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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: freeus who wrote (1906)	9/17/2000 11:24:03 PM
From: StockHawk	Read Replies (1) of 65232

>>Monthly mutual fund report from IBD: Here are the top buys, from the point of total money invested, of the top rated mutual funds this month<< freeus, we must keep in mind the method IBD uses to compile its list. The list contains ONLY those companies that are top ranked on IBD's EPS and RS ratings. For the most part companies have to rank above 90 on each. Since only 10% of the stocks rank above 90 on EPS and only 10% rank above 90 on RS that means that the large majority of stocks are not even eligible to appear on this list. That's why, for example, a company like AMK makes the list even though only one mutual fund invested in it, and that fund invested less than $50,000. On the other hand a stock like QCOM could not make the list even if 500 funds invested 100 billion dollars, because its RS (relative strength) rating is low. The list is interesting, but it would be much more useful if IBD simply ranked the companies with the largest buys regardless of their IBD rankings. Since they do not do this, it is important to be careful of the conclusions we draw. StockHawk

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