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How do you guys choose from the list of 25? The book says to pick the top 5-7 stocks from the list every two months or so. What does it mean by 'top'? The web-site doesn't put them in order of their rankings. Anyway, there would be no point generating a list of 25 or more if you're always going to pick the top nine at most.

Or is the list larger because you should pick ones you don't own yet? How different are the lists generally two months down the line? And a year?

Another reason I can see why the list is larger is that it doesn't seem to be all that rare for a stock to have become delisted.

I'd probably be tempted to start with the ones with the highest earnings yield. And then I think I'd avoid the ones with stupidly high PE. Greenblatt already advises to exclude the ones with stupidly low PE. Next I exclude the ones unavailable from my broker. The last point is a bit arbitrary, as they would add it upon request. I have to do this on a regular basis already with quite a few hidden gems.

So my list of 5 becomes: DLX MTEX PWEI PNCL VPHM

Notice that I excluded a few for other reasons. PLAY I already own, SCC is being acquired close to its current price and FDG has been on my watch-list for a while already but I keep seeing problems with it.

I'd be interested what people think of this way of selecting and I'd be interrested to hear how other people do it.

Mark

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