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| Do you recommend all stocks that score well on your 155-variable model? |
| No, we do not. All stocks will have some orange and red highlighted areas of concern in their 32-cell profile. The 32 cells are a summary of the 155 variables. After receiving the computer printout, we then investigate those areas before making a recommendation. Furthermore, there are extenuating circumstances the model can't take into consideration. There are no variables in the model for litigation risk, geo-political risk, elections, interest rates or oil prices. Homebuilders may score well, but if we think rates will rise, we may pass on recommending that group. Oil stocks may score well, but if we think oil prices will fall, we may pass on recommending that group. These are a few of the things we look at in our subjective overlay that has been proved to improve performance versus when decisions are made exclusively by looking at computer scores. Other things we look at include, but are not limited to, rising and falling short interest, headline risk and earnings reporting dates. Sometimes, we may prefer to hold off on making a recommendation until after a company reports, or we may decide to issue that recommendation before the company reports. |
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| In 2007-2008, news about some struggling quantitative funds was publicized. What differentiates Standpoint Research from those strategies? |
| That quant fund reliance solely on computer output is not what we do, because we know it is a flawed methodology. That would be the equivalent of us running our model and recommending the highest scoring stocks without applying a subjective overlay and/or fundamental analysis as we do here. We rarely if ever recommend the highest scoring stocks on the computer model, because more often than not, they are "cheap" for a reason. The quantitative models over-weighted low P/E stocks; sold short high P/E stocks, and they got hit with the perfect storm. It could be over the long haul, it is a good strategy, but that is not our style and too simplistic. We feel that if we relied strictly on the model, it would be taking the easy way out. In fact, we did check last year and the subjective/fundamental overlay we apply has led to improved performance. The pure quantitative models are so widely used, that they have lost their edge and need to be overhauled. We saw this problem coming years ago, and that is why we use a hybrid methodology. The "quants" will throw statistics at us saying that the probability of some event occurring is very rare, when in fact it seems to be occurring every few years if we go back and look at trailing 20 years of data. When a system or methodology works, it will get ripped off until it doesn't work anymore. |
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| What makes your firm different from others? |
| We limit the number of clients with whom we work. We provide great personal service and work on evenings, holidays and weekends so that the research is delivered in a timely manner usually before the trading week begins. Much of our research is actually sent out on Sunday evenings and is based on Friday closing prices. We have no conflicts of interest and a truly unique approach. We use a proprietary 155-variable model that factors into consideration nearly every significant piece of data available in the marketplace. This data is for the most part available to the public. Our rigorous proprietary process and what we do with these data sets us aside from our competitors. |
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| What stocks do you cover and how are they classified? |
| We currently cover more than 2000 stocks including more than 200 ADRs. All stocks must have a $5.00 minimum price and market capitalization of at least $200,000,000. We divide stocks into ten sectors: Consumer Discretionary, Consumer Staples, Energy, Financials, Healthcare, Industrials, Materials, Technology, Telecom and Utilities. We also monitor more than 100 Exchange Traded Funds (ETF). Our model also generates recommendations on the industry and sector level. Click here for our coverage list. |
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| Can I pay through a soft dollar broker? |
| Yes. We have several brokers we work with. The soft dollar to hard dollar price ratio is 1.5 to 1.
If a client requests that we work with a new broker of their choice, we are willing to do so. |
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| How do we begin a relationship? |
| Please fill out our short client request form or contact us by telephone and we will set up a meeting or conference call to explain everything we offer and how we can work together. |
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| What are your fees? |
| Our three services are provided on a subscription basis. Custom portfolio diagnostics reports cost $4,000.00 per report. It is recommended to do this at least once per quarter, preferably twice. Computer-generated sector and index reports cost $1,000.00 per report. Weekly Picks annual subscription is $12,000.00. Please contact us to set up a meeting or phone call to learn more about our pricing and subscription options. Discount packages are available. You can see sample reports and detailed descriptions for all three services here. |
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| Who are your clients? |
| We serve hedge funds, mutual funds, pension funds and asset managers. We feel that anyone who is trying to make money in the stock market on the long side or short side should be using our services. |
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| How quickly can you turn around a request? |
| Requests are usually turned around within 12-24 hours. Some requests, such as customized portfolio diagnostics reports are filled within 48-72 hours. |
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| What is the time horizon on your recommendations? |
| On long recommendations, we look for stocks that have 50%-100% upside within 18-36 months, and short-term upside of 15%-25% within 3-6 months. On short sell recommendations we look for 15%-25% drops within 3-6 months as hedges against long positions in over-extended markets. Our recommendations are suitable for patient investors as well as short-term traders. A longer time-horizon usually plays in our favor because of our mean-reversion bias. Sometimes it can take a few months to see results because undervalued and overvalued stocks oftentimes remain that way for longer than expected. For more, go to Methodology. |
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| Do you currently manage money? |
| We do not currently manage money or engage in any related activities. If and when we decide to do so, it will be disclosed and will be accomplished in a manner that in no way creates a conflict of interest and/or compromises our status as an unbiased, independent research provider. |
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| Have you ever changed the weightings in your model? |
| No. We have never changed the weightings in any of the 155 variables since back testing was completed in June 2003 and we began running the model. What
we do adjust from time to time is our subjective overlay. That is the process when we filter through the top scoring stocks generated by the model, and we single out a few of those for recommendation. There are times when we will be biased towards certain industries, high dividends, high or low beta, or other criteria, depending on market conditions. We also avoided making changes because then the track record would be based on an outdated version and would not exactly apply to the revised version. |
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| Why are some of the reports in your Archives and Samples sections in Excel format as opposed to PDF? |
| We have recently started to offer both formats to subscribers. We do however recommend the Excel format because of the spreadsheet width in the scoring summary. In our opinion, it is more convenient for the user to work with the spreadsheets in Excel format and displayed on the computer monitor. |
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FAQs