As the name suggests, Gristina’s GARY, similar to Peter Lynch’s GARP (Growth At the Right Price) is a value sensitive method of stock selection and portfolio construction. However, a very key distinction is that GARY emphasizes YIELD, not PRICE (to earnings), as the key indicator of affordability.
- Rank universe of dividend paying stocks with proprietary GARY screen.
- Analyze top stocks for desired fundamental characteristics.
- Construct portfolio with high current yield and potential for price appreciation.
- Consider the entire portfolio for yield, beta, and sector and market cap concentration.
- Follow sell discipline for winners and losers.
- Learn from winners and losers and recalibrate the GARY screen.
Portfolio construction is as critical and the individual stock selection. Certain stocks in isolation may not work, but together with other carefully considered stocks they become the complete portfolio, built for income, stability and total return.
We have been repeating this process for over 10 years now with improving yield, beta and return characteristics.