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I am experimenting with it.

I know it is easier to learn than gtr1.

How hard do you think it is to learn the software?

I realize everyone's experience and learning curve is different.

It seems like if you get very good at it, that it is excellent.

P123 is pretty easy. Once you get used to it, and carefully read the description of the rules.
There is a lot of help.

I only used it for screening, not for portfolios.

Thanks Ray. I understand it's strength is that it does ranking, where each factor is given a certain weight. With screening, after 5 factors or so, you are down to 4 stocks. With ranking, you can have 150 factors.

I first used Portfolio123 starting in 2005. Their ranking system was a big step forward over a series of comparisons of > or < than individual factors. There were initially many of us that found simple screens or even more complex simulations with separate buy and sell criteria that worked in backtests but didn’t hold up post discovery. However, over the years both the user community and the product has improved. There are a significant group of capable regulars that consistently report outperforming the market.

Until the last couple of years I believe you could do virtually anything P123 could do for free but not quite as easily. P123 advantages in the screening are not so much in capability as in the ease of use and how quickly you can accomplish different evaluations. P123 has also expanded their capabilities. In their more expensive ~$2.5-5K per year you can now download historical features and use machine learning to evaluate both individual and combinations of features that contain the most information.

I would caution anyone that although P123 has the tools it isn’t easy to outperform the market; you’re competing with a large number of professionals. Most mispricing of stocks occurs in the small and microcap stocks the big guns bypass.
Yuval Taylor was a successful writer with no stock investing background who dove into using P123 full time and ended up being successful enough in a few short years that P123 hired him.

Read his testimonial “How I made $6Million with P123”. Unfortunately, it looks like you have to give them your email to read it

His success didn’t come by accident, he researches every single factor, how they work with different companies.

His blog is also a good read. invest(igations)

Considering the diversification benefits for everyone, the overvaluation of the US market and dollar relative to other regions, and the growing concerns some have about the investability of the US going forward, some might appreciate that P123 has backtesting capabilities for European equities. One could start by testing models that have performed well in the US. How a particular model performs in Europe can also provide confirmation, or raise significant questions, about the effectiveness of that model when traded in the US. It looks like P123 is also in the process of adding Asian and EM markets which will add further diversification etc. I haven’t subscribed yet, but I’m thinking about it.

They have a 21 day free trial for about 20.00.

Is there a suggested way to learn it? Like try screens using the wizard, then free form, then try backtesting, then try simulations, etc.?

The basic P123 subscription only supports 5-year backtesting, which is fairly useless. However, they permit users to change their subscription types monthly...so, for one month each year I subscribe to the long-term backtester to experiment with new screen ideas, etc., without breaking the bank.

Taz

some might appreciate that P123 has backtesting capabilities for European equities.

Interesting, I didn't know that. It's priced separately, which is fine.

Do you have any idea whether they have the same set of data fields / capabilities available?
Their data dictionary makes a lot of references to SEC filings and so forth, so it's not immediately obvious, and their overview of the European data offering is a bit brief.
( https://portfolio123.customerly.help/en/data/europ... )

Jim

1)all companies in the Eurozone countries (Euro as currency) with
2) a trading volume of more than €100,000 over the past 30 days
3) and a market value of over €100 million.
4)From this universe we first selected the 20% of companies with the best six-month momentum.
5)sort this group of companies by price to book from low to high
6) and then buy the lowest 50

https://www.quant-investing.com/blog/momentum-meet...
tested this in one period and reported doubling the relevant index at the cost of volatility

It would be interesting to have a P123 subscriber run it

another observer tested a period using European stocks:

https://verdadcap.com/archive/improving-our-europe...
1) quality signals:a company’s
a) probability of paying down debt and
b) its profitability.

2)
) value signals including
a) EBITDA relative to enterprise value,
b) free cash flow yield relative to equity, and
c) book value relative to market value.
and

3) momentum: the prior 12 month stock price return

I found it quite challenging to learn, because it is a new language. I am a terrible programmer.

In a study from 2000-2020 of-European momentum lags of 1, 3, 6 and 7 months are even above 5 suggesting very high predictability power for future returns of Euro stocks with 1 and 2 not as good and up to 12 months still good

https://www.sciencedirect.com/science/article/pii/...

I read the exact same thing. For less than one month momentum, you have reversion to the mean.

I don't know what data fields/capabilities they have, but they use Factset data in both the US and Europe.

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Berkshire Hathaway FAQ

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