Guru Grades
James Oberweis: Thinking Octagonally (Last Updated 7/26/08)
We evaluate here the market commentary of James Oberweis via Zacks.com since July 2002. James Oberweis is one of Zacks' "pros" and a principal at Oberweis Securities Inc., "a boutique investment firm...with a particular focus on aggressive investors." The firm's investment strategy, which they call the "'Oberweis Octagon,' uses eight criteria to combine the best features of both growth and value investing." Mr. Oberweis' commentary for Zacks is discontinued as of November 2007. The table below extracts highlights from his commentary and shows the performance of the S&P 500 index over the 21, 63, 126 and 254 trading days after the publication date for each item. Red plus (minus) signs to the right of specific items indicate those that the market has subsequently proven right (wrong). We conclude that:
- Although he often makes observations about market direction, his philosophy is to remain fully invested at all times.
- Mr. Oberweis depends mostly on the aggregate price/earnings ratio of his universe of stocks to assess market valuation and thereby predict market direction.
- Like many other experts, he has in the past year shifted focus from U.S. equities to Asian markets, especially China, in search of excess returns. He is now shifting back toward the U.S.
- Based on subsequent stock market performance and our judgments about his forecasts for overall stock market direction, James Oberweis has been right 65% of the time, which is very good. However, sample size is very small, as is our confidence in this accuracy rate.
- As noted above, James Oberweis' commentary for Zacks has been discontinued. We retain this record for historical reference as part of an overall analysis of guru accuracy.
In summary, James Oberweis has a generally good feel for market direction based on the fundamentals of stocks he follows. Confidence in this conclusion is very low.
See Guru Grades for a snapshot of the accuracy of various experts in predicting the direction of the U.S. stock market, including links to evaluations of the commentaries of other individual market pundits and gurus.
