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I am curious if the CAPS ratings of stock reflect a normal distribution with the vast majority of stocks rated 2-4 stars with small numbers at the extremes. Is this true or is there a biase to the ratings? Ditto as it relates to "all stars" ratings?

Thanks,
Carolyn
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I am curious if the CAPS ratings of stock reflect a normal distribution with the vast majority of stocks rated 2-4 stars with small numbers at the extremes. Is this true or is there a biase to the ratings? Ditto as it relates to "all stars" ratings?

Todd will be by shortly to correct me if I'm wrong, but I believe the stocks are evenly divided between the 5 stars with 20% of rated stocks in each group.

The all stars are the top 20% (anyone with a rating over 80). The higher ranked people contribute more to the score, so 4 and 5 star rankings may have a higher percentage of all stars rating the stock outperform.

Hope that helps,
Brian
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Brian's got it.

Each CAPS-rated stock is assigned a relative numerical rating (only viewable at Fool HQ) from which the star rating is derived. So a stock with a numerical score of 18.73 would be a 1-star since it fits in the first quintile; conversely, a stock rated 83.27 would be a five-star since it's in the fifth quintile. Each quintile has basically the same number of stocks.

Foolish best,

Todd Wenning
PRO analyst
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