Channel Trend, Inc. Website

Price Projector Tables:

Channel Trend has measured the investment performance of its models starting in 1987, so we have a track record of over 20 years. The performance of our Price Projector Model is based on back test results from 1987 through 1996. Real time monitoring of the performance of our Price Projector, Stock Valuator, and Stock Manager models began at the start of 1997 using our Primary Population of approximately 1600 larger stocks.

At the end of each week the stocks in the Primary Population are sorted into deciles (ten groups with an equal number of stocks) based on the stocks’ rankings on each of the three models. Decile 1 is comprised of the 10% of stocks in the population with the most attractive rankings. Decile 2 is comprised of the next 10% of stocks with the most attractive rankings, and so on through Decile 10, which is comprised of the 10% of stocks with the least attractive rankings. The average percentage price change for the stocks in each decile and for the entire population is then recorded for the following week. This procedure is repeated each week.

The purpose of this analysis is to see if the models’ rankings on stocks are significantly related to subsequent price performance. If and to the degree that the rankings are significant, then the deciles comprised of the more attractively ranked stocks will subsequently perform better than the deciles comprised of the less attractively ranked stocks. Also, any performance differences will be the greatest between stocks with the most extreme rankings - that is between decile 1and decile 10.

The performance of the Price Projector Model strongly and significantly conforms to this desired pattern. This is particularly true for longer time periods of 3, 5, 10, 15, 20 and 20.25 years. For each of these periods ending in 2006, the average price change of stocks on the most attractively ranked decile (decile 1) has been the best of any decile and substantially greater than the performance of all stocks in the population. Conversely, the average price change of stocks of the least attractively ranked decile (decile 10) has been the worst of any decile and substantially worse than the performance of all stocks in the population.

A similar pattern is seen in the performance of stocks in deciles 2 and 3 and stocks in deciles 9 and 8. Stocks in deciles 2 and 3 have experienced the next best performance of all deciles, while stocks in deciles 9 and 8 have experienced the next worst performance.

The best evidence of this pattern is seen over the 20 year period that we have tracked the performance of the Price Projector Model. From 1987 through 2006, most attractively ranked stocks (decile 1) experienced an average annual price change of 24.03% per year. This compares to an average annual price change of 12.94% for all stocks in our population. The next best performance was turned in by stocks in decile 2, up an average of 17.16% per year, followed by stocks in decile 3, with an average annual price change of 14.57%.

On the negative side, the least attractively ranked stocks (decile 10) were up an average of only 5.20% per year from 1987 through 2006. Stocks in decile 9 rose an average of 8.42% per year, followed by a 10.83% average annual increase for stocks in decile 8.

Click image for close-up

Price Projector Model 1987 - 2006
Price Projector Annual Performance: This table displays the yearly performance of of Price Projector Model by decile.

Price Projector Model: 3 Yr, 5Yr, 10 Yr, 15 Yr, 20 yr and 20.25 Yrs Annualized Change
Price Projector Annualized Changes: This table illustrates the annualized performance changes for the Price Projector Model.