Benchmark Investing Update Dec 31, 2023

This update is to Kenneth Lee’s Benchmark Investing picks based on the latest Monday’s data release. The S&P500 had a fantastic year with a +26.2% total return. During this latest period, there were three companies in the DJIA 30 that were below their downside price targets. They are CVX -7%, CRM -25%, and WBA -41%. However, none would fully qualify as a BI pick.

If you are interested in following along with this methodology against a broader range of stocks outside of the Dow30, these picks are posted in my Fool CAPS on a regular basis as trades occur, which can be found here

Market Valuation (Dow 30):
The DOW30 market is still OVERpriced according to the BI method of valuation by about 24%.
Downside: -44%
Upside: -17%

Long Buy Rules:
I am using the following TTD rules for Long position considerations:

  1. Year-over-Year EPS growth must > 10%, which are the next 4Q / current quarter + previous 3 quarters earnings results
  2. VL 3-5 Year price appreciation > average price appreciation of the market
  3. When calculating ROE and BV figures, ignore years when they are negative, but must have at least 7+ years of data to be included in final consideration
  4. Avoid erratic ROE ratios, that is where they are > 2std deviations = Curr ROE > (10 Year Avg + 2 * Std Dev)
  5. ROE and BV current figures must be updated by VL

Sell Rules:
I am using the following TTD rules to Sell Long positions:
Criteria (1 OR 2 OR 5, AND 3 AND 4):

  1. Price Appreciation < Market Average Appreciation
  2. Current Price > BI HiPrice
  3. Hold time > 365 days per cycle
  4. ROE & BV must be current
  5. No longer listed as a market average component

AllTooFoolish’s CAPS Portfolio:
If you are interested in seeing this method applied to a broader universe of stocks, follow my actively managed Benchmark Investing portfolio using Fool CAPS. I have been using this methodology exclusively on for many years with great success. In the Fool CAPS you will find my current dynamic portfolio and can see my most recent activities as they occur.
Notable activity in my CAPS dynamic BI portfolio over the past three months:
• CRM, BUY – Oct 6 2023, downside price target -43%.
• TAP, ADD – Oct 13 2023, downside price target -31%. Still meets all criteria.
• NFLX, ADD – Oct 27 2023, downside price target -40%. Still meets all criteria.
• DXC, SELL – Nov 3 2023, Sell all, no longer listed as a candidate.
• BK, BUY – Nov 3 2023, downside price target -23%.
• XRAY, BUY – Nov 10 2023, downside price target -36%.
• ALGN, BUY – Nov 10 2023, downside price target -23%.
• EOG, ADD – Nov 24 2023, downside price target -30%. Still meets all criteria.
• DVA, SELL – Nov 24 2023, sell all.

2023 Fixed BI Portfolio Holdings:
15 Holding in BI 2023 Portfolio: CAH, EOG, KMI, DVA, LKQ, NWL, TAP, BEN, IVZ, WBD, PYPL, PTC, DXC, AMZN, META
BI Portfolio Total Return Year-to-Date +20.6%
S&P 500 Total Return Year-to-Date +26.2%

The largest winner this year is META +184%
The biggest loser this year is NWL -30%

2024 Fixed BI Portfolio Holdings:
TBD – I will post an update soon as I am still currently working through this selection process.

My overall Fool CAPS Rating at the time of this post was 57.8 (+4.2 point since the previous update)
Score: 1847 (58%)
Accuracy: 46% (55%)

Disclosures and Useful Terms
VL Date is the date of the last summary report update from Valueline as indicated in the post’s subject line. All data sources from the Valueline Dow30 reports are made publicly available on their website.

Current Price is the closing price of the stock as reported by VL, which is usually a few days behind the date
of the time period mentioned in this posting’s subject line.

• ROE/BV Updated is an indication if the stock’s BV and ROE have been updated through the end of the Benchmark evaluation time frame.
• 10Yr Down is the 10 year downside price. The company must have at least 7 years of non-negative ROE data to qualify.
• 10Yr Down4Qs is the 10 year downside price averaged over the previous 4 quarter’s valuation price.
• 10Yr Up is the 10 year upside price. The company must have at least 7 years of non-negative ROE data to qualify.

Both upside and downside are calculated using the method outlined in TTD book. Also, a discussion of calculating the upside and downside can be found here:

• %<10Y Downside is the current price divided by the 10 Yr downside expressed as a percentage.
• EPS Future Delta is the projected growth in EPS for the next 4 quarters versus the last four reported quarters.
• I use the latest EPS data from the VL spreadsheet which are updated as soon as new earnings are reported.
• Div Yield is the current % dividend payout ratio per share.
• 3-5 Y Low/Hi Price Est. is the downside/upside price estimate which is calculated using the projections of Book Value and ROE as discussed in TTD.
• Min VL Price Appreciation is the expected change in price from current price to low end VL projected 3-5 year appreciation price.
• VL Price 18 Price Appreciate is the VL projected % change in price from the current price within the next 18 months.
• ROE >2STD is part of a margin of safety consideration, which is briefly discussed in TTD on pg 70-71.

I compare the current year’s ROE versus the last 10 years of ROE data. If the current ROE is greater than average (10 Yr ROE) + (2 * stdev(10 Yr ROE)), then this column is TRUE, else it is FALSE. This tells me that the stock’s ROE is much higher than its historic average and should therefore be avoided.


In 2024 I will be tracking and updating two different BI Portfolios.

The first portfolio (Managed) will be a continuation of the 2023 picks that have not yet indicated a Sell signal plus any picks that currently qualify as a Buy based on the latest results.

The second portfolio (Current) will only include picks that currently qualify based on the Buy rules and the latest results.

2024 BI Managed Portfolio includes:

2024 BI Current Portfolio will only include:

The final 2023 results were very close with BI generating a 20.2% return and the S&P500 26.2%. We will count that as a loss, but it was close in this very strong year.



Thanks AllTooFoolish for keeping the BI portfolio updated and reported on. I am following.


You are welcome, Ges. In case I decide to stop posting here, you will find me over here:

Post #1179 by AllTooFoolish on the Mechanical Investing board (


In case I decide to stop posting on the Fool site or they shut it down, you will find me over here:

Post #1179 by AllTooFoolish on the Mechanical Investing board (

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I’m on the shrew, too.

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