Tom,
We have dual intents for the use of this data. As a stock selection system for Buy N Hold (well this is a trading strategy, but very infrequent trading) I suspect that what we might want to do is to buy when the stock hits the list, and hold on thru the ride to Timeliness=1, and sell when Timeliness drops back to 2. Nope, this would not capture ALL of the gain, but it would grab enough to make nearly any investor smile all thru the night. In a taxable account, gains on sales are highly probable to be capital gains, since we are likely to hold for 2 or more years for this scenario to play out.
As a fellow AIMer, I see this as a valuable tool to select strong growth companies, that also display much of the volatility that we seek to capture with AIM.
But back to the original point of your question, yes, I believe you should track the Timeliness=5 stocks for the long term. This will show us all the power of the PIC idea.
The question that arises, when was that last time that either CSCO or INTC appeared on the PIC list? It has to have been over two years ago. I doubt we have the resources to do this sort of backtesting. The gains from that time to when both fell from Timeliness=1 should be AWESOME!!! I, for one, believe that BOTH these stocks will regain Timeliness=1 ratings sometime in the next 2-4 years. Anyone who buys them now, with Timeliness=5, and hangs on all the way to Timeliness=1 will be very pleased. The ride will be rocky, and the temptation to take profits will be strong, but the rewards for patience will be EXTREME.
Robert |
