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History and Evolution
Frank Volkers authored the Top Stock System in 1993. He and his son, Kyle, are the primary continuing
developers of this stock selection system. Both
are financial consultants with The Volkers Group. Their work is supported by several of
their staff. In 1992, Volkers experienced the
difficulties that can arise when one relies heavily on the research recommendations of
only one or two top analysts. After two
specific investments generated a significant loss and a missed opportunity for clients,
Volkers was convinced that recommendations should come from all different viewpoints
(fundamental, technical, and momentum), and from a larger consensus of opinions.
He observed two major failings of
consultants and
investors: 1) selling successful stocks too soon and 2) holding on to unsuccessful stocks
too long. Taking an analytical approach, he
began writing his own computer program, setting the criteria that would create a filtering
process for stock selections, and the Top Stock System was born. He integrated the stock system with his
computerized economic model, on which he began work in 1974.
The current version of the stock selection system is Release
8. Revisions are made about every
two years, as
the recommendation logic is modified to learn from the recent past. Until 2000, the system had not experienced a bear
market. Release 6
(completed February of 2001), Release 7 (completed May
of 2003), and Release 8 (completed June 2004) incorporated several techniques to address declining markets. Because of these revisions, actual results of
users, though impressive, vary considerably from the current model which reflects what
would have happened if the current release logic had always been in place.
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