On the right sidebar you will find a link to the 100 Top Stocks list I generate several time a week. I truthfully cannot tell you the algorithm that I use to find these stocks as I last updated it about three years ago and have not looked at it since. In general, the concept is to find the best fundamental stocks that have the highest relative strength and momentum. The list has worked well for me for me over the years.
There are several fundamental calculations I use, but the main effort is to find the best Year over Year growth stocks with a ROE over 15. The problem with fundamentals are they tell us what already happened and that information is already in the price. The relative strength tells us what will happen in the next few months. The stocks are ranked based on momentum and RS. Each day the bottom 5-10 can change based on price action. The stocks near the top of the list will remain in that position for months.
I once played portfolio manage to a fictitious 10 million dollar block of money. By only using the stocks from this list and then picking the best cup-with-handle formations, I significantly beat the market over a two year period. I continue to use these stocks in my CAPS portfolio (although not exclusively).
This list is also a great tool for determining general market conditions. When most/all the stocks have nice bases then the market is probably ready to go up. If most/all the stocks have made 20% plus moves then the market is probably overbought for several weeks/months.
Post Modified: July 31st, 2008 at 11:46 pm
Tags: About · Cup with Handle · Growth Stocks1 Comment
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[...] few weeks ago I posted about using the Top 100 Growth Stocks list on the right sidebar for finding potential buys when the [...]