Here are my Industry Ranks October 2007 for the current portfolio reshaping. Remember that my ranks can be used two ways. If you are a value guy like me, you pick from the bottom quartile, the green zone, for out-of-favor industries. I further filter that by striking out industries that in my subjective opinion, still have more pain to take. That’s why housing, housing finance, and housing related names are absent.
If you are a growth or momentum player, pick from the top of the list, because in the short run, momentum tends to persist. In the intermediate term momentum tends to mean revert. I play for the latter of those two momentum effects, because I am not much of a trader, and I think the effect is more reliable, and tax-effective.
Later today, I’ll post my final list of additions to the candidates list for the portfolio reshaping, after running an industry screen. Then over the next three days, I’ll get to work on the reshaping.