Keystone Veterans (KEV5)
by David Forrest (firstname.lastname@example.org)
Alexandria, VA (Jan. 15, 1999) -- As of Wednesday's close, seven of the ten screens we follow were beating the S&P 500, which is basically flat for the year. The top dawg is Relative Strength IBD, up almost 8% on the strength of Yahoo! (Nasdaq: YHOO), Visx (Nasdaq: VISX) and Nokia (NYSE: NOK.A). On a more ghoulish note, the Low PSR screen is off to a bloody start, down 8.31% Not a single stock in the Low PSR screen is logging a positive gain so far. Not one. Ugly.
On to new business, I promised to discuss the KEV5 this week. In short, the KEV5 is short for the Keystone Veterans 5. Kevin Louche (klouche), a member of the Fool community, came up with this screen. The logic behind it is that you want to buy the stocks that have been in the Keystone 10 ranking for the longest consecutive period. The screen works as follows:
1. Monthly, find the current Keystone 10 list. By this, Kevin means that you'd use the weekly Keystone rankings for the first week of any month. Past rankings are available here.
2. Rate each stock for how long, consecutively, it has appeared on the list in any position. Kevin calls this the "longevity rating."
3. Sort by descending longevity rating.
4. Pick the top 5.
5. Use low price to break ties.
Early indications are that this is a promising screen, but MChernick, inventor of the PEG 5 screen, cautions that perhaps using quarterly Keystone rankings instead of monthly may be the way to go to reduce volatility. Check out his post at Fool.com.
Keep your eyes peeled to our message boards as more information continues to flow in on the KEV5. People are backtesting as we speak and I'm sure in the next few months we'll have much better data on both the monthly and quarterly KEV 5.
Have a good weekend,
The Fool is hiring. Answer the call.