MirrorWeight Stock Allocation and Information System
creating mirror-weighted common stock portfolios from companies' fundamental financial data
Summary
The MirrorWeight stock allocation module applies user-coded rules to determine the portfolio weights of individual company holdings. The resultant mirror-weighted portfolio is displayed as a Current Portfolio within www.ownershipview.com. The MirrorWeight Module is supported by daily electronic feeds from EDGAR Online, providing up-to-date information on about 10,000 publicly traded companies.
Market Example of Mirror-Weighted Common Stock Portfolio
The MirrorWeight method of stock allocation creates company portfolio weights exactly equal to the following fundamental factors:
1. Earnings Yield (reciprocal of P/E Ratio), as % of the portfolio's Earnings Yield Total
2. Book/Price Ratio, as % of the portfolio's Book/Price Ratio Total
3. Or, user-assigned % Split between the above two factors
Users may enter up to 100 symbols in the MirrorWeight Module and receive instant stock allocations and full portfolio display. The example below has only three stocks in the portfolio. The mandatory user input is checked
, and the Mirror Weight output is highlighted.
Example of Mandatory User Input and MirrorWeight Output
(Data as of Oct. 15, 2009)
Weighting Factors:
1) Earnings Yield
2) Book/Price Ratio
3) % Split between E/P and B/P
Company Number of Share Position Earnings Earnings Yield as
Symbol Shares Price Value P/E Ratio Yield % of Earnings Yield Total
XOM
672.57 72.94 $ 49,056 11.82 .0846 49.0%
MSFT
1,316.51 26.71 35,164 16.49 .0606 35.2
GOOG
29.78 529.91 15,780 36.75 .0272 15.8
$100,000
.1724 100.0%
The MirrorWeight Module processes a vast amount of data to derive the number of shares and generate the mirror-weighted portfolio display in Ownership View. The OV Tool then gives the user further information about the portfolio's valuation and characteristics. For instance, you will have the business profile of each holding, stock valuation ratios, portfolio valuation ratios, ownership interests in revenue, earnings, cash flow and book value for each holding, and also the companies' reported financial data.
The MirrorWeight Module (with unlimited access) comes with the "premium" subscription to Ownership View. See subscription details for pricing and features.
Note: In portfolios with a large number of holdings, you may find it helpful to use the PRINT function to help track the performance of various portfolios and test strategies. When your mirror-weighted portfolio is displayed in Ownership View, there is no limit to the number of re-allocations you can make.
MirrorWeight Applications
Hedge, ETF, Index, Long/Short - Mirror-weighted portfolios can serve to test perfromance and suggest alternative strategies. By simply entering the current market value of the actual portfolio and the stock symbols, a mirror-weighted alternative portfolio can be instantly created.
Academic Research - Using mirror-weighted portfolios can serve as convenient benchmarks to test portfolio management hypotheses.
Long-Term Diversified Portfolios - By simply inputting symbols and portfolio market value, an alternative portfolio can be instantly created. The process can reveal portfolio concentrations not supported by fundamental financial data.
ERISA - The mirror-weighted allocation can serve to broaden the discussion with managers as
to the appropriateness of certain holdings.
