The Grail Equity Management System (GEMS) 

The Grail Equity Management System (GEMS) is a unique momentum and growth model, which was developed through years of research. Thereby it was realized that the conventional wisdom about risk and return was wholly incorrect, because it is based on a static model called the Normal Distribution Curve, see the first graph. However, the stock market histogram shifts continuously, and is normally assymetric, as the second graph below shows, favouring either the positive or negative side of the stock market average. Currently, the stock market has a 46.8 percent bias towards negative returns. How signifiant is this lopsidenness? Very! Because the risk metrics of the normal distribution curve can lead to wrong conclusions. For example, standard deviation, a key metric of volatility around the average, is the metric used to quantify risk, which is in a constant state of change, as shown on the Performance page. 

The Normal Distribution Curve misjudges risk


The Basis of Outstandng Stock Selection


To identify high grade stocks GEMS analyzes the drivers of their performance. The graph shows how this is achieved. The Grail Equity Rating System (GERS) applies 26 data points, which are weighted in terms of their relevance to Grail's search for high calibre alpha stocks. As earnings growth is the primary catalyst that drives stock prices 44% of the analysis concentrates on this variable. 

Click in graph to enlarge


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