{"id":1546911,"date":"2013-09-13T18:22:52","date_gmt":"2013-09-13T12:52:52","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=1546911"},"modified":"2013-09-13T18:22:52","modified_gmt":"2013-09-13T12:52:52","slug":"the-use-of-historical-financial-statement-information-to-separate-winners-from-losers","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2013\/09\/13\/the-use-of-historical-financial-statement-information-to-separate-winners-from-losers\/","title":{"rendered":"The Use of Historical Financial Statement Information to Separate Winners from Losers"},"content":{"rendered":"<p>In a paper published in\u00a0January 2002, Joseph Piotroski explored whether a simple accounting-based fundamental analysis strategy can give better returns to an investor. He came up with a way to score balance-sheets based on financial strength &#8211; the higher the score, the better were the prospective returns. Scientifically curious readers can take a look at <strong><em>Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers<\/em><\/strong> (<a href=\"http:\/\/www.chicagobooth.edu\/~\/media\/FE874EE65F624AAEBD0166B1974FD74D.pdf\" target=\"_blank\">pdf<\/a>)<\/p>\n<p>We created a <a title=\"Investment Themes\" href=\"http:\/\/stockviz.biz\/Themes.aspx\" target=\"_blank\">Theme<\/a> based on this score. Basically,\u00a0balance-sheets are scored based on current profitability, stability and operational improvements for two years (using 3 years of data.) The rationale is that stocks that score high on these criteria should out-perform over a period of time.<\/p>\n<p>You can take a look at the this theme here: <a title=\"Financial Strength Score driven Value picks\" href=\"http:\/\/stockviz.biz\/#\/theme\/equity\/9eabd2f0-392a-4d89-a665-ef6576a7d471\" target=\"_blank\">Financial Strength Value<\/a><\/p>\n<p>Similar themes: <a title=\"Joel Greenblatt's Magic Formula\" href=\"http:\/\/stockviz.biz\/#\/theme\/equity\/90bedcea-ff82-43e7-a20c-020ccb29e328\" target=\"_blank\">Magic Formula Investing<\/a>, <a title=\"High GPA High BtM\" href=\"http:\/\/stockviz.biz\/#\/theme\/equity\/2df79fd7-64f4-47f2-9f53-6b1ace8012a3\" target=\"_blank\">Quality to Price<\/a>, <a title=\"Quantitatively strong balance-sheets\" href=\"http:\/\/stockviz.biz\/#\/theme\/equity\/4e4c54cb-fa44-4a73-b4e4-94e4ab646660\" target=\"_blank\">Balance-sheet Strength<\/a>.<br \/>[stockquote]PRECOT[\/stockquote] <\/p>\n","protected":false},"excerpt":{"rendered":"<p>In a paper published in\u00a0January 2002, Joseph Piotroski explored whether a simple accounting-based fundamental analysis strategy can give better returns to an investor. He came up with a way to score balance-sheets based on financial strength &#8211; the higher the score, the better were the prospective returns. Scientifically curious readers can take a look at &hellip; <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[2481,2541],"class_list":["post-1546911","post","type-post","status-publish","format-standard","hentry","category-your-money","tag-quantitative-value","tag-theme","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/1546911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=1546911"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/1546911\/revisions"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=1546911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=1546911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=1546911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}