The model I use looks at financial data over large numbers of companies, in a comparative way. In data analysis, if you have a large sample you can see perturbations from the mean. These perturbations are what indicates the convergence and divergence factors I blogged about earlier.
Remember the concept of amplification ? This is what a good company does, it amplifies cash in. This capacity to amplify shows up in the company's financial statements over 1, 5 and 10 years. The best companies are like gold standards, they set a basis for comparison and perturbation. Simple right ?
The best companies I have found include JEC and EME. This is not a recommendation to buy, never listen to any advice to buy, except yours, this is an analysis I made which I am blogging about.
The good thing about companies in sync with the index is they can be pulled down to cheap prices by market movements, no matter the state of the company itself, but come up again, the market computes like this. There are more in this group.
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