Investing comparison:

We built a program that, based on the financial data, would buy a number of stocks from companies whose calculated price was much higher than the stock market price. The program bought stocks at January 1 2004 prices, and the amount of stocks per company was proportional to both the distance of the predicted (fundamental) value from the market value and the market cap of the company. The market cap factor was added to shield the model from very small companies that might exhibit abnormal behavior, tempting our program to buy a large number of unstable stocks.

After 4 months (April 30) we got the following results:

NYSE Composite : 0.4% loss.

NASDAQ Composite : 4.2% loss.

AMEX Composