I uploaded a revision to my Hackinvest guide on scribd. In section 4.3 I explored a simple and somewhat naive formula for picking stocks, based on yield, ROE, retained earnings, and mean reversion of PE ratios. I picked out 3 companies: BWNG, MCRO and SN. I noted that the implied returns looked to high and were unlikely to be attained in practice. That was kinda true, although the performances were: BWNG +84.0%, MCRO +30.4%, SN. +22.1%. All them blasted the All-Share returns out of the water: ASX +13.1%.
The results could well have been spurious, of course, and dependent on the type of the company selected. Still, if the results got even close to being repeatable, who wouldn’t want a return that made it into the 20’s?