Utilizing the Waverley Research Selections

The Waverley Research approach to value investing has several advantages. First, our approach allows the investor the freedom to operate in a universe as small as the Dow Jones Industrial Average. Second, our approach employs a truly disciplined strategy by buying and selling stocks on a strict timetable. Our strategy involves reviewing and updating your portfolio on an annual basis and ignoring it in between.

The Waverley Research Strategy
Actual Example: January 1, 2005


Step One: Determine Amount

Determine the amount you wish to invest. For example, you have $2,500 to invest.

Step Two: Order Selections

Order the Waverley Research Selections. In this example, the Waverley Research Selections on our inception date of January 1, 2005 are JP Morgan Chase & Co. (JPM) @ $39.01 per share and Merck & Co. Inc. (MRK) @ $32.14 per share.*

Step Three: Evaluate

Evaluate the Waverley Research Selections. Determine if the selection(s) offered satisfies your fundamental or technical analysis, your investment goals and your risk tolerance.

An investor should know both the price and the value of a company's stock. Valuing the price of a share of stock is a method of determining a company’s profitability. NASDAQ offers some key concepts that will help the individual investor understand the various methods and factors used to analyze a stock and all the numbers you need to crunch.


Provided that the Waverley Research Selections suit your goals and objectives move to Step Four.

Step Four: Purchase

Purchase the Waverley Research Selections in equal dollar amounts. For this example, you would purchase $1248.32 of JP Morgan Chase & Co (32 Shares) and $1253.46 of Merck & Co. Inc. (39 shares).

Step Five: Calculate Performance Including Dividends

On December 30, 2005 the closing price of JPM was $39.69 and MRK $31.81. In 2005, JPM paid a dividend of $1.36 per share and MRK $1.52 per share. The portfolio increased in value to $2,613.47 and realized a 4.46% rate of return.

Rebalance your portfolio one year after your original purchase using the latest Waverley Research Selections.

On January 3, 2006 the Waverley Research Selections were Merck & Co. Inc. (MRK) @ $31.81 per share, AT&T, Inc. (T) @ $24.49 per share and Verizon Communications Inc. (VZ) @ $30.12 per share.

Your new portfolio would contain 27 shares of Merck & Co. Inc., 36 shares of AT&T, Inc. and 29 shares of Verizon Communications Inc. with a value of $2613.99.

Rebalance your portfolio by:

  • Selling 32 shares of JP Morgan Chase & Co.
  • Selling 12 shares of Merck & Co. Inc.
  • Purchasing 36 shares of AT&T, Inc.
  • Purchasing 29 shares of Verizon Communications, Inc.

*Our performance calculations utilize an “end-of-day” database. This means stock returns are calculated on the stock's closing price. For example, the database assumes that the "buy" price on Monday, January 3, 2005 is the closing price on Friday, December 31, 2004. Therefore, if the stock's price changes between the close of Friday and the opening price on Monday, our performance reports does not reflect the change. In other words, real-time investing results may be higher or lower than the results indicated from back-testing, depending on the stock's price change (if any) from the close of Friday and the actual price the investor obtains.