OK, Ive referenced current data against historical data and have a list of 200 possible buys. What now?
If you’re a massive institution, buy them all. More realistically, though, we can’t say with certainty. Our intuition is to use some sort of complementary technique to screen the list further…use fundamentals, industry trends, charts, whatever. Another approach would be to look at the list of buys for stocks you’re familiar and comfortable with. The reason we don’t attempt to narrow our buy possibilities down to, say, 10 stocks, is because we lose statistical significance in the process. That is, further screening on our part could actually be counterproductive, so it’s up to you to take the next step. Of course, our list of possible buys isn’t necessarily everyone’s “starting point”. Maybe you already have a list of 20 fundamentally sound stocks, and you’re looking for a way to whittle down the list even further. We think referencing our current data against our historical data would be a great way to do that whittling. In cases where seasonality favors particular industry groups, o
