How will new IBD100 format effect featured stocks?

[billyjoe]

I see the start of a "boxed IBD 100" portfolio.

billyjoe

[mrmarket]

It is from Jan 1.
They are all from Fri close each week to Fri close next week, and then just add up the gain and loss percentages.
The indexes come close, but are not exact by doing it this way but it is the best way to compare them to the 100.
Since the 100 changes stocks each week, it is the easiest way to see how the 100 is doing.

So what you are saying is that the performance of a stock is not included prior to its listing in the IBD 100?

[drutzen]

Correct,
That is for my calculations, I am not sure how IBD does theirs.
I also do not figure in gap up or downs on Monday opening for this.

[jiesen]

I'd bet that the gap-ups on Mondays from all the IBDers buying on the recs significantly reduces the performance advantage that the IBD 100 has over the S&P.

[New-born baby]

S&P: what is so great about it?

I'd bet that the gap-ups on Mondays from all the IBDers buying on the recs significantly reduces the performance advantage that the IBD 100 has over the S&P.

Is IBD hot or what?!!??!!! The S&P is up only 12% from April, 1998 until February, 2005. IF (I said, "*EEEEEEEEEEFFFFFFF*") IBD has outperformed the S&P, well, they are doing much better than I thought. That's incredible news.

I think Mr. Market needs to call a solumn assembly and give some special award to Wm. O'Neil. What do you think? Some special tee-shirt charting recent performances of the #1 rated IBD picks? Maybe Webs would do the home surgery thing on his ears. I don't know, but it needs to be real special. And we'd all attend, wouldn't we?

[IIC]

I see the start of a "boxed IBD 100" portfolio.

billyjoe

Good Luck Billy...

Let's see, In Monday's IBD they claim that the IBD 100 has outperformed the
S & P 500 during the period 5/2/03 - 4/28/05...71.2% to 22.9%. Problem is that they will never tell anyone how they calculate these ludicrous claims.

So, I've decided to take on the task of calculating their performance myself. And I'll even reveal my "Super Secret" calculation formula...And I trust that you will keep it to yourself.

OK, here are the results:

The BOXED IBD 100's in the 4/25/05 edition are listed below. I am listing the opening price on Monday, the closing price on Friday and the % change.

AMHC $40.15...$37.35...-6.97%
BRG $40.20...$39.05...-2.68%
SRX $66.00...$65.34...-1.00%
CVH $66.78...$68.43...+2.47%

Overall, the average loss was -2.045%. But if you calculate that you bot 1 share of each, then the overall loss was -1.39%. The reason for this is that the lower priced one's were the worst performers.

Now, what about the S & P 500? It opened at 1153.46 and closed at 1156.85...a gain of +0.29%.

Let's just assume that this was a typical week...Annuallized the S & P 500 would be +15.08% and the IBD 100 boxes will end up -72.28% if you use the 1 share of each thing. But I like to buy equal $$$ amounts of everything...so my IBD 100 box portfolio would end up -106.80% in a year...WAIT, that's impossible!!!

But I'll admit...it was only one week...let's see how the IBD 100 boxes fare against the market next week...WAIT, that's impossible AGAIN...none of them are boxed!!!...Maybe they gave up...LOL

[scifos]

Overall, the average loss was -2.045%. But if you calculate that you bot 1 share of each, then the overall loss was -1.39%. The reason for this is that the lower priced one's were the worst performers.

I don't think that it is fair to weight each stock based on its stock price, which is what happens if you buy 1 share of each. The -2.045% average is more accurate in my opinion.

[drutzen]

I only have data back to Oct 10, 2003, but checking the ibd site, they have their one year 100 return at 10.45, my data for the 100 comes in at 10.69, so I guess I am pretty close.
From this, it is fair to say that they are $ weighted and taken from Friday close to Friday close averages.
From Oct 10 2003, ibd 100 return is 37.57%, with s&p at 12.64%

[jiesen]

I only have data back to Oct 10, 2003, but checking the ibd site, they have their one year 100 return at 10.45, my data for the 100 comes in at 10.69, so I guess I am pretty close.
From this, it is fair to say that they are $ weighted and taken from Friday close to Friday close averages.
From Oct 10 2003, ibd 100 return is 37.57%, with s&p at 12.64%

Of course using Friday close for the buy would not give you an accurate representation of following the IBD model, since nobody can go back and buy at Friday's close after the IBD 100 are announced. Using a Monday opening price would be a lot closer to what you'd actually end up getting.

