Why MarketGrader.com
MarketGrader is a quantitative system that should ideally be used in combination with sound qualitative research. It is designed to inform long-term investors about the financial health of thousands of public companies in a cost effective way. MarketGrader is not a system designed for traders or speculators looking for short term gains.
Quantitative + Qualitative
MarketGrader’s quantitative research was designed to complement qualitative analysis, not to substitute it. Qualitative analysis, in the area of stock research in particular, is the term used to describe research that focuses on the story behind a company, its products, its management, the regulatory challenges it faces, its competition and the many other aspects aside from its financial performance that require human understanding and interpretation. In contrast, MarketGrader’s quantitative analysis is based on a company’s fundamentals as described in our reports (broken down into four categories of indicators: growth, value, profitability and cash flow.) Therefore all the grades, scores, ratings and rankings produced by our system are based strictly on numbers (hence the term quantitative) and are devoid of any human opinion or influence. The system’s goal is to arrive at the clearest possible picture about a company’s financial health. This process may be compared to the use of an X-Ray or MRI machine to identify injuries to the human body; while the outcome provides a clear picture about what may be wrong, it does not provide a diagnosis, which would be akin in this example to a qualitative analysis of the injury. When combined with serious, intelligent and insightful qualitative analysis, MarketGrader’s quantitative analysis helps provide a clear picture about a company’s stock in a cost effective way*.
Clearly not all companies are created equal and they operate across very diverse industries and business models. This requires a significant level of distinction among different companies in order to add value to any analysis and avoid a “cookie-cutter” approach. MarketGrader makes these distinctions yet it is aware that a model cannot remain static in a world where businesses change rapidly in a diverse global economy. Our models therefore are always evolving as we look for ways to better measure financial performance across all industries under coverage; this evolution occurs without compromising the underlying nature of the research and focus on company fundamentals across our four key areas of analysis (growth, value, profitability and cash flow.)
Investment Discipline
Besides being a very good complement to sound qualitative research as described above, MarketGrader’s research is most helpful when used in the context of a disciplined investment approach. This can be defined in a few simple points prudent investors generally abide by such as:
- Sector diversification
- Market Cap diversification (small, mid and large caps)
- Ability to not fall in love with a stock
These points should of course be considered in the context of every investor’s own financial needs and risk tolerance.
The quality of the research used matters very little (whether qualitative or quantitative) if these basic investment rules are violated in search for short term trading gains. Therefore, in order to help individual investors find the stocks that best suit their needs, MarketGrader provides daily rankings across all ten economic sectors and almost 150 sub-industries. It also provides rankings across small cap, mid cap and large cap segments, all in the context of a comprehensive and un-biased fundamental analysis. Our Advanced Search allows investors to build their own screens to find the companies that best fit their own criteria (small or large, growth or value, etc.)
Investing vs. Speculating
MarketGrader’s research was designed to serve stock investors and is not particularly well suited to be used by short term traders or speculators. Traders are better off using tools that focus primarily on providing large amounts of intra-day price and volume data, technical analysis and momentum indicators where fundamentals play almost no role at all. MarketGrader’s research, in contrast, focuses on the quality of a company’s financials and how these might translate into long term investment gains. While MarketGrader does have a tool called DayTrader, which focuses on intra-day price and volume movements, it is designed to provide our clients access to stock technicals at a very low cost and not as the basis of trading decisions; we like to think of it as a nice add-on to our StockGrader reports. In fact, we discourage traders and professionals seeking riskier strategies from using MarketGrader as their primary source of data or information.
*MarketGrader is neither an investment advisory service nor an investment advisor. No data, information or analyses provided, or made available, by MarketGrader is a suggestion that any particular investment is suitable for you. All investors, should always check with a licensed financial advisor (and tax advisor), to determine the suitability of any investment. MarketGrader recommends to anyone trading securities to do so with caution and that, prior to the execution of a security trade based upon information from MarketGrader, the Web Site and Content, or any other Provider, they should consult with their broker or other financial representative. MarketGrader nor its affiliates or Providers of MG Content is, or shall be, responsible for any investment made by investors regardless of whether they used, or relied on, any information from the Web Site and Content.
All investors are encouraged to fully investigate any security before making an investment. Investors should obtain annual reports and other company information to complete their own due diligence in any investment. As a starting point to this investigation, the Securities and Exchange Commission (the "SEC") maintains a web site that contains reports, proxy and information statements, and other information regarding certain companies that file electronically with the SEC. In addition, the SEC also provides information on various kinds of cyber-fraud. The address of this SEC web site is . Likewise, the National Association of Securities Dealers Regulation provides its own insight careful and prudent investing at .
While MarketGrader strives to present accurate and useful information, MarketGrader makes no guarantee of its accuracy or completeness. All information, data analyses and opinion in the Web Site and Content is subject to change without notice. Grades and Ratings in the Web Site and Content are not be construed as investment advice. Do not assume that any ratings, insights, charts, theories, or philosophies (whether presented in the Web Site and Content or otherwise) will ensure a profitable investment.
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