| 1. |
Once registered, what is the fastest way to get to the
Stock Picks List? |
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After you have registered, you have unlimited access to the Stock Picks
List free for the initial six-month trial period and then again for three
months after each paid subscription. Each time you want the Stock
Picks List, you must use the Request Form on the Website. The
Website does not allow you to bookmark the Stock Picks List webpage.
To get the Request Form, click the "Request Form" navigation
button at the top of any page, or bookmark the Request Form page and go
directly to it without entering the Website via the Home page.
If your computer accepts cookies, your personal information will
automatically load into the Request Form. If your computer does not
accept cookies or your downloaded cookie has expired, you will have to
re-input your personal information. Once you enter or update/verify
the personal information, click the Submit button on the Request Form to get
the Stock Picks List.
Tip: Check the "What's New?" table on the Home webpage and at
the top the Stock Picks List response page to see if there have been any
changes since your last visit.
New: With a simple RSS Feed link added to your RSS Reader,
you can receive automatically get update notices on your Internet
browser whenever there is a change made to the Stock Picks List. See
the Home Page for details.
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| 2. |
What about Enron? How can a Model using bad numbers make
good stock recommendations? |
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The Stock Picks List recommended Enron once, at $40.81 per share in
the end of Second Quarter 1997. Enron was deleted from the List
at the end of the Third Quarter 1997 and sold at $38.50 per share, a
rather minimal loss in light of what followed four years later.
Lucky? Not really. The Value Investing Model and the Stock Picks
List recommend stocks whose numbers are growing with steady
ratios and whose price movements are within historical
patterns. Management does not wake up one morning and
decide, "Well, today we're going to do a massive fraud on the
investing public." Bad accounting follows bad management and is a
slippery slope, usually pursued to sustain an unrealistic stock price. In
the case of Enron, the Model detected the "numbers
noise" of business results and/or stock prices when they first
went out of pattern, before fraud became a necessity to sustain it.
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| 3. |
How long have the Value Investing Model and Stock Picks List been
around? |
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The Model's algorithm (or set of mathematical formulas) was
developed and tested on historical stock market data for the years
1981-94. Since 1994, the Model has been successfully picking
stocks based on a unique and unchanged algorithm. In July 2000
in the midst of a major market downturn. The Stock
Picks List was first published on the Internet in October 2000. It was
available initially to friends and family, until early 2001 when numerous Web
portals and search engines found it.
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| 4. |
Why is the Stock Picks List so successful? What makes it
tick? |
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The success of the Stock Picks List is based on buying
stocks before other investors have recognized the
company's value and selling them when their underlying value is
recognized. The Value Investing Model anticipates the behavior of the
stock market, which eventually validates the "hidden value" of stocks
recognized by the Model. The efficiency of the Model and the success of
the Stock Picks List is due to three things:
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Good data. The term "earnings" has a
variety of recognized definitions for accounting and financial reporting
purposes. The Value Investing Model starts with its
own proprietary database of carefully selected earnings
data. The Model does not rely on company "pro
forma" income or other adjusted earnings data used by stock market
analysts and on-line financial databases.
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Artificial intelligence. The Model's
powerful algorithm (or set of mathematical formulas) successfully
imitates human intelligence and common sense when presented
with historical data, new market information and the changing
relationships between them, before the stock market absorbs
and reacts to the data. Like stock market behavior,
the Model is dynamic and "learns" from its experience, by detecting
when historical relationships have changed and by continuously
redefining data relationships based on market and company
performance.
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Opportunism. The efficiency of the stock
market is impacted by lots of inefficient behavior by other
investors: momentum buying and selling, crises of confidence
affecting individual companies and whole sectors, herd buying
of "hot" stocks or sectors, limited or slow analyst coverage of
many companies, and bull and bear markets generally. Each
of these events creates opportunities for value-based investing.
The success of the Stock Picks List is built in part on
the mistakes of others.
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| 5. |
Why is the Stock Picks List limited to only NYSE
companies? Why are there only US companies on the List? |
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The Model's database is limited to companies listed on the New York
Stock Exchange ("NYSE"), whose minimum capitalization and other
listing requirements are more rigorous than NASDAQ and other stock
exchanges. The Model purposely excludes stocks listed on non-US
exchanges and companies that do not report their earnings in US Dollars, in
order to limit the Model's exposure to currency-exchange
fluctuations. Individual NYSE-listed companies are, of course, exposed to
some foreign-exchange risk to the extent that their revenues and earnings come
from non-US Dollar economies.
The Model's database consciously excludes non-NYSE companies and non-US
companies in order to assure continued robust performance results of the Stock
Picks List. In the opinion of the Author, the current pool of
NYSE-listed companies is large enough to find a diversified group of
undervalued stocks. Adding companies that meet less stringent
listing requirements and whose earnings are subject to greater foreign-exchange
risk, might adversely impact the performance results of the Stock Picks List.
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