Over the past couple months on and off i've been working on my own valuation model based purely on the financial statements of companies. obviously there are way more elements to a company then just the financials that make it a good 'value' investment. But I just wanted to see how the top value investments my model picks out compares to the All ords. I've put together the following types of portfolios to test my model and see how it goes.
Portfolio 1) An equally weighted portfolio of my top 10 identified value investments
Portfolio 2) A portfolio weighted by the value ratings assigned to my top 10 stocks value investments
Portfolio 3) A 50/50 portfolio with half to cash and the other half to the top 10 value stocks equally wieghted
Portfolio 4) Personally selected stocks from my initial criteria in whatever wieghting i see fit
All of these were spread across $100,000. I made all the fake purchases at the closing prices of the 6th of May. Will be updating the portfolios quarterly (i.e. re-adjusting the wieghtings by the value rankings etc). I've also added test portfolios as if they had been bought on 1 July last year as well. I've done the value ratings by the last financial years financial statements and also estimated current financial year statements.
The outcome for the test ones from 1 July last year were all positive, 2 of the portfolios by a considerable margin. Just wondering if anyone else has tried this sort of thing or something similar. Looking for people interested in equations and technical analysis as i've got some further ideas around the portfolios etc but just looking to discuss as well.
Welcome any replies and/or questions. Have to run right now, if I think of anything further ill post it here shortly.