The Altman Z Value Strategy is Up 13% in 2014

Written by

Jae Jun

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2014 Q3 is now in the books and it’s not a pretty sight for value strategies.

No single strategy works every single year.

There are times of under performance and it’s really important to look at the big picture when you follow any mechanical strategy too.

Here are a couple of great comment I grabbed from the previous Q2 update and the dilemma over watching performance.

Great comment guys 🙂

With that, here are the end of Q3 results for all the stock value screens I publish on the site.

The Value Stock Screener Performances

2014 Q3 Value Stock Screener Performances | Enlarge

Not looking good.

There’s a sea of red in the Q3 column with only two strategies beating the S&P.

You can see from the numbers that small caps are having a difficult year with the Russell2000 posting -3.76% at the end of September.

But again, when it comes to monitoring performance, trying to find a strategy that beats the market year over year is impossible.

If you look at the yearly performance for each strategy, sticking to the strategy is what really pays off over the long run.

Jumping from one strategy to another hoping to get a winner each year can easily leave you with some serious under performance.

Click the image for the full size.

Stick With it For Success | Go to Full Stats

Full disclosure is that I don’t have any real money invested into any of the value strategies.

That’s because I use the value screens to

  • source stock ideas and
  • get an idea of what the market is doing

Being a fundamental and mostly bottom up investor, I really enjoy looking up individual numbers.

I love pounding and crunching numbers with the OSV analyzer, looking up new companies and learning about new industries.

So you can see why I’m struggling with letting go of controlling which stocks to purchase to test a value strategy for a full year.

The whole idea behind a successful mechanical strategy is to trust the system and process.

I don’t watch much TV but one new show I started watching and surprisingly learning from is The Profit, where Marcus Lemonis, CEO of Camping World, takes a stake in failing businesses and turns it profitable.

Before you continue reading about Altman Z stocks, here is a great resource you can use. Click the banner below to receive an Altman Z spreadsheet.

You’ll get the free spreadsheet immediately with a few extra resources to fill your investing toolbox.

altman z spreadsheet download

The three things he stresses are

  1. People
  2. Product
  3. Process

With a mechanical strategy, it’s all about the process.

Buying things that you wouldn’t buy normally, sticking to a rigid allocation strategy and applying strict buying and selling rules.

If you look at it another way, it’s a very disciplined method of investing to help mold you to make good objective decisions.

A mechanical value strategy is something I do want to try. I’m just working my way towards getting there 🙂

The Current 2014 Altman Z Stocks

Here are the stocks that make up the 2014 Altman Z Screen.

All stocks are held for one year with equal weighting.

Even if I believe a stock has reached intrinsic value, it stays. No sells.

The purpose is to keep it objective with minimal expenses.

Performance of 2014 Altman Z Stocks | Enlarge

20 New Stocks If You Were to Start Today

The value screens get updated on a weekly basis but if you wanted to start investing in the Altman Z value strategy, here are the stocks to look at.

If you are an old school value member, try plugging these stocks into the analyzer and see whether anything hits your radar.

New Altman Z Stocks | Enlarge


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