Perverse Investment Candidates(PIC)
list began January 1st of 2001.
YEAR AIM/PIC Gain/Loss R.O.C.A.R.* SPY Index
2001 +14.8% +19.9% - 9.2%
2002 -15.8% -20.2% -23.0%
2003 +40.5% +57.7% +26.4%
2004 + 8.5% +16.47% + 8.6%
2005 + nil + nil + 3.0%
2006 + 9.2% +12.8% +13.8%
2007 YTD + 3.0% + 4.5% + 8.4%
*ROCAR = Return On Average Capital At Risk
How would you like to choose investments that had
"annual growth rate of sales, cash flow, earnings,
dividends and book value that together have averaged 13% or
more over the last 10 years and be expected to average at
least 13% in the coming 3-5 years."?
This list is derived from Value Line's "Highest Growth
Stocks" list (page 39). It's my feeling that these
stocks would make great possibilities for investing using
simple timing strategy of buying when they're Timeliness
#5 and selling when they get to Timeliness #1.
Many of these stocks also have exhibited other traits that
would make them good AIM Management candidates. Here's how
AIM has managed these stocks since they came to the list:
http://www.aim-users.com/pic.htm
(More info on AIM:
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15592776 )
How important is it that we wait until the "Highest Growth Stocks" reach a "Timeliness" of #5? Look at the graphic below. As you can see, all the time CSCO was part of the 1999 and 2000 BUBBLE, it was rated HIGHER than #5. In October of 2000 with the
price down nearly 38% it was still ranked #2 in Timeliness. It
was ONLY AFTER the stock had lost about 75% of its SHARE Price
that Value Line decided that it was
[b]"#5, Lowest Timeliness For The Next Twelve Months."
Now look below at CSCO's history since joining my PIC list. Please note that it's performed adequately in a terrible market and that AIM has done a reasonably good job of maintaining value and limiting risk.
(Disclaimer - Some of the stocks shown are
owned by me in my personal account.)
Always study any company carefully before
actually investing.
Best regards,
Tom
