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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: - with a K who wrote (25839)	1/27/2007 3:30:05 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78740

-with a K. Yes, thanks for the reminder. I've forgotten how surprised I too was when I saw those good results for the O'Neil screen. Somewhat disappointed and discouraged as well. My whole investment search is to seek out what works and could work for the average person. I presume that a basis for that is the advice/technique/style that good investors in the past have used over many decades and who have been kind enough to have shared their processes with us. (Buffett/Graham/Dreman etc.) The O'Neil story is not clear to me. I ask myself, how does this guy make his money? Like the inhabitants of Graham and Doddsville, i.e. through managing public mutual funds? By being known as a long-time successful manager of people's money - ala Schloss, Dreman, Steinhardt, or maybe one of the new generation Burry, Tilson, Pabrish, Grommit (-g-)? Perhaps I'm only looking in my own narrow circle of knowledge, but it just seems to me the O'Neil money is coming from newspaper sales. Not from investing prowess. ========================================= I'm a recent sign up for AAII on a trial subscription. From their website, I now see the year-to-date (as of 12/29/06) results of their screens of various investing strategies. Among their conclusions: "This year, the leading strategy in terms of one-year performance is the value-oriented “Enterprising Investor” methodology of Benjamin Graham with a year-to-date return of 56.1%, the largest single-year gain of any approach since 2004." (Nine stocks were in that screen,e.g. BL, PKX, BLG, FDP, giving high volatility) O'Neil's "CAN SLIM revised 3rd Edition", at -3.7%, was among the four poorest performers of the 58 different screens. The Graham Defensive Investor screen gained 27%. The "O'Neil's CAN SLIM" gained 29.5%, and the "IBD Stable 70" gained 7%. Imo, there was a heck of a scary difference between the two CAN SLIM approaches in '06. With one you're a winner; yet if you were in the other, you'd be losing in '06. Rather than concentrate on one year performance,here are the screen results for top performers over AAII total history of these screens (since about 1998). AAII reports: O'Shaughnessy--Tiny Titans (Growth & Value): 27.8% Zweig (Growth & Value): 17.8% Est Rev Up 5% (Specialty): 39.7% O'Neil's CAN SLIM (Growth): 22.1% Neff (Value): 16.1% AAII's conclusion: "When looking at those strategies that have achieved long-term success, several common factors are apparent: * Low multiples (price-earnings, price-to-book value, etc.), more on a relative rather than an absolute basis; * An emphasis on consistency of growth in earnings, sales, or dividends; * Strong financials; * Price momentum; * Upward earnings revisions." ---- Just seems like such a dangerous and scary way to invest. (CAN SLIM) Maybe for some speculative money, but for a large portion of one's core portfolio... doesn't seem sensible to me. And not necessary to achieve good long-term performance (imo). Searching the CAN SLIM threads/descriptors on SI, I'd say the O'Neil methodolgy doesn't seem to have hooked and kept many SI people.