Investment strategies (3)

Many methods are available for choosing the right stock at the lowest price. No one of them makes all the details available : we know or can guess some of the parameters (as said in a previous post ) but the right combinatino is not available.

Haugen uses close to 70 parameters , Greenblatt only two ones . Both of them , like others claim to have achieved overperformances vs. the normal stock indices. And no one gives away the full detail of the formula . Even in that case , there would be some concerns about the results and the cost of trying the copy them : the databases you utililize can change the results and the costs of the databee , they way they treat the exceptions . At the end the same Greenblatt warns that you cannot be sure that the results achieved in the past can be replicated in the future . 

In his book , Greenblatt suggests , if the readers wants to "do it himself" , to use 2 indicators ("P/E" and "ROA") and how to invest . Some readers are trying to simulate the results with his methods : the outcomes I've seen are not so exciting .

I guess you should use the method , mixing it with a look at the graph of each stock you are going to choose .