Validea is a unique, Internet-based supplier of research and analytical tools for the individual and professional investors. What Validea does is interpret the investment strategies of well-known stock market investors, whom we call "gurus," and give you the ability to apply these interpretations to analyze virtually any stock or to follow proven model portfolios based on these investment legends.
We recommend that before you go any further, you read our free report on guru investing by clicking here.
The guru strategies on our site are based on historically successful investors who have proven track records and, often, have truly legendary reputations. They include: Warren Buffett, David Dreman, Kenneth Fisher, Benjamin Graham, Peter Lynch, The Motley Fool, John Neff, James P. O'Shaughnessy, John Piotroski and Martin Zweig. The strategies are based on our best interpretation of the published writings of the gurus and are not endorsed by them.
We first choose a group of investors whose abilities are practically beyond dispute. We then carefully read what they themselves have written about their methodologies and how they analyze potential investments. Almost all of our gurus have written one or more books or articles describing their approach to analyzing stocks. The one exception is Warren Buffett; we base our interpretation of his methodology primarily on the book, Buffettology, by Mary Buffett, as well as on other published materials.
When we read about a guru, we break down, into discrete variables, what the guru looks for when selecting stocks. We then take these criteria and create a model that we think fairly represents his investment strategy. Then, using financial data supplied by Reuters, we automatically apply this model to the 3000+ publicly traded companies in our universe. As a member of Validea, you have access to these models and analyses. Note, our approach is not endorsed or otherwise authorized by any of the gurus. We read their books and articles, and other materials about them, identify the variables we believe they use, interpret their strategies and weight the various criteria based on what we think is the emphasis the guru gives to each criteria. What we provide is our interpretation of how these gurus operate.
You don't have to get the information. That's our job. We find the data and calculate the variables for you. If you need the current ratio or the EPS, for instance, our software, which is patented, automatically does this work for you. With Validea, you just type in the stock symbols of companies you want to know more about, and we do the analysis, including breaking down each and every variable for each and every guru strategy for each and every company. It's automatic and instant. And, our site is updated every weekday night.
There's an old saying: Don't reinvent the wheel. These gurus have strategies which have been tested and used by investors for years, even decades. If you think you are a smarter student of the stock market than Graham, Buffett, Lynch, Dreman, Fisher and the like, then, quite honestly, you don't need Validea. If, however, you think folks like these are pretty savvy and have ideas which are worthwhile, then you'd do well to listen to them, understanding, of course, that you'll be using our interpretation of their strategies.
We at Validea believe that the most effective and successful investors are those with a logical, proven plan that they follow, no matter what. We analyze stocks and make recommendations based on cold, hard calculations. No emotion, no hunches - only the numbers matter. We let the guru strategies be our guides because we think emotion is an enemy of the investor, not a friend.
Validea South Africa costs R199 per month, R1074 for six months and R1800 for a year.
Validea South Africa membership provides full-access to all of our subscription services and features including our Guru Analysis, Guru Stock Screener and Model Portfolios as well as our My Validea section.
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Guru Analysis provides an in-depth analysis of any stock using Validea's interpretations of the published writings of (or, in the case of Warren Buffett, the writings about) 12 of history's most successful investors. These include: Warren Buffett, David Dreman, Kenneth Fisher, Benjamin Graham, Peter Lynch, The Motley Fool, John Neff, James P. O'Shaughnessy, Joseph Piotroski and Martin Zweig.
Using the power of Validea's computer programming and its access to the financial data of McGregor BFA, Guru Analysis takes virtually any stock listed on the JSE and analyzes them based on each guru's published strategy. Each strategy has different criteria it looks at. Guru Analysis runs each criteria of each strategy against the financial data of the company you are studying. It then tells you, instantly, how each of our 12 strategies rates the stock; you get 12 scores or ratings for each stock.
