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Jim,
Several months ago I attended a talk by Louis Navellier re his Market
Portfolio Theory ("MPT") of selecting stocks. Basically, he applies a
number of technical and fundamental screens based solely on statistical
computer methods (as in minicomputers) designed to identify "what makes
stocks move." I think that the only subjective input involved is how to
balance the quantity of each stock in a portfolio to minimize volatility of
the portfolio.
Anyway, at that time, Navellier's objective, statistical analysis showed
that "sponsorship" in the form of broker recommendations, and earnings
estimate upgrades, were among the most important fundamental factors shared
by the best performing stocks during the last six months. This could
change, but for right now, it suggests that buying on
upgrades/recommendations is not a bad approach. Of course, if you are
prescient, you could get in before a series of upgrades/recommendations.
I'm not. <g>
Are you trying to get in on the ground floor, before any brokers get interested?
TomJ
At 07:23 PM 6/21/97 UT, you wrote:
>Tom,
> I wasn't really talking about the fundamentals of the stock, but instead
>the investment story. For example, "brokers have to be coining money at these
>high volume levels" or "farm equipment manufacturers will do well because of
>the high grain prices". I realize that's not the sponsorship you are talking
>about, but instead is one of the factors along with a stocks fundamentals that
>might cause a big brokerage firm to sponsor the stock.
> Back to your thesis. I agree that stocks can move after big firm sponsor
>them. No matter what causes the move, I like to try to get in ahead of the
>sponsorship <G>.
>
>
>-----Original Message-----
>From: Tom
>Sent: Friday, June 20, 1997 9:41 PM
>To: metastock-list@xxxxxxxxxxxxx
>Subject: Re: Sponsorship
>
>Jim:
>
>You may be confusing "sponsorship" with good quality fundamental analysis by
>the quality investment firms.
>
>I don't think that we can tell whether it is the "sponsorship" that causes
>certain stocks to rise, or instead, the quality of the company that is being
>sponsored.
>
>At bottom, though, either way -- you win!
>
>Good luck.
>
>
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