Martin Zweig — Investing with Data Studies
American investment legend Martin Zweig began his career in the 1970s as an investment newsletter writer and contributed numerous articles to Barron’s Magazine. He went on to become a successful and influential investment adviser on Wall Street, known for his exhaustive data studies. The Zweig Forecast was the top market advisory for the 15 years period between 1980-1995. His forecast delivered a 15.9% p.a. compounding return, the highest risk-adjusted return of any market advisory service during that time.
Look for Sales Driven Profits
In his book “Winning on Wall Street” he outlines his strategy for identifying companies with strong growth in earnings and sales, a reasonable price-earnings ratio given the company’s growth rate. The book also expounds the virtues of companies where buying is done by insiders (or at least an absence of heavy insider selling), and that have a relatively strong price action.
A stock must meet a slew of earnings-related criteria, showing that its earnings growth is at a high rate over the long haul; persistent over several years in a row; accelerating in more recent quarters; and sustainable, i.e. driven by sales growth, not cost-cutting measures. Martin Zweig wanted a firm’s debt/equity ratio to be low compared to its industry average. On top of all that, Zweig wanted to make sure he wasn’t paying too much for a company’s growth.
Martin Zweig’s Background and Credentials
Zweig earned a BSE from Wharton School of the University of Pennsylvania in 1964, an MBA degree from the University of Miami in 1967, and a Ph.D. in finance from Michigan State University in 1969. He later taught finance at Iona College and Baruch College. Zweig invented the put/call ratio, a well-known market indicator. In 1986 Zweig wrote the best-selling book “Winning on Wall Street”.
→ Read more about Martin Zweig’s investing strategy on meetinvest and see how a portfolio would have performed using his strategy.