Screen Potential Candidate EP II

S&P Index Slugs (SAPI Slugs)

This simple but effective value search presents a pure yield play. It is similar but potentially superior to the better-known “Dogs of the Dow” search we just received because it draws from a wider pool of large-cap stocks and includes a secondary financial-strength overlay.
The strategy calls for buying the top 20 stocks from the result set of this search, ranked by dividend yield. These should be held for 1 year and then rescreened and rebalanced. It can be combined with Momentum Growth search to create a balanced 30-stock, 1-year portfolio.

The theory of using more than one screen is to allow for greater diversification within the portfolio. This way, if one particular screening method is sorely out of favor, the other may help to avoid massive losses. Suffice it to say that these screens should be used as initial idea generators, not as absolute methodologies.

Criteria We Used:

1. Must be stocks in S&P 500 Index.
2. Dividend Yield as high as possible.
3. Current Ratio higher than Industry Average.
4. D/E Ratio lower then Industry Average.
5. Market Cap larger than 300 millions.

New iPhone 4G Concept

This beautiful concept, inspired by the curves and tapering of the Macbook Air coupled with the touch's back, is even better than the cool Macbook-inspired iPhone 4G we featured at the beginning of the month.

The thing that excites me most about these concepts, however, is not the aesthetic aspect of it. It's the the front camera and the fact that people seem to be excited about getting videoconferencing on the iPhone. Specially about the idea of interacting with desktop videoconferencing software on both the PC and the Mac. This is a must for the videochat feature to be really useful, and personally I think it's one of the reasons it hasn't been done by Apple before.

Wise Man Don't Let Go

"Any fool can carry on, but only the wise man knows how to shorten sail."

By Joseph Conrad, A Polish-born British novelist

Screen Potential Candidate EP I

Price-to-Sales for Large-Cap Stocks

“The price-to-sales ratio is the king of all the value factors.” This individual value ratio has been the best performer throughout history. In fact, research shows that using this one criterion helped investors beat the markets more than with any other value ratio, and did so more consistently.

The Large-Cap Price-to-Sales screen will provide you with an excellent list of value stocks that can be combined with other ideas. For the most part, the outcome of the query will reveal those companies that have a high level of sales but have not seen their stock price appreciate commensurately.

The implication is that stocks here have lower downside potential, as they have a respectable stream of revenue that may eventually be rewarded. This is a far cry from those growth stocks with high prices and low sales. While the upside for those is great, the downside is usually even greater.

Criteria We Used:

1. Must be stocks in S&P 500 Index.
2. Market Cap larger than 2 billions or the bigger the better.
3. P/S Ratio as low as possible

While simple, the results may provide you with an interesting list of candidates to think about researching further. Most of the results will represent value-oriented stocks by the very nature of the criteria used. Some, on the other hand, may actually be “diamonds in the rough.”

Visual Guide to Financial Crisis

!!!! Click to Enlarge WOW !!!!

Insight Mind

"As a solid rock is not shaken by a strong gale, so wise persons remain unaffected by praise or censure."

By Buddha, A spiritual teacher in the north eastern region of the Indian subcontinent who founded Buddhism

January Are We There Yet ?

What Does January Effect Mean ?

A January Effect is a general increase in stock prices during the month of January. This rally is generally attributed to an increase in buying, which follows the drop in price that typically happens in December when investors, seeking to create tax losses to offset capital gains, prompt a sell-off.

The January effect is said to affect small caps more than mid or large caps. This historical trend, however, has been less pronounced in recent years because the markets have adjusted for it. Another reason the January effect is now considered less important is that more people are using tax-sheltered retirement plans and therefore have no reason to sell at the end of the year for a tax loss.

Over time several articles have mentioned the January Affect which is based on how the market finishes the month of January. For example if January finishes with a negative return then the market will end down for the year and vice versa. We went back and looked at the Dow for the period from 1915 through 2007 to see what the actual results have been.

The table below shows that when the Dow has had a positive January Return, 50 out of 61 cases (82%) were followed by a positive Yearly Return. On the other hand when the Dow had a negative return in the month of January 21 out of 32 cases (66%) ended up with a negative Yearly Return.

January Affect (1915-2007)

Jan (+ Gain)
Yearly Return (+) = 50 (82%)
Yearly Return (-) = 11 (18%)

Jan (- Gain)
Yearly Return (+) = 11 (34%)
Yearly Return (-) = 21 (66%)

Based on these results the January Affect has been more accurate when the Dow finishes the month of January with a positive return versus a negative return at least going back to 1915.