The Guru Analysis ratings or scores (scores and ratings are the same thing) are based on a range of 0 percent to 100 percent for each strategy as it is applied to the stock you are interested in. The ratings factor the number of tests the stock "passes" for each strategy. If it passes none of the strategy's tests, it gets a rating of 0 percent; and if it passes all tests, it gets a 100 percent rating. Different tests within each strategy get different weightings, because each investor thinks some criteria are more important than others. Our interpretations of the strategies take these different weightings into consideration. In fact, some criteria are so important to certain gurus that, if the stock fails one of those criteria, it fails the guru's strategy entirely, and will get a score of 0 percent, even if it passes other tests.
Strong Interest and Some Interest are a way to tell how well a stock meets a particular strategy's criteria. Strong Interest indicates that a stock meets essentially all of the criteria and Some Interest indicates that it meets most of the criteria. The scores that result in Strong Interest and Some Interest will vary for each strategy, but as a general rule 90% or above results in Strong Interest and 80% or above results in Some Interest.
The Guru Analysis is updated each night.
We launched model portfolios based on our guru strategies in South Africa in late 2010. We have a portfolio based on each of our guru strategies and several that combine all them. View the Model Portfolio Returns.
No, the names of individual investment advisors (i.e., the 'gurus') appearing on our site are for identification purposes of his methodology only, as derived by Validea.com from published sources, and are not intended to suggest or imply any affiliation with or endorsement or even agreement with our reports personally by such gurus, or any knowledge or approval by such persons of the content of our site.
The Guru Stock Screener allows you to see the stocks currently passing the strategies from our Guru Analysis. You can see the stocks that pass a particular strategy you are interested in or you can combine the strategies to see stocks that pass multiple gurus simultaneously. You can also combine your own fundamental criteria with our guru strategies to create custom screens.
Validea Model Portfolios are 10 stock simulated portfolios based on the strategies on our site. We offer two types of model portfolios:
Guru-based portfolios: For each of our 12 guru strategies, we offer a 10 stock model portfolio.
Consensus portfolios: Portfolios that draw from all of our guru strategies are our consensus portfolios. They are a consensus of all of the individual guru strategies. Probably the most widely followed of all of our portfolios is one of our consensus portfolios, the Validea Hot List portfolio.
The Validea Hot List model portfolio is based on a proprietary system we have developed that combines all of the guru strategies on our site. The system looks for the stocks with the most combined interest from our 12 strategies, but with a twist. The twist is that we weight the strategies with the best historical risk-adjusted performance more heavily in our Hot List scoring system. The result is a portfolio of the stocks with the most combined interest from our strategies with the best historical risk-adjusted performance.
The stocks in each guru portfolio represent the stocks that score the highest according to the particular strategy's guru score. The stocks in our consensus model portfolios are determined using a combination of all our guru strategies.
The stocks within our model portfolios are updated once every 28 days on Friday. The performance figures shown on the site are updated each night.
Each time we update the model portfolios, we perform a simulated transaction in which we sell the stocks that were previously in the portfolio and then buy the new stocks that currently meet the criteria of the model portfolio. By performing the updates to the portfolio using this method, we are able to not only get the new stocks in and the old stocks out, but also to ensure that the stocks are equally weighted on each update date.
We started tracking the performance in South Africa on August 6, 2010. We have been tracking them in the US since July 15, 2003.
Yes, we utilize a sliding scale stop loss system in our portfolios that is only applied on our scheduled rebalancing dates. The stop loss percentage we use starts at 40%, but it is adjusted based on the performance of the market. When the market return is positive, the stop percentage rises and when the market is down, the stop percentage falls. The amount it rises and falls is determined by a proprietary calculation we have developed.
The model portfolios are only updated every 28 days. The Guru Stock Screener is updated every day. As a result, the stocks in a model portfolios will not always match the highest scoring stocks in the Guru Stock Screener and the current portfolio. In addition, our model portfolios have both size and liquidity requirements, to prevent small and thinly traded stocks from being added. The guru stock screener does not impose these requirements, and as a result, the highest scoring stocks from the Guru Stock Screener will sometimes not be added to our portfolios.