In the June 2010 issue of Technically Speaking I reviewed Version 6 of High Growth Stock Investor (HGSI) software. Industry Monitors recently unveiled a major upgrade to the platform. Version 7 of HGSI implements a new system software architecture enabling High Growth Stock Investor to evolve into an Application Trading Platform.
HGSI offers a collection of seamlessly interactive tools designed to simplify the process of selecting candidate stocks to buy and sell. HGSI simplifies the process of finding the “What, Which, When, Why, and So What” that feed your decision-making efforts. Its goal is to create an intelligent user faster.
HGSI is an end-of-day application that screens the universe of stocks to find those most likely to outperform the market. Data is provided by Quotes Plus (QP2). The user can utilize either a top-down or bottom-up approach.
The top-down approach is one which moves from Markets to Sectors to Industry Groups to Stocks in the search for strongest stocks in the strongest industry groups. Groups can be any collection of securities or indexes that have meaning to the user, e.g. baskets, industries, market sectors, portfolios, indices, exchange traded funds, etc. Using ranking tools for acceleration, velocity and relative strength you are able to find groups of stocks that are moving up or down faster than other groups.
The bottom-up approach defines certain characteristics and then filters out any candidates that do not meet those criteria. It does not dwell on groups, sectors or industries, focusing instead on the desired characteristics of each security.
HGS Investor Software Features
The Housekeeping Features
p11
HGSI offers a detailed help system installed with your software. You can display the Help system from the “Information” icon. You can also click on the Help menu option or Help button on a dialog box. Information also includes links to the Learning Center, HGS Website, a very active HGS Bulletin Board, and Member Services.
“Preferences” maintains your HGS Account information and enables you to set your Global Index options, including the Index Type (e.g., Average Price or Equal Dollar Weighted), which filter to apply, if any, and the start date for indexing.
“Update” initiates an update of the various HGS Investor databases and includes the QP2 download. You may elect to run these updates manually or schedule them to run automatically at a selected time.
Managing Lists with the Designer
The Designer customizes the groupings of stocks for your own needs and preferences and displays a set of group databases containing three types of groupings:
- The HGS Reference Groups item contains the Investors’ Data Repository listing standard industry reference groups, such as AMEX, NASDAQ and so forth. Symbol changes and new stock additions are incorporated into the database via Update. You cannot modify this data in any other way.
- The User Groups item allows you to copy the data from the HGS Reference Groups or to create your own personalized groups of stocks, such as watch lists and custom portfolios. This grouping allows you to create, modify and experiment without altering the HGS Reference groups. With new users or “clean” installs, the User Groups item is empty when you first install the software and the views, filters and combo ranks are found in the HGSI Classic and HGSI Applications folders. If the user is upgrading from version 6, the Version 6 filters, views and combo ranks are moved into Version 7 “User” folders.
- The SmartGroups are daily lists of top stock selections generated by the Designer HGSI Group Database software. The lists are updated daily and organized into a variety of HGSI Groups.
The Productivity Features
Warehouse, Ranking and Charting are the productivity features within which you perform most of your analysis work. They help you to decide what stocks, groups and industries are the current best performers, which are the strongest, and finally when you should invest.
The “Warehouse” enables you to set your own criteria to determine what stocks, groups or indexes are the best performers. By creating filters based upon your own criteria, you use the Warehouse as a Data Mining Center to draw potential winners from the original reference list of over 8000 candidate stocks in 154 Industry Groups, 10 Sectors in which the industry groups are located, and 3 Markets (NYSE, AMEX, Nasdaq). Using a pre-designed list of fundamental and technical data you build views and filters reflecting the criteria important to you.
“Ranking” indicates where the money is flowing by measuring the internal relative strength of an index or security and computing its rank among similar securities or indexes. Using color-coding, it visually identifies group and sector rotation.
Once you identify what to buy, “Charting” helps you decide when to buy. Charts indicate the “attitude” of traders toward the stock and group using MACD, Candle Charting, Group Strength, Revenue, Earnings Per Share and other important indicators.
