Now here's a feature of the system that has always troubled me. We have a screaming bull move going on and the Pitbull Merit Ranking is telling us to buy the least extended, highest EPS ranked stocks in the market.
If you are conversant with O'Neill's "M" analysis, these are clearly laggards, not leaders. The market turned back in late April, and the CANLSLIM leaders have made and are making huge moves. It's really too late to be buying stocks to benefit from this move, and to buy laggards has always seemed counterproductive. Buy, hey, that's what the system says....
On the other hand, if you had really been buying the PB candidates as the market was turning, you bought some of the new leadership and would be full of stocks, and not be buying anything at this point. Of course, it is rare that the PB is going to get you into any high flying CANLSIM stocks (although there are some terrific exceptions), but good solid leaders would be in your portfolio throughout this move.
I'm going to keep a close watch on your list of "laggards", John. These 60+ Merit Rankings should prove interesting, and well worth watching.
Thanks. |
