Mr. Graham And Mr. Dodd, Meet Mr. Python: My Computer Analyzes Monster Beverage, Shopify, And Tesla

Summary

• Computerized systems, sometimes derisively referred to as "black boxes," can also be created to do fundamental, Graham-and-Dodd-type analysis.
• The strength of these computer programs is that they can compare each public company to all others. For that purpose, I use a computer language known as Python.
• This article compares the computer-generated analysis of three companies: Monster Beverage, Shopify, and Tesla.
• An important question confronting a developer of such programs: How extreme or normal a market do you want to prepare for or take advantage of?

Readers have requested, both in comments on articles I've written for SA, and in emails, for more on the performance record of the software I developed and use, and for example reports. It is my hope that this article will be a satisfactory response.

Here is the long/short performance of the total portfolio since 2016. Click here to see the complete list of long and short positions taken. New positions taken in 2020 are excluded both from this record; these are covered in current my research reports - the BarnBurners and The Dirty Dogs.

Notes:

1. The software evolved over a period of years. Originally, its purpose was as a tool in a risk analysis consulting service that served mutual funds, hedge funds, and family offices. As such, although I include results from the earlier versions of the software, it has evolved significantly and early results are not particularly relevant to current performance. Gradually, steadily, the results have improved.
2. Some positions that were highly profitable are not included in this performance record because they don't meet the timing criteria (as described above) developed over the last year, or because they were acquired or liquidated (in bankruptcy) I don't know whether or not they met the timing criteria. The purpose of this article is to explore the potential of the current strategy including its timing aspects. Since those positions might not have been taken if the software had been used at the time of the buy/sell decision, they are not included here.
3. Some examples of short positions actually taken based on the financial statement analysis software that are not included in the performance record because of the unknown timing analysis:

• CETX - position taken at around $10, now at $1.20.
• RYCE - $150 now $7.30 (reverse split adjusted).
• RBS - $10 now $5.95. And now

Analyst’s Disclosure:I am/we are long MNST. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Unless you do your own research, you should not use my research to build a concentrated portfolio. The software I use is designed to create a highly-diversified long/short hedged portfolio.