Given FusionIQs use of technicals and fundamentals, I was wondering how your screens compare with the IBD 100 and IBD 200. For example, what would be the FusionIQ scores for a typical IBD 100 list during a bull market? Are most of the IBD 100 stocks highly ranked by FusionIQ? Are there important stocks that IBD misses? How important is relative strength in FusionIQ’s screens?

Thanks,

Paul

Our own back-testing — verified by a different outside tester (a fractal analyst) — showed that the returns are monotonic. The stocks ranked 90 or higher do better than the 80-90, which do better than 70-80, etc.

The total market (all stocks) averaged around 70 . Stocks below that raking tend to underperform, and stocks above tend to out-perform. Note I say tend, because a few sub-70 stocks out performed while a few above 70 stocks underperformed. But the average return of the group.

One caveat: the 0-10 stocks were an odd cohort — those that did not go out of business (!) tended to do well as deep value stocks.

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You can use the ValueEngine tool you referenced as a good way to find cheap stocks. We always recommend using other disciplines if they work for you. However, we don’t like huge drawdowns. So we have built into this tool a risk management/capital preservation algorithm.

Other tools like value engine do not. See their VE Standard 20 — Long Strategy draw down during the crash — it was a horrific 68.85%; VE Star 20 — Long Strategy was down -70.42%

Thanks in advance.