Enter the fundamental metric information such as P/E on any 100 stocks into a scoring system. If the top 25% of the stocks perform a lot better than the rest in 6 months consistently, then it is a good scoring system.
I have been using my own scoring system for years. It sums up the individual scores for selected fundamental metrics. When the total passes a certain number, evaluate the stock further for potential purchase. This scoring system has been updated many times for refinements and adapting to the changing market conditions. All metric information can be obtained from web sites.
Many companies and academic projects must have worked on this kind of stock scoring systems. However, few if any can prove their systems work consistently.
I may have found the reason why it does not work consistently. The fundamental metrics change from different market conditions. To illustrate, the current market conditions may favor value while some other conditions favor growth. I monitor the performances of all the fundamental metrics periodically and make changes accordingly. Hence, I call my scoring system Adaptive Stock Scoring System (do not use the acronym?).
In writing this book, I switched from IBM to Apple as the sole example in this book as IBM scored very low. Apple scored very high. This book was published in 06/2013. The performances of the two stocks from 06/03/2013 to 06/03/2014: IBM -12%, Apple 41% and SPY (for comparison) 17%.
Last update: 09/2015 Size: 160 pages (6*9).
