A New Way to Look at Equities
Seven measurements
From: Peter Lundstedt, CIO, Equity Portfolio Strategist, Greenwich Asset Management Group, LLC
I use a new way of looking at stocks to invest equity portfolio's and it's done inside a Separately Managed Institutional Account held with an independent custodian, such as Schwab Institutional, with real time client monitoring in what I call a Client Supervised Investment Account.
My goal is to provide a superior equity portfolio construction methodology. Greenwich Asset Management Group, LLC does not custody assets and works with limited trading authority only. Send for more information to: gamgllc@earthlink.net or visit www.gamgllc.com
Index
1. Seven measurements - A new way to look at stocks
1. Seven measurements - A new way to look at stocks
I use seven measurements when searching for stocks to add to a portfolio. Very few stocks have all seven measurements, at the same time. These measurements reflect a stocks' strength on a fundamental level first and then a technical level. These are companies which rank in the top 15% on all seven levels as measured by leading financial information providers and represent the financial health and overall demand by stock buyers. We then give each stock a score; (a higher score equals higher 'confidence' in the stocks held in the portfolio).
Our way of making money is to buy good stocks with a high score and, depending on the market, hold them for 3 to 5 years, and sell the ones that don't follow their long term trend line. Add 20 years of experience and you have a workable system which we think can benefit almost any portfolio. Call us to see more information if you think this philosophy would fit with your style of investing:
2. What I can do for you
I can show you how each stock you hold really ranks; which stocks to keep and which stocks not to hold. I can show you how the top half of your portfolio has performed compared to the bottom half. I can show you how your top 10 stocks performed and then the top 15 and the top 20. I feel I can position Institutional equity portfolios in a better way by holding only the highest ranked issues in a broadly diversified portfolio while at the same time being client specific. So, if you need an energy portfolio, I can create an evenly weighted portfolio of 30 - 50 of the highest ranked energy stocks. If you have an asset allocation model, I can create an evenly weighted portfolio of the highest ranked stocks in each sector chosen. If you need to 'reconstruct' a health care portfolio, I can create an evenly weighted portfolio of 30 - 50 of the highest ranked health care stocks, and so on. Here is how I do it:
I use seven measurements when searching for stocks to add to or to 'reconstruct' a portfolio. These measurements reflect a stocks' strength on a fundamental level first and then a technical level. These are companies which rank in the top 15% on all seven levels as measured by leading financial information providers and represent the financial health and overall demand 'by stock buyers'. I then give each stock a score; (a higher score = higher confidence). Currently, a perfect score would be a 598. I found that the higher the score, the fewer the number of stocks were available. I like to limit the portfolio to stocks with a minimum score of 470 to 490 which I feel gives you a higher probability of success. You could imagine ranking all 500 stocks in the S&P 500 and creating an evenly weighted portfolio with just the top 50 or top 100 stocks with the highest rank.
For example, with a $100 million dollar separately managed account held at Schwab Institutional, I would most likely divide it into 30 - 50 evenly weighted segments and then fill each compartment with higher score, stock selections. I learned this style of portfolio management from the former manager of the now $140 billion NY State Common retirement fund, who traded actual client accounts thru me for five years using this technique. While at the State, he had 12 money managers under him. He saw how each one did over time, which systems worked and which to avoid. He settled upon a sector rotation model that averaged 25% per year. I've added the seven measurements above to the formula, among other important criteria, to create a uniquely diversified Institutional quality evenly weighted equity investment process. I operate under the theoretical assumption that, it doesn't matter what you own; what really matters is what other people are buying and how diversified you want to be.
If this concept fits with you, call or email for more information:
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