The Zen Ten model is designed as a buy & hold portfolio. At the end of every December I run three consecutive and independent screens. The first is a gauge of sentiment towards the company. It looks for increasingly bullish ratings, upgrades and revisions, and inclusion on other lists that I maintain.
The second screen looks more narrowly at the earnings picture. Have analysts been raising earnings estimates? Has the company raised their forward guidance numbers?
The third screen is about quality and value. Profits must be growing by at least 10% per year, the quality of earnings must be well above average, and the price of the company must be at or below fair value, using a discounted cash flow method.
The Performance History
The performance of the Zen Ten model is outstanding. On average, the model has produced Alpha of 5.3% per year over the last 10 years. The only things that would cause me to change the model before the 12 month period has expired would be a bankruptcy, delisting, or takeover by another company.
Zen Ten Track Record
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$55/month
$550/year