The Portfolio Duel: Method and Disclosures

Who produces this

Operator and publisher:

TM Internetmarketing GmbH
Seestraße 16
71638 Ludwigsburg
Germany

Managing Director: Thomas Mücke. Commercial register: Local Court of Stuttgart, HRB 741694.

Responsible for editorial content under § 18 (2) of the German Interstate Media Treaty (MStV): Thomas Mücke, Seestraße 16, 71638 Ludwigsburg, Germany.

Nobody runs these portfolios by hand. A program applies the rules on this page on every trading day. The rules themselves are set — and changed — by the person named above, and every change is listed in the change log further down.

What is published here qualifies as investment recommendations under Art. 20 of the EU Market Abuse Regulation (MAR) in conjunction with Delegated Regulation (EU) 2016/958. This page carries the disclosures required there and is permanently linked from every page of the section. The operator is a publisher, not a registered investment adviser, and gives no individual advice.

Full publisher details

How the portfolios are calculated

The same ground rules apply to every portfolio, so that anyone can recalculate any curve:

1. Every portfolio starts with $100,000, all of them on the same trading day.
2. At most 15 holdings at a time, equally weighted. No holding gets more than 20% of the portfolio at purchase.
3. A holding rated green gets double weight.
4. A holding rated red is never bought. If a holding turns red, the portfolio sells it on the next trading day.
5. If a portfolio finds fewer than 5 candidates, the rest stays in interest-bearing cash. A portfolio that finds nothing holds cash — that is a result, not a failure.
6. Trades are executed at the closing price of the trading day after the signal. No hindsight, no yesterday's price.
7. Order costs of 0.1% of the order value, minimum $1, deducted from cash. Every figure shown is net of costs.
8. Dividends are credited as cash on the ex-date. Stock splits are handled through the adjustment factor of the price source.
9. Selling is checked every trading day; buying follows each portfolio's own schedule.
10. No margin, no leverage. The short portfolio commits at most half of its capital, the rest stays in cash.
11. No portfolio is quietly retired or hidden. Losing portfolios stay visible.

The portfolios one by one

What each portfolio buys and when it sells again, in one sentence; the full rule set is on the portfolio's own page.

Portfolios built on our stock scanners

• Quality Stocks

  Buys shares in companies that have earned money reliably for years and carry little debt. New positions are added once a month; a share is sold as soon as it no longer meets the requirements.

• Earnings Surprise

  Buys shares in companies whose quarterly figures came in well above expectations. Purchases happen the day after the signal. Every holding is kept for three months and then sold, whatever it has done in the meantime.

• Graham Net-Net

  Buys shares that cost less on the market than the company holds in readily available assets after all debts are deducted — Benjamin Graham’s strictest rule. Such cases are rare, so the portfolio holds at most nine positions and often a lot of cash. New positions are added once a month; a share is sold as soon as it no longer meets the rule.

• Turnaround

  Buys shares in companies that are finding their footing again after a weak stretch — the figures are improving while the share price has not caught up. New positions are added once a month; a share is sold as soon as it drops off the list.

• Magic Formula

  Buys by Joel Greenblatt’s formula: companies that earn a lot on the capital they employ and are cheap at the same time. New positions are added once a month. As in the original, each one is held for twelve months and then sold.

• Power Play

  Buys shares that break out sharply and on heavy volume after a quiet stretch. A position is sold as soon as the price falls 10 percent below its highest level since purchase, or the share drops off the list.

• Terry Smith Quality

  Buys a handful of unusually profitable companies and then leaves them alone. New positions are added only once a year; a share is sold as soon as it no longer meets the requirements.

• Piotroski F-Score

  Buys shares in companies whose balance sheet has improved on nine separately tested points — Joseph Piotroski’s check. As in the original, new positions are added only once a year; a share is sold as soon as it no longer passes the check.

• QARP

  Buys good companies at a reasonable price: solid figures, without paying any price for them. New positions are added four times a year; a share is sold as soon as it no longer meets the criteria.

• Fundamental Rank

  Buys the shares with the best overall grade across several balance-sheet and valuation measures. New positions are added once a month; a share is sold as soon as it drops out of the top group.

• Triple-Digit Growth

  Buys shares in companies whose revenue has more than doubled within a year. Such shares swing hard, so a position is sold as soon as the price falls 20 percent below its highest level since purchase, or the share drops off the list.

Our own strategies

• Green Light

  Holds every US share our own analyses currently rate green, in equal parts. As soon as a share is no longer green it is sold on the next trading day. The check runs every trading day.

• Bankruptcy Candidates (short)

  Bets on falling prices at companies showing serious signs of impending insolvency. At most half the capital is committed; the rest stays in cash. A position is closed as soon as it moves 25 percent against us, and after twelve months at the latest.

