Doubt in a combination of a ranking/buy rule.

Hi all!!!

Just a doubt.

I have a rule in a ranking system, this one:

LoopStdDev(“randd(CTR,TTM)/randd(CTR+1,TTM)”,12), the lower the better.

The porpuse is to rank higher the companies that invest more in R&D in the last 3 years.

Then I place this order in the “Buy rules”:

LoopSum(“randD(CTR,ANN)”,3)/3>0

And the porpuse with this one is to be sure there is at list a minimum growth in the investment in the last 3 years.

Then my question is… Is is this right?

Thanks!!!

James - the LoopStdDev function will rank smoothness of growth, but not strength. So it doesn’t do what you are asking. You want to use a standard growth function for this such as: GR%3Y(“RandD”)
higher is better

SteveA

Great!!!

I didn’t know I can use this function that way.

But, what it’s the correct way to write it in the “buy rules”?

A- GR%3Y(“RandD”)

or

B-GR%3Y(“RandD”)>0

And, if I place GR%3Y(“RandD”) in the ranking system, then there is no need to add anything to the “buy rules”?

You are confusing your desire for smoothness which definitely requires either a buy rule or other factors with a simple growth factor that does not require additional support. If GR%3Y(“RandD”) is your ranking factor then you don’t need a buy rule, assuming there are a reasonable number of stocks in the stock universe.

Hope this helps,
SteveA

Ok, get it. Thanks a lot Steve!!