Version 7
I described HGSI as having evolved into an Application Trading Platform. “Applications” are defined to mean trading methodologies developed by experts in the investment world or by customers using the platform to develop their own methodology. The chart below depicts the layout of the platform:
p12
The four Choose/Create Windows used in the Warehouse, Charting, Filter and Combo Rank have been redesigned to allow folders. Within each of these four windows there are a standard set of three folders: HGSI Applications, HGSI Classic and User. Each window is described below.
The User Folder: When Version 7 updates a Version 6 copy of HGSI, the Version 6 filters, views and combo ranks are moved into Version 7 “User” folders. Nothing is lost. Notice the consistent look of Version 7 windows in the snippets shown below. When Version 7 is installed new, filters, views and combo ranks appear in the HGSI Applications and HGSI Classic folders.
p13
The HGSI Classic Folder: In the Warehouse, HGSI Classic comes with a variety of basic ready-to-use views that are grouped into areas of interest. Each view is already setup with a HGSI Filter to scan the database and create a list of stocks. Each view also has a Combo Rank that will sort and bring the best choices to the top of the list.
Filters are important tools for data mining because they enable you to weed out all but the stocks that are most important to you. Think of data mining as a means of getting to the gold. Once you create a filtered list inside one module, you can open that filtered list in any other. A primary function of filters is to cut the Warehouse down to size. In order to keep the data simple enough to analyze, use filters to ultimately select a small number of stocks from 8000-plus, and a focus on a few groups from 154.
p14
Combo ranking computes weighted values for each data field selected by the user and then combines all the weighted values. If the user wants to overweight or underweight a particular data field, e.g., overweight EPS for the most recent two quarters, she has the ability to do so. Combo ranking values can then be displayed in two data fields called Combo Ranking and Raw Combo Ranking. Combo Ranking uses the same 1-99 ranking system that is used on other Ranking data fields. The Raw Combo Ranking data field shows you the value from the actual computation for greater accuracy.
The HGSI Classic Folder: In the SmartGroups, HGSI Classic uses the same Filter and Combo Rank that are used in the Warehouse HGSI Classic Folder. The difference is an index is created for each group and placed in the area of interest folder. With the indexes, you can perform comparative analysis. These SmartGroups lists are also setup to only give you the top 10 stocks. The Warehouse will give you the entire list.
p15
The HGSI Applications Folder: In the Warehouse, HGSI Applications is where you find popular advanced methodologies that have been developed by experts in the industry and implemented on the HGSI Trading Platform. Examples are Woodward and Brown, Larry Connors, and Charles Kirkpatrick. Apps are the growth area for the HGSI Trading Platform. More will be added and announced as they become available.
p16
The HGSI Applications Folder: In the SmartGroups, the HGSI Applications use the same Filter and Combo Rank that are used in the Warehouse HGSI Application Folder. The difference is an index is created for each group and placed in the area of interest folder. With the indexes, you can perform comparative analysis.
p17
Charting and Warehouse Windows: A new Quick Pick View Window that remains open, making all the Charting and Warehouse Views immediately visible for fast selection of different views. Just click on desired view to see it in the Charting or Warehouse Windows. These “floating” view windows are resizable and can be moved anywhere on your desktop.
The image below shows the Quick Pick View Button on the Charting Window and images of the Quick Pick Charting and Warehouse Views. The same button is on the Warehouse Window.
p18
Web-Help: This is a new documentation system for Charting Views, Warehouse Views, Filters and Combo Ranks provided with the platform. Select a specific view, filter or combo and press the web-help button. This will take you to a web page where videos, documents and other information about the filter, view or combo rank you selected will be provided.
p19
Each of the four Choose/Create Windows for Filters, Charting Views, Warehouse Views and Combo Rank has one of these buttons.
p20
Unchanged is the price of HGSI: $599 per year. Also unchanged is the trial which gives you:
- Sixty days FREE use of the software;
- Sixty days FREE data from Quotes Plus;
- Monthly newsletters;
- Educational articles by Ian Woodward containing details on HGS Investing;
- A series of getting started videos that teach you the basics of using the HGS Investor Software;
- Weekly Reports containing market analysis and HGS investing news; and
- Access to the HGS Learning Center containing tips and FAQ’s.
One of the best features of HGSI is that all updates/new versions of the software are free once you are a subscriber. A very flexible and powerful application is now even better and more user-friendly with this latest version.