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Buffett and Beyond: Uncovering the Secret Ratio for Superior Stock Selection, + Website, 2nd Edition by Joseph Belmonte

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Chapter 19

Stocks on Our Radio Show

Back in 2012

Let's have some fun with Clean Surplus. We produced a radio program over a two-and-a-half-year period with which we had more fun than people should have. Listeners would both e-mail and call us regarding stocks they were interested in and ask us to perform our Clean Surplus analysis on their favorites. We kept a log of all these stocks during 2011 in order to see how the Clean Surplus method worked on a random selection of stocks. At the end of the year, we put all the stocks together to see how the stocks performed over the previous five years. I think all of you will be very surprised at the results we found in back-testing our random selection of stocks during this time period.

Please be aware that this chapter is not pure academic research. It is just having fun. What's the difference? Academic research takes a long time to implement, and research must be performed using the rules of academia. One must perform the work of a research scientist, which is the hat I wore when I took three years of my life in order to write and publish my doctoral dissertation on the Clean Surplus method. In order to have academic research published in a meaningful journal, the research must be approved by a group of academics with extreme knowledge of the particular area that the research falls into.

Before continuing on, please remember the goals of Clean Surplus. Clean Surplus is a model developed by the accounting profession, which allows investors ...

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