For this ROE_Cash screen, thoughts on buying top 12 stocks and HTD 20, as Elan had suggested a couple of weeks ago?

I'm sure there are lots of good variations.
I tend to stick with the "more stocks" version since it meets the original goal of being a SPY substitute. That requires some diversification.
Sharpening a screwdriver might make it a better awl, but it's intended to be a screwdriver so is that an improvement?

If you need an awl, of course, go ahead. But I was looking for a screwdriver.

Separately, aside from the bad metaphor, the screen doesn't seem to offer better returns with fewer stocks, so I didn't pursue that.
If your plan is to make 12%, it's better to make 12% with 40 stocks than to make 12% with 12 stocks. A surprise blowup hurts less, emotionally and financially.
If dropping 12 stocks indicated you might expect 5%/year more that's a different kettle of fish, but I didn't see that here.

Jim

Mechanical Investing FAQ

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