Track record and forward test
Are the quality points any good? That can only be answered honestly if it is clear what a look back can show and what it cannot. So this page sets out what we tested, why we publish no return figures and how we measure from now on.
Not evidence of future returns. Past performance is not a reliable indicator of future results.
What we tested
- Who: all 604 companies in the S&P 500 on 30 April of any year from 2011 to 2016, including those later acquired, renamed or bankrupt. Each company counts only in the years it was actually in the index.
- How graded: under the rules on this site, using only reports filed with the SEC by the cut-off date.
- What was measured: the performance over the following five years up to 2021, dividends included, compared with the S&P 500 including dividends.
The result is no reliable evidence that companies with many quality points beat the S&P 500. That is why we publish no return figures.
Why a look back proves nothing
- The rules knew the years. The data is public and every result can be recomputed. But the rules were set when these years were already known. A test on the same years easily confirms what went into the design, like an exam whose questions were known in advance.
- Few genuine observations. Overlapping periods do not count separately. Over a decade that amounts to only two or three independent results.
- Two traps we avoided. Testing only companies still listed today leaves out the losers. Projecting today’s index members back into earlier years takes later risers along. Both flatter any result considerably; both are excluded from our test.
- A period is not a law. What works in one market phase can fail in the next.
The forward test
- Since 12 Oct 2026 grades have been frozen with a timestamp at fixed dates, before the share price moves. Nothing about them can be improved afterwards.
- First evaluation after 36 months, scheduled for October 2029. It will be published as it turns out. This is a test plan: whether three years are enough for reliable evidence will only become clear then.
- If the rules change, the rule set gets a new dated version. Each version is measured from the day it takes effect.
What the points are and are not
The quality points summarise what published reports say about a company’s profitability, balance sheet, cash flow and growth, under fixed and open rules. They are not a buy list, not a price target and not a forecast.