I received an email this week asking me to explain the following Custom Field: ((CI*RV*RS*Value)/ActualPrice).
I responded by saying, “Since each of the terms in the numerator becomes more favorable as it increases in value, their product becomes more favorable as it increases in Value. Dividing the numerator by Actual Price means that one could use it to find stocks with the highest (CI*RV*RS*Value) having the lowest prices.
Having said this, I decided to try it. I ran a search as of February 4, 2013 using “Top VST-Vector Stocks,” sorted by ((CI*RV*RS*Value)/Actual Price) Desc. I looked at a 1-Yr graph of the top 20 stocks and it was a mixed bag. There are several big winners, but some serious losers too. So how could we make this Custom Field better?
First of all, it mixes apples and oranges. By that I mean it combines indicators based on a scale of 0.00 to 2.00 with a parameter, Value; that can go well above 2.00. This single parameter could conceivably dominate the Custom Field. Besides, Value was already represented in the Custom Field via RV, so I would not use it. Let’s see how well ((CI*RV*RS)/ActualPrice) Desc works compared to the original Custom Field.
As a baseline, I ran the search cited above on 12/18/12, the date of our most recent C/Up signal. A QuickTest of the top twenty 20 stocks from 12/18/12 to 02/08/13 showed a gain of 8.99% with 14 Winners and 6 Losers. The VVC showed a gain of 5.56%. That’s not bad, but let’s see if we can do better. A QuickTest of the same search, “Top VST-Vector Stocks,” sorted by the revised Custom Field, ((CI*RV*RS)/ActualPrice) Desc, showed a gain of 13.33% with 18 Winners and 2 Losers. This was better.
In looking at the stock graphs, they didn’t look bad, but adding RT to CI is a colossal combination, like Batman and Robin! So I added RT to the numerator. This Custom Field, i.e., ((CI*RV*RS*RT)/ActualPrice) Desc, showed a gain of 14.16% with 18 Winners and 2 Losers. Now that’s not bad! But holy mackerel Andy, if I multiply RV*RS*RT, I might as well use VST. So let’s try sorting by ((CI*VST)/ Actual Price) Desc. Oops! We got a gain of only 13.10% with 18 winners and 2 Losers. How did that happen? I see I got a great big loser in this crop, so let’s make one adjustment and try sorting by ((CI+VST)/Actual Price) Desc. I got a gain of 24.24%, but with only 17 Winners. How did that happen? I don’t know. There must be Something Magic About VST.
Being a returning subscriber, (temporary, until proven further) having read the above, can one just use VST, in a rising market, of course, and…. come close to 24.24%? As you say, “holy mackerel Andy”, … if this works, then why not just use VST, …. as the guiding light?….. JB
This entry was posted in Vectorvest on Feb.8, 2013 by Dr. Bart Diliddo, “Something magic about VST”
Would soneone clerify this formula for me?, (CI+VST)/ACTUAL PRICE)DESC. Thank you so much.