Analyzing Results

Analyzing Results - 2013/Y-6

There were eight companies in Group 8 (no 9) in 2013/Y-6:

EW
STZ
LRCX
ALXN
MU
MCHP
AME
DE

This is how they each fared from 2014 to 2020 - the year runs from April 1 to March 31st:

EW 92%, -58%, 5%, 48%, 41%, -1%

STZ 36%, 31%, 7%, 42%, -22%, -18%

LRCX 27%, 10%, 57%, 60%, -6%, 32%

ALXN 12%, -18%, -15%, -7%, 24%, -34%

MU 11%, -61%, 162%, 82%, -17%, 0

MCHP 5%, 3%, 56%, 27%, -4%, -21%

AME 1%, -4%, 9%, 42%, 12%, -14%

DE -2%, -9%, 45%, 45%, 24%, -34%

Six Year Return:

EW 69%
STZ 81%
LRCX 355%
ALXN -42%
MU 72%
MCHP 60%
AME 42%
DE 68%

What score did each of the above have in 2014/Y-5?

EW - 6
STZ - 8 (no 9)
LRCX - 4
ALXN - 8 (no 9)
MU - 6
MCHP - 5
AME - 6
DE -5

What score did each have in 2015/Y-4?

EW - 5
STZ -6
LRCX - 6
ALXN -5
MU - 6
MCHP - 2
AME - 3
DE - 1

What score did each have in 2016/Y-3?

EW - 8
STZ - 7
LRCX - 7
ALXN - 6
MU - 7
MCHP - 5
AME - 1
DE - 2

What score did each have in 2017/Y-2?

EW - 8
STZ - 4
LRCX - 8
ALXN - 6
MU - 8
MCHP - 7
AME - 5
DE - 6

What score did each have in 2018/Y-1?

EW - 4
STZ - 6
LRCX - 4
ALXN - 6
MU - 4
MCHP - 4
AME - 6
DE - 5

What score did each have in 2019/Y (pending)

EW
STZ
LRCX
ALXN
MU
MCHP
AME
DE

Observations:

I'm trying to find a guiding principal for this and obviously more testing needs to happen, but tentatively, something like this:

Take a position when the score is high, 8 or 9 or whatever. Could be seven sometimes too, I'll look into that later.

Hold the position unless one of the following occurs - negative return (or significant underperformance) coupled with a drop in quality of three of more points.

In that case DE would be gone after the first year. MU and AME would have been gone in the second.

The bottom line with this is we would have wanted to keep all of them except ALXN and maybe AME, given that from April 1, 2014 to April 1, 2020 the S&P 500 returned 48%. Regardless, however that group of 8 did much, much better than the S&P 500, returning 88%. So maybe it's just buy and hold once they get a top score?

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