Newsletter Login



Need help logging in?

New Subscriber?
Start Here!

Q & A

Has the Forecasts ever considered concentrating on a Focus List consisting of only those stocks with Overall ratings of 97 to 100?...

Read More from Q&A

Tools & Resources

Real Questions from Real Subscribers

Q: Has the Forecasts ever considered concentrating on a Focus List consisting of only those stocks with Overall ratings of 97 to 100?

A: Dear Subscriber,

We have run a number of studies on the returns of ultra-high Quadrix scorers, and the results are as you'd expect. The higher the score, the better the average return. However, running a Focus List using only the highest scorers is impractical for at least three reasons:

1) Setting a higher minimum score limits the number of stocks in our research pool. This could drive us to concentrate our portfolio in industries with a lot of high-scoring companies. Such a lack of diversification tends to increase risk.

2) Quadrix scores change from week to week. Many of our stocks earn extremely high scores when we recommend them, but a decline from 97 to 92 or 87 is not uncommon, and may not reflect a serious enough change to warrant a downgrade. Imposing a lower limit on Overall scores would require us to make frequent sells, sometimes dumping stocks we like quite a bit.

3) While the top scorers average higher returns than other stocks, not all of them deliver on the scores' promise. We rely heavily on Quadrix to cull the herd, but follow up with individual company analysis because no quantitative system captures every factor affecting a stock's price. In other words, there are plenty of high-scoring stocks out there we don’t want to own.

Thanks for your interest,

Bob Sweet, CFA
Managing Editor, Dow Theory Forecasts

More Investment Newsletters and Services

Drip Investor

DRIP Investor — how you can buy dividend-paying stocks without a broker.

Visit us at DRIP Investor, your source for dividend reinvestment plans.

Lazy Investor

The Lazy Investor — free weekly e-letter that delivers market updates and stock market information via email.

Visit us at The Lazy Investor, our free investment newsletter.

Horizon Investment

Horizon — registered investment advisor seeks to provide investors at all stages the ability to build, preserve and enjoy wealth.

Visit us at Horizon Investment Services to get started in an investment program that's right for you.


Upside — discovers today's small and midcap stocks poised to be tomorrow's Blue Chip leaders.

Visit us at Upside, your guide to the best buys in small and midcap stocks.

Current Hotline

Wednesday, October 26, 2016

It may seem hard to believe after years of worse-than-forecast economic growth

Read More from the Hotline

Stock Spotlight

Lear Shares Keep Foot On The Gas

Wednesday, October 26, 2016

This year is shaping up to be a tale of two halves for Lear ($114; LEA), a supplier of automotive seats (77% of sales) and electrical components (23%). In the first six months of 2016, the stock...

Read More from Stock Spotlight

Individual Stock Reports

ISRs make stock research easy!

Perhaps the most valuable two page reports available anywhere.

All the data you would normally have to plow through years of 10-K filings, earnings reports, and reams of market data to assemble — yours all in one concise report.

ISRs contain our proprietary Quadrix scores — find out how we rate all the stocks in the S&P 500.

Visit us at