In-depth Information & Backtesting

Screening Methodology

5 stock screens are used, and 9-12 stocks are bought at a given time. This is an amalgamation of screening methodologies that generate consistent, profitable results even during bear markets. The following graphs simulate the results of weekly reallocations and rebalancing of the selected stocks.

Hedged Portfolio Results 2001 - 2025

Percentage Growth

Hedged Portfolio Results 2001 - 2025

Dollar Compound Growth

Disclaimer on Dollar Compound Backtests

While the backtests show dollar compounding into the hundreds of billions, this, however, is unrealistic due to the inherent limitations in trading large sums of capital. Slippage when swapping equities will become an issue starting with low liquidity stocks.

When you are trading in the millions in micro/small-cap stocks, you begin to own large sums of that company. As a rule, I'll be buying no more than 1% of a stock's market cap. And no more than what would result in a 1% price change that occurs from slippage. The strategy will be changed over time for optimal performance according to the current capital invested.

Total Portfolio Gains

Yearly Percentage Change

Yearly Average = 75%

Lowest = 29% (2004)

Highest = 179% (2020)

Monthly Percentage Change

Monthly Average = 5.6%

Lowest = -10% (July 2011)

Highest = 52% (July 2020)

Downside Volatility graph

Lowest = -11.9% (09/16/2011)

During this week, the model is in 100% buy status. Often, many of the spikes in downside volatility are during times of bullish bias. However, the Hedged Model weeds out the majority of periods where volatility would be significantly higher than without hedging.

This model rarely exceeds a -10% downside. Which occurs only a few other times.

Stock Backtesting 2007 - 2025

Logarithmic graph

Stock Backtesting 2007 - 2025

Linear graph

Stock backtests split between 2001 - 2006 & 2007 - 2025

The Stock backtests are split between these two periods due to the inability to backtest the Piotroski F-Score as part of the stock screens. Regardless of this component missing in the 2001 - 2006 tests, they still performed phenomenally, especially through the dot-com crash period.

The furthest back I can conduct any buy screen backtests is to March of 2001.

Stock Backtesting 2001 - 2006

Logarithmic graph

Stock Backtesting 2001 - 2006

Linear graph

2004 Worst Performing Year

29% Growth

Years such as 2004 consist of a pattern of periods of stagnation and mixed market performance that include minor market dips. These years don't offer many opportunities for stock growth, typically occurring after high-growth periods. Though often high growth is resumed after such periods.

Notable Bear Market year performance

Bear Market & Crash periods

This is a selection of periods of bear market and crash activity. 2001-2003, 2007-2009, 2018-2019, 2020-2022 As can be observed in these charts, they are not periods to be feared. Rather, they are great opportunities for value and growth, which are plentiful during such periods. The highest performing years are following these bear markets/crashes in 2003 (126%), 2009 (134%), 2020 (179%).