[drutzen]

This is very true, unless of course you are privy to the information and buy them afterhours on Friday to get a closer price. wink wink, nod nod, know what I mean know what I mean.

Actually, for my stuff, I wasn't about to look up 100 stocks opening prices to plug in, but I do have the top 10's opening for awhile, I will check to see the difference using the Monday's opening on the top 10 from the times that I have them to see how big of an impact they would have made. My guess is not much.

One item that I did do just now is to see what the return would be if you bought the entire 100 list from Aug 26 2003 and held all stocks until now, getting split data and merger data where I could. dividends are not included. you would have had a 22% return, but there were some way wild swings.

[IIC]

Of course using Friday close for the buy would not give you an accurate representation of following the IBD model, since nobody can go back and buy at Friday's close after the IBD 100 are announced. Using a Monday opening price would be a lot closer to what you'd actually end up getting.

Yes...I agree, although you may not be able to get it at the open...but you certainly can't go back in time. Does the appearance of a stock actually give it a boost?

At the end of each I am posting the % change using the Friday 4/22 close:

AMHC $40.15...$37.35...-6.97%.......-3.2%
BRG $40.20...$39.05...-2.68%.........-2.4%
SRX $66.00...$65.34...-1.00%.........+1.7%
CVH $66.78...$68.43...+2.47%........+2.47%

Quite a difference...nice how figures can be twisted for marketing purposes. The avg. loss is only -0.36% and the loss on the 1 sh of each deal is
-0.26%...The S & P 500 gain increases to +0.41%.

BTW...The IIC 100 has beat the S & P 500 by 376% since October...I use this really "Cool" formula to calculate it...I set limit orders at 5% above the previous Friday's close...but they only trigger if the volume is at least 50% above the ADV when the limit is reached...Of course, I report the results based on the original Friday close ...LOL...Go ahead...Prove me wrong!!!

[drutzen]

wow, what difference, so much more than I would have guessed.

Oct 2003 to end of year. ibd top 10, 48%, if using Monday open price 20%
total ibd 100 18.8%, incorporating only top 10 Monday open 16%

Jan 2004 to end of year ibd top 10, 57%, if using Monday open price, 2%
total ibd 100, 26%, incorporating only the top 10 Monday open 21%

I would say the top 10 is more volatile, or lately vomitile, then the rest of the list, but I would suspect that the returns would be diminished further.

For 2004, if you would have bought the top 10 at Monday open and sell at Monday close, you would have been up 19%

[drutzen]

Something to think about also,
You would need the opening price on Monday for only those stocks that are new to the list for that week, the others you would already own. However you would have to dump the stocks falling off, and hopefully those are not gapping down.

Since the Monday prices affected the returns so dramatically, and with a 20% return just buying at the opening and selling the closing on Monday for the top 10, here is a new scenario to consider.

For the most part the top 10 stays pretty consistent, buy the top 10 on Friday at the close and sell Monday at the close. This would have given you a 75% return for 2004.
Much better than holding the top 10 through the week, and gives you a lot of golf, gardening and fishing time.
For that matter, just make it almost a permanent vacation, putting in orders once a week after the list comes out. Buy and sell the changes on market open, and sell all on market close. Wouldn't life be grand.

I am just wondering how much of a difference the stocks moving out of and on to the list would make.
Plus, all bets are off for 2005, the top 10 has been reeeeeeally ugly losing 28% so far this year.

[IIC]

I have not done this for a while...I just can't watch everything...But my suggestion is to simply use this list as a tool...Keep an eye on the new adds.

I was really just playing a little game with the IBD Box thing...I think that they are w/i 5% of the p/p or something like that??? I'm too lazy to check. But the point is...they are just to watch...If they don't hit the p/p on vol ...don't buy.

That is why I have greatly reduced the # of watchlists I post...they were never intended as recommendations...only those that meet certain criteria...it is up to the individual to buy at the right point...if that point ever happens....I prefer to call it the FLASH POINT!!!

All I want to do is catch short term Breakouts...It is a tough job...But somebody's gotta try it.