My screens offer nothing with both the necessary fundamentals and relative strength. Therefore there is nothing to buy: the market is in charge. It only remains to lower the multiples and raise the quality of the overall portfolio by a few sales, and to harvest some losses for tax purposes as they arise. And take a holiday! I will see you again when the dust settles and the atmosphere becomes clear. Or at least clearer.
Interesting. I didn’t take you to be a relative strength kind of investor. How do you use relative strength? Do you require a minimum level? If so, what is that level. Any other requirements. Does it have to be increasing? I am just curious. I have never really used relative strength before but would be interested to hear how others use it.
You are right in that sense, I am very much a quant and find ‘technical analysis’ interesting only in occasionally telling me how other people might behave. However, I like to have the market at my back, i.e. I make no attempt to be a ‘value’ investor, just a GARP investor.
I prefer never to invest unless RS has been > 50 say, for 1, 3 and 6 months and preferably 12 and really would expect the more recent figures to be much higher.
My screens are awfully prone to throwing up value traps. RS is one measure among others which eliminates them during DD.
I like the logic. It always seems a risk when you find what appears to be an undervalued stock, that it will continue to get more undervalued. You may lose out on some winners but the protection of at least the whole market not disagreeing with you seems like a worthwhile characteristic to watch for. I will have to pay a little more attention to RS.