• Handpicked

  Mirrors the operator’s real portfolio: three shares held and two bets on falling prices, all five in equal parts. The list is reviewed once a year; in between, a share is only sold if our analyses turn it red. The operator’s share counts are in the disclosure — this portfolio trades the same names, but with the same $100,000 as every other one.

Additional strategies

• Storm-Proof

  Buys the shares with the best overall grade but leaves out every one flagged by our insolvency radar. If a holding shows up there, it is sold on the next trading day. New positions are added once a month.

• Fair Weather

  Buys shares in steady uptrends — but only while the broader market plays along. If our market-breadth reading slips into the red, the portfolio goes fully to cash and only buys again once the reading recovers. An individual share is sold as soon as it loses its uptrend.

• Insider Trail

  Buys shares where at least two people from inside the company bought with their own money within 30 days. Every position is held for six months and then sold.

• Fund Shadow

  Mirrors the reported US holdings of a fund we track. Whenever the fund discloses new figures — four times a year — the portfolio is rearranged to match. Anything the fund no longer reports is sold.

• Hot Stocks

  Buys the shares people are talking about most in the big investor forums right now. A position is sold as soon as the price falls 20 percent below its highest level since purchase — and after six weeks at the latest.

The yardstick

• The Lazy One

  Buys one Nasdaq-100 fund and one S&P 500 fund in equal halves on day one and never touches them again. This portfolio is the yardstick: it shows what doing no selecting at all would have produced — under the same cost and cash rules as everything else.

What the rating means

A stock's rating comes from the most recent published analysis of that company. It is not reinvented for the duel:

• Green (“Quality confirmed”): business model, numbers and balance sheet hold up to our review. The holding gets double weight in the portfolio.
• Yellow (“Open questions”): documented questions remain open. Normal weight.
• Red (“Substance risk”): at least one documented finding threatens the company itself. Never bought, and sold out of the portfolio.
• No rating: many stocks have not been analyzed yet. They are bought under the normal rules of their portfolio. Every portfolio page shows what share of its holdings is rated green.

Time horizon: a rating is not a price forecast for the coming days. It applies as of the date of the analysis and over a horizon of several years. The portfolios are long-term too and run without an end date; how long a single portfolio keeps a position is part of its rule set — from a few weeks to indefinitely.

Updates: holdings, prices and value are carried forward on every trading day, and so is the sell check. Purchases follow each portfolio's own schedule.

How our ratings are made

Which prices are used

Only the closing price of the US trading day is used — 4:00 p.m. New York time. Nothing moves inside the portfolios during the session; there is no intraday snapshot.

Every portfolio page states the trading day that its holdings, prices and value refer to. If a run is missed, that date simply stays where it is — no price from another day is ever slipped in.

Prices come from the same market data source that feeds the stock pages of this site. Cash earns interest through a money market instrument priced from that same source.

Conflicts of interest

The operator owns stocks himself. Which ones, in which direction and in what size, is stated here — in plain numbers, not as a possibility:

These entries are maintained in one single place and carry the date they were last confirmed. The same list produces the notice on every affected analysis and on every portfolio page where such a holding appears. Change a position, and it changes everywhere at once.

We receive no payment for producing an analysis or a portfolio, or for its conclusion — neither from the companies concerned nor from third parties. Some pages of this site carry labeled partner links, for example to brokers. They have no influence on what a portfolio buys or sells.

What we compare against

Every curve carries two comparison lines: the Nasdaq 100 and the S&P 500, both as US index funds (QQQ and SPY). Three differences matter when you read that comparison:

• A different universe. Both indices consist of the largest US companies. Several portfolios also buy small caps — smaller firms whose shares trade less often. So the comparison is not like for like.
• A different range of swings. A portfolio of at most 15 holdings swings harder than an index of 100 or 500. A lead can therefore simply mean more risk was taken — and a shortfall the opposite.
• A different treatment of dividends. In the portfolios, distributions arrive as cash and raise the portfolio value. Whether an index line includes distributions depends on how that line is calculated.

That is why "The Lazy One" runs alongside as the yardstick: on day one it buys one Nasdaq-100 fund and one S&P 500 fund in equal halves and never touches them again — under exactly the same rules as every other portfolio, with the same order costs, the same cash rule and the same treatment of dividends. If you want to know whether picking stocks is worth anything at all, that is the line to look at.

Change log

Every rule set carries a version number. Change a rule and the number goes up, and the change appears in this table with its date. Nothing is edited after the fact.

Recommendation history

Every purchase and every sale of every portfolio stays visible for good: date, stock, number of shares, price, order costs and the rule that triggered it. Nothing is removed afterwards, least of all a bad call.

Art. 4(1)(i) of Delegated Regulation (EU) 2016/958 requires an overview of the recommendations issued on an instrument over the past twelve months. The history in the Portfolio Duel is not trimmed after twelve months — it stays complete.

To the portfolios and their history