Piotroski U.S Performance

The Piotroski method is currently the 3rd most successful value investing system, tracked monthly for the last 10 years by the American Association for Individual Investors (AAII). Over the last 10 years it showed 1,069% return, versus O'Neils CANSLIM (1,489%) and the Zweig method (1,800%).

CANSLIM and Zweig are however BULL MARKET investment strategies, and Piotroski is the only BEAR MARKET screen tracked by the AAII. Since we are in the throes of the 2nd largest bear market in 20 years on the JSE, we are very interested in Piotroski's methods!



Note how the Piotroski screen massively boosts the performance of low PB stocks. And look at how the Piotroski growth exploded from the trough of the 2003 bear and remarkably is showing 20% growth in 2008 when just about everything else is lying on the floor!

But how should we explain the poor performance of Piotroski's method in the mad bull run of 2006 and 2007 and its good performance in the current crash? Quite simply, in the peak of a bull run, everyone is chasing hyped up stocks and not the low PB stocks and in the bear run everyone comes down to the level of the low PB stocks and their value coupled with their sound "financials" from the "F"-Score starts shining through.

Given the current state of the markets now, it looks like a fine time to build up a Piotroski Portfolio! Here at PowerStocks we are going to do just that, building the first EVER published Piotroski Portfolio for the JSE, right in the midst of the 2nd largest JSE fall in 20 years. But first we need to test it to see if it works on the JSE. Sure, there is a 90% chance it should but at PowerStocks we like to back test our theories on the JSE first.

NEXT : Piotroski performance on the JSE