Frequently Asked Questions

General Questions
In order to reduce my list of stocks that make it through the screen, which of the IBD ratings would you increase in order to reduce the list of passing stock to something manageable?

Q: There are times when I have limited time (don't we all) and wondered... in order to reduce my list of stocks that make it through the screen, which of the IBD ratings would you increase in order to reduce the list to something manageable?

I have visited the web site of Fred Richards, who did the forward for your excellent book, and he sets the ratings extremely high (I realize he uses a different approach) with the EPS and RS ratings at 95 and the composite rating at 90. This often leaves just 20 stocks or so, a very short list, although he may miss some great opportunities.

 

A: It's very simple to only look at stocks with a 90 Composite Rating or higher. When we developed the Composite Rating at O'Neil when I was there, it was intended to picks up stocks that were in fact showing leadership characteristics but had anomalies in their EPS or RS ratings. Depending on how many stocks you want to use, Bill O'Neil used to tell me that all you had to do was look at the stocks with 95 Composite Rating or higher. We tend to work off a list that has 85 or higher, but it keeps the names to a very high quality short list either way.


Published: Oct 11 2010