Now quantitatively we rank things on something called alpha over standard deviation, which is the return independent of the market divided by volatility. Usually, to get a high ranking, you need some buying pressure.

There are several things that can create an alpha - stock buybacks are one. High dividend yields are another, especially nowadays because the stock market yields more than the banks and the tenure treasury. But by and large, it tends to be companies with a strong cash flow, rising sales, accelerated earnings, a profit margin expansion.

We really believe in the earnings. We're very proud that often we do well in the down market. But you know, there are some markets where they just lose liquidity, like 2001, 2008.

We call it the zigzag theory. You want to find something that zigs and something that zags and blend them together to get a better combined performance.

I grade my stocks. I'm what they call a quant, one of the geeks of the stock market.

Our system is dynamic, always shifting gears. What I do is I build models to beat the market.