MrMarket Question about CMTL and r-squared ratings.

[bigred970]

MrMarket. I have to say you have been an inspiration to my investing career.

My question to you involves the time series regression analysis you use to pick a final stock. I know the closer to 1 the better, but what is the cut off point. For example, your pick of CMTL has an rsquared value of 0.77. Is this good, or do you want something in the .8 or higher range. Also while doing my own search using your methods I found several other stocks with higher r2 values. Is there scenarios that you would buy a stock with a lower r2 value and pass up a higher one on your list?

Anyone else feel free to chime in.

[mrmarket]

MrMarket. I have to say you have been an inspiration to my investing career.

My question to you involves the time series regression analysis you use to pick a final stock. I know the closer to 1 the better, but what is the cut off point. For example, your pick of CMTL has an rsquared value of 0.77. Is this good, or do you want something in the .8 or higher range. Also while doing my own search using your methods I found several other stocks with higher r2 values. Is there scenarios that you would buy a stock with a lower r2 value and pass up a higher one on your list?

Anyone else feel free to chime in.

Hi Red,

I rank all of the stocks in the database and assign values based on how they do relative to each other. R^2 is an important criteria but not the most important.

Karel did a nice write up in this forum basically explaining in a connect the dot fashion how my stock picking model works.