Investing For Growth
Investing For Growth
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by Robert Sheard (MF DowMan) LEXINGTON, Ky. (Mar. 21) -- As amazing as it may seem, not a single story crossed the wires about the ten IFG stocks today, not even about Intel (which seems to show up in every story related in any way to technology).
So, I'll steal the chance to act the part of tour guide for the new area. Many of you have asked about the newer variations of IFG since the primer has been published. As of now, there are three that we're following regularly in the IFG folder (in the section of our boards called Let's Talk Investment Approaches).
The first is Mike Buckley's YPEG33 approach. Mike (MF Buck) decided to see what would happen if you threw a fundamental price valuation into the mix. For this version, you run a YPEG price target for each of the stocks on the IFG Focus List and then include only those that have at least 33% growth room above their current prices. You probably won't find ten stocks this way, but you may get some that are cheap.
The second variation is Todd Gunerman's. Todd developed a series of screens using the Telescan commercial software in order to emulate Value Line's criteria for their Timeliness rankings, an essential component of the Investing For Growth approach. Todd's method bypasses Value Line completely and tries to create a comparable approach to IFG by screening for the individual stock characteristics directly.
The third approach is my own variation on the original model, the IFG/RS (Relative Strength). The big complaint some people had with the original model is that Value Line's rankings aren't sensitive enough to a stock which started to collapse (the two which come to mind are U.S. Surgical in 1992 and Micron Technology over the last 4 months). The original model held these stocks way too long, giving back massive gains.
So, instead of using the Industry Ranking as the final screen (to get the momentum component of the model in there), the IFG/RS approach substitutes the Relative Strength ranking from Investor's Business Daily. You simply choose the ten IFG stocks with the highest RS rankings and then proceed as usual, updating every quarter.
We don't have a lot of data on the new variations yet, but each shows promise as an improvement over the original model. Join us in the IFG folder for weekly updates and continuous discussion of these variations. Fool on! |
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INVESTING FOR GROWTH (3/21/96)
Day Week Month Year History
IFG -0.55% -0.14% -0.83% 1.13% 4014.28%
DJIA -0.50% 0.75% 2.58% 9.96% 578.89%
S&P 500 -0.12% 1.21% 1.37% 5.40% 509.45%
NASDAQ -0.18% 0.02% -0.02% 4.53% 643.00%
Rec'd # Security In At Now Change
10/10/94 9586 Micron Tech 16.63 32.63 96.24%
1/5/96 3387 Sterling Soft 52.75 69.38 31.52%
4/8/95 5828 ADC Telecom 28.38 36.50 28.63%
4/8/95 3794 Intel 43.56 55.88 28.26%
1/5/96 3183 Comp Assoc 56.13 70.38 25.39%
1/5/96 4168 Oracle 42.88 48.63 13.41%
1/5/96 2627 Comp Sci 68.00 70.88 4.23%
7/8/95 3866 Tellabs 48.00 49.00 2.08%
1/5/96 4229 Adobe Sys 42.25 34.25 -18.93%
7/8/95 3776 Applied Mat 49.13 36.31 -26.08%
Rec'd # Security Cost Value Change
10/10/94 9586 Micron Tech $159,367.25 $312,743.25 $153,376.00
1/5/96 3387 Sterling Soft $178,664.25 $234,973.13 $56,308.88
4/8/95 5828 ADC Telecom $165,369.50 $212,722.00 $47,352.50
4/8/95 3794 Intel $165,276.13 $211,989.75 $46,713.63
1/5/96 3183 Comp Assoc $178,645.88 $224,003.63 $45,357.75
1/5/96 4168 Oracle $178,703.00 $202,669.00 $23,966.00
1/5/96 2627 Comp Sci $178,636.00 $186,188.63 $7,552.63
7/8/95 3866 Tellabs $185,568.00 $189,434.00 $3,866.00
1/5/96 4229 Adobe Sys $178,675.25 $144,843.25 $(33,832.00)
7/8/95 3776 Applied Mat $185,496.00 $137,116.00 $(48,380.00)
CASH $458.86
TOTAL $2,057,141.49
Transmitted: 3/21/96
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