The San Francisco Chronicle has a fascinating article about Reuters' contrarian stock screen on investor.retuers.com. Shockingly, the simple screen has returned an astounding 1349% since Janurary 2000. Granted, this was an easy start date for a contrarian portfolio, but still the returns are incredible:
As of Sept. 9, Contrarian Opportunities still led the field, but this time with an astonishing 1,349 percent cumulative return. By the way, Reuters computes the returns assuming that each portfolio is rebalanced monthly, meaning that a new portfolio is selected every month.
Gerstein divides his screens into four categories, Growth, Value, Quality and Sentiment. The Growth and Value categories each contain five screens emulating different variations of these relatively well-known selection strategies. Contrarian Opportunities is in the value category.
The Quality category includes four screens that look for stocks with strong fundamental characteristics. The Sentiment category includes five screens that look for stocks that are "in favor" based on factors such as insider buying or analysts' ratings.
Lesser-Known Stocks from the Sentiment category was the second-best performing screen, with a 337 percent cumulative return. A value screen, Favored Value Plays, was a close third, with a 330 percent return.
As was the case last year, each of Gerstein's screens has not only been profitable since its inception, every screen has soundly trounced both the S&P 500 and the Nasdaq.
Speechless.
(Found via Infectious Greed)
Comments