First .... We need to be aligned on the premise that High Price ( combined with other safeguarding factors) - should tend to lead you to better firms. And this is amply clear from the filtered list!

The questions are 2 critical items

(a) Is the premise to hold a Top X% tile price stock till it splits - which in essence seems to be the screen's performance. This outcome is of course not guaranteed - I would wager a majority of the past holds and exits are due to this option

If so, then its also incumbent to benchmark it to a simple 2 stock screen ie BRK-A and NVR ( Somehow 2 stocks which seem to have bucked the Split exit path)

(b) If not, ie the high price itself is a demarcation factor - then those stocks need to be eligible for picking forward irrespective of the Split adjusted price .... ie like Google should be ~$6800 stock. The Split can't be an exit condition.

My guess is that the way the screen is constructed now - it does (a) while completely obfuscating this KEY EXIT factor


Bob - on the ML ( specifically tree-class algos - but it also generally applies). No it wont learn the individual stocks price - but it would learn the differential boundary criteria of the underlying cohort - eg If we believe the current picks are OUTSTANDING firms - then the price demarcation is appx Price > $575. And if say all of this holds true( ie the set continues to dominate and doesnt alter at the top) and the stock market doubles in 2-3 years and you hold the model constant ...... that rule will throw any Stock with price > 575 into the mix. But if the cohort has remained constant and it also doubled ( with no Splits etc) - the threshold now has moved to $1150.

You just have to have the mechanism to embed/factor this indexing into the model

Best

Mechanical Investing FAQ

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