Hi Sfsecurity,
I am not looking at bookvalue, but the discounted values of the cashflow.
Then you calculate a value and you compare the stock price versus that value. If you use 0.4 then use 1 slot, if 0.3 use 2.5 slot etc.
This is an example, you could scale differently.
Currently i am not using equal weight, but do it the way Lichello described it in the book. When you have a buy, you can buy any stock, Lichello tries to buy a new stock. The Kelly idea can help to determine how much to buy of stock A and how much of stock B.
Best Regards,K
