Value Line’s Timeliness System – First Half, 2009
their own accounting of the results was published.
These numbers could not have been more embarrassing to Value Line.
Value Line tells its readers to buy only stocks ranked #1 & #2 and to sell them when their rankings drop to #3 or below. They also recommend avoiding all stocks ranked #4 and #5. Doing exactly the opposite would have been a much better move this year.
Here are the facts:
Results With Ranks Frozen
(Average % Change 12/31/08- 6/30/09)
Group 1 …………. 0.5%
Group 2 …………. 1.8%
Group 3 ………… 10.3%
Group 4 ………… 35.6%
Group 5 ………… 69.1%
DJIA …………….. -3.8%
S&P 500 ………… 1.8%
Wilshire 5000 …… 3.8%
Nasdaq Comp ….. 16.0%
Allowing For Changes in Rank Each Week
Group 1 ……. -8.2% ………….. -4.4%
Group 2 ……. -3.7% …………… 0.2%
Group 3 …….. 5.6% ………….. 13.0%
Group 4 …….. 27.0% ………… 49.6%
Group 5 …….. 36.9% ………… 98.9%
……………..Geometric ………Arithmetic
……………..Averaging ……… Averaging
Timeliness Ranks
Allowing For Changes in Rank Each Quarter
Group 1 ……………. -2.6%
Group 2 ……………. 0.3%
Group 3 ……………. 10.2%
Group 4 ……………. 44.3%
Group 5 ……………. 90.4%
…………………….. Arithmetic
…………………….. Averaging
Mechanical systems rarely work.
There is no substitute for solid (human) thought and analysis.
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