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Jim,

Congrats on yet another impressive looking screen - at least as far as backtesting goes. However, I'm getting slightly lost in all the modifications that have been discussed but essentially you're still talking about:
- ROE for the larger firms (whether they have a Timeliness ranking on VL or just the 1700 largest firms.) Sort on ROE and take the best X% of them where X is 25-30% or so depending on the tuning desired.
- Then calculate cash less debt and sort on this metric and buy the top 40.
- Rinse and repeat every two months, say, on a HTD45 basis.

Result - 4-5% in xs of the S&P500 in a twenty year backtest.

Some variations:-
1 Require a dividend as the initial step. Result - no meaningful change in return.
2 Calculate the net cash/market cap and sort on that basis rather than the absolute net cash figure. Results in a very healthy extra bump of ~3%pa to return. But is this also on the basis of 20HTD30 rather than 40HTD45 (based on post 227813)?
3 More up to date ROE for latest quarter appears to help returns slightly.
4 VL seems to exclude companies with a negative book value but your screen of those with negative ROE (on a technicality), positive earnings, negative book produced an even better excess return. No way to incorporate that pool of businesses as well?

There's no real timeliness in the selection of investable companies. Is this deliberate? A function of your original goal that this is intended as a form of retirement plan S&P substitute, perhaps. Hence if we're about to hit the mother of all depressions and the equity markets plummet then will the screen selections follow but at a slower clip? If these companies are to survive while the others don't then maybe that's still a good thing albeit probably stomach-churning?

For safety, rather than using the net cash metric have you thought about VL's safety metric? Note I'm not familiar with Value Line's data so unsure as to whether their safety value is useful in this situation.

Any clarifications/corrections of my thoughts welcome.

Thanks
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