Part 4: My Current Piotroski Results
This post is the fourth in a series about the Piotroski stock-picking methodology and its real-life application:
- Part 1: The Underrated Piotroski Stock-Picking Methodology
- Part 2: Ranking Stocks Found via the Piotroski Filter
- Part 3: Anatomy of a Piotroski Portfolio: Buying and Selling
- Part 4: My current Piotroski results
After having held a Piotroski portfolio since July 24 2013, I have had an annual ROI of 41.6% in 6 months. That is, in my opinion, huge. Of course the whole of 2013 and the start of 2014 have so far seen tremendously bullish stock markets in the West and I am certain I would not have earned this much during the crisis of 2007/08. UPDATE August 2014: My annual ROI is now 31.2%. As I thought, the 2013 period was very bullish and 2014 so far not quite as strong. But still: 31.2%! Let that seep in for a moment.
Being a huge winner in a crisis is, anyway, a dubious goal. That would require complex financial products whose benefit to someone other than bankers it is very hard to argue for, unlike stocks, and it would necessitate an uncanny nose for market timing. As anybody trusting in science and reading a few papers on investing knows, market timing is utter nonsense, so forget about that. The best thing you can do is to have a good positive investment strategy and then stick to it. That will make you come out ahead every time, even if that only means losing 5% over a year where the broader market lost 20%.
With regards to my personal results, the most important factor is the margin by which I have bested the DJI (35.7%) and the German DAX (24.4%). That is a huge indicator, to me, that I’ve been doing something right.
Being successful investing is mainly a matter of having a disciplined and rational system that you follow rigorously, and not just playing it by ear.