 7131 $1.40 $9,999.70 1/08/2002
DOW 16366 $0.61 $9,999.56 1/08/2002
NUF 2910 $3.43 $9,997.60 1/08/2002
CLO 12175 $0.82 $9,999.80 1/08/2002
FCL 9076 $1.10 $9,999.90 1/08/2002
TWR 2735 $3.65 $9,999.05 1/08/2002
ABC 13676 $0.73 $9,999.78 1/08/2002
SSX 9244 $1.08 $9,999.82 1/08/2002
GSP 6885 $1.45 $9,999.55 1/08/2002
OSH 14061 $0.71 $9,999.61 1/08/2002
ADZ 4643 $2.15 $9,998.75 1/08/2002
CSR 1599 $6.24 $9,994.06 1/08/2002
GNS 1512 $6.60 $9,995.50 1/08/2002
RIC 7563 $1.32 $9,999.46 1/08/2002
OST 6611 $1.51 $9,998.91 1/08/2002
QBE 1459 $6.84 $9,995.86 1/08/2002
TEL 2411 $4.14 $9,997.84 1/08/2002
BRS 3884 $2.57 $9,998.18 1/08/2002
TOTAL PORTFOLIO $199,969.37

It will be interesting to see how it performs.
I intend to keep the board updated, probably monthly.

Chris

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