Sentiment and Signal Stock Score
About 4 months ago I began playing the stock market. It took a long time to get a trading account open, and in the meantime I started looking at health stocks. I figured with an aging population, there's going to be money to be made there.
I picked a few stocks, bought them, and I was off. Shortly there after I discovered the Sentiment and Signal stock scores. Here is a exert of what I learned about them:
Consider stocks that have a Sentiment Stockscore of 60 or higher. Focus on the charts of stocks that have a Signal Stockscore of 80 or higher. When these two criteria are met, there may be a high probability opportunity in the market.
There was more, but in general, low stock scores were not good. So, I looked at the stock scores of my choices. Not one was over maybe 35, but most were twenty something, or even less. I looked further at what I had rejected, and wow, they had great stock scores, 60, 70, 90, absolutely great. And I thought, I'd never buy these stocks, but I thought to watch them, and I set up a portfolio which I called "Rejects July 20th, 2006."
My reject portfolio's 4 month performance?
ABT up 0.39%
AGN up 2.39%
CI up 15.18%
HCA up 4.43%
JNJ up 7.06%
KMI up 2.93%
LLY down 5.33%
SIE down 32.71%
Overall, the portfolio I set up is down 0.75%
And well, I'm up 22%. I'm not in the same stocks I started with, but I don't think I've bought a single stock that would be recommended through these scores.
In my humble opinion, toss these indicators in the garbage. Read the financials.
1 comment :
This is so close to a year now and I've continued to monitor the performance of these stocks.
The only one on this list that beat the market is CI.
The portfolio I put the stocks in is up 8.17%. I set the portfolio up to include trading costs.
I am Canadian, so actually I would never realize that 8.17% because of currency declines. I think currency declines would wipe out practically the whole gain. I believe the exchange rate was around 1.12 and now it is 1.05, so about 7% would be lost to currency changes.
Anyway, I didn't like these stocks when I looked at their financial reports, I thought they were poor investments and the stock signal and sentiment score were saying they were good investments. I stand by my original assessment.
Right now I'm up just over 170%.
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