Raw Greed’s model

Posted on January 31, 2006 , filed under Stocks | Print This Post

The Internet is a powerful thing. By using the web, I am able to aggregate the type of information that was once only available to sophisticated investors, researchers and financial firms. I’ve spent some time studying and putting together a financial model for selecting my stock picks. I intend to use this new model, dubbed Raw Greed’s Model, in my IRA trading account that currently has approximately $16,000 in it. I will increase my investment in the IRA by the maximum allowable contribution, $4,000 in 2006 and 2007, and then $5,000 for 2008-2011. During the next 6 years it will be interesting to compare the performance of the stock pick’s produced from the model versus the performance of my general individual stock picking. I intend to debut the model and stock picks in a separate portfolio in March, 2006. The groundwork for the Raw Greed model is based on Joel Greenblatt’s formula in The Little Book That Beats The Market, which is an excellent book I recently read. The Raw Greed Model uses my own screening criteria to select individual stocks from the list of top stocks that the formula produces. I have set a lofty goal of a 30% return per year using Raw Greed’s model. With compounding and factoring in the maximum allowable contribution to my IRA, that would turn the $16,000 in my IRA account into $134,440.06 by the end of 2011.

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