Mining the IBD 100, striking gold

[peanuts]

might be indicative of how important good technical analysis and chart interpretation is. also the timing of the trade. is the chart exhibiting the right signals at the proposed entry date. another point is the exit strategy. these might have all been winners a month ago so how long you hold them through some decent up times without taking the gains is important because you can give back big gains and end up losing on what should have been a winning position if held for a shorter time frame.

Do you have any comments on the ratings that IBD distributes? That is the basis of this experiment- to evaluate the rating system that IBD distributes to their subscribers.

I agree that technical analysis is important. But, and this is an important 'but', no technical analysis went into the experiment at all. Using TA may or may not have improved an investor's return. That's not the purpose of the experiment, however. The purpose was to take the 'best' IBD rated stocks at that particular time, according to the screen parameters, and blindly buy them at the time that their ratings were better than the rest of the stocks on the same list. The screen reduced the group of 100 stocks to only 6 that fit all of the parameters. ONLY 6! Those 6 had the highest ratings according to IBD at the start of the experiment- "better than the rest"

One would think that these highly rated stocks would perform well against the market, given the high rating they received. All 6 are currently priced below their respective prices at the beginning of the experiment.

What conclusions can / should be drawn from this information, if any?

I highly recommend reviewing the entirety of this thread- start at the beginning. It is not only entertaining, but highly informative.

[billyjoe]

Peanuts,
This thread wasn't very familiar to me and I just realized that I was hospitalized during much of it. Was heartened to see that a few of you actually missed me that's the conclusion I've drawn from this study.....just kidding. Actually IBD can be a good source of ideas for one just starting out, but also a dangerous one. It's easy to drop a few thousand $$$ before figuring out that a disciplined method of research can enable anyone to beat the IBD numbers. I've found that out the hard way. Set up , say 10 criteria that indicate an excellent stock for purchase and paper trade it for a predetermined time period, if it tanks try it again, change the criteria around until a profitable pattern emerges and it will eventually. You'll find that your picks using your homework techniques will beat most any list of recommendations from the so called experts.

--------------billyjoe