Value Averaging

After following Dr. Krider’s proprietary twelve-step elimination process the initial list of 142 stocks was narrowed down to just one.

Let’s recap what a value stock is. Unlike our momentum stocks, a value stock tends to trade at a lower price relative to its fundamentals and is considered undervalued by a value investor. Characteristics of a value stock include a high dividend yield and low price-to- book ratio.

While Dr. James Krider uses a value tilt for his momentum stock universe, Dr. Krider uses the opposite approach in choosing his value stock: first we look at value, then add a momentum twist to the best value stocks.

December 2016

Resources

Value Averaging Spreadsheet
(Spreadsheet Excel format)