Posts filed under “Valuation”


The Real Money column I mentioned Friday has been moved to the (free) The side: Nine Stocks for Playing the Long Side Safely

Before you yell "Capitulation!," understand that this was in response to client requests. I continue to have
concerns about a laundry list of economic problems: inflation, slowing
growth, slow job creation, rising interest rates, the drag from

What led to this research and stock selection was a repeated request from research clients, managed asset accounts, and institutional traders, who have all asked some variation of this question:

"I am afraid this market is overvalued, over-extended, and
overdue for a major correction — but I want to play from the long side
(variation: I cannot afford to fall behind my benchmark). How can I
participate in a way that is relatively safe, but still allows me

The response we crafted was to quantitatively screen stocks for these characteristics:

1) Identify strong sectors with good money flow;

2) Screen for stocks with the best technical and fundamental potential;
3) Look for stocks within those sectors with desirable risk/reward characteristics;
4) Find stocks that are near good entry points;
5) Avoid the "runaway momentum" names;
6) Look for stop-loss protection that is a reasonable percentage downside away.

The column identifies nine firms, with entries, targets, and stop losses.

The stocks and sectors I picked, however, are more likely to outperform on a
relative (as well as on an absolute) basis, especially if the economy
slows further or slips into a recession. Our goal was to identify those stocks
that will participate in the upside, but at much lower levels of risk.


There is a video discussion here:




Nine Stocks for Playing the Long Side Safely
6/8/2007 4:44 PM EDT

Category: Economy, Investing, Markets, Quantitative, Valuation

Category: Economy, Investing, Markets, Quantitative, Valuation

Cheapest Stocks in Two Decades based on Flawed Fed Model

Category: Data Analysis, Earnings, Investing, Markets, Psychology, Valuation

Small or Large Cap?

Category: Markets, Valuation

Earnings Streak Snapped; How Pricey Are Stocks?

Category: Earnings, Investing, Markets, Psychology, Valuation

Countries GDP as US States

Fascinating stuff: Carl Størmer points us to this amazing map of the United States. Each state’s economic output is analogized to another country’s GDP. click for larger chart: Notable omissions: U.K., Japan, Germany, China, Russia, Italy. I cannot vouch for the precision of this, but by eyeball, it looks about right. Carl adds: “When seeing…Read More

Category: Currency, Economy, Finance, Valuation

Not Expensive vs cheap

Category: Data Analysis, Financial Press, Investing, RR&A, Valuation

Stock Prices Adjusted for Inflation

Category: Data Analysis, Technical Analysis, Valuation