A New Rating System

To improve thesis clarity Beyond The Hype will start using a rating system that is composed of two parts. The first part of the rating indicates appreciation potential and the second part indicates BTH view of risk and appropriate weightage in the portfolio. The intent of the new system is to make investors to think more carefully about portfolio allocation and position sizing.

Appreciation potential will be on a 0 to 5 scale with the following descriptions:

0 – “Avoid” suggests that the stock’s direction is difficult to predict – usually due to corporate governance issues, competitive intensity, or environmental factors.

1 – “Sell Short” suggests the stock has significant downward potential.

2 – “Sell” suggests the appreciation potential does not merit the stock being in a portfolio.

3 – “Hold” suggests that the stock is likely to appreciate in line with the relevant sector or with indexes. Securities with a “hold” rating, assuming they are in a portfolio, are typically good sources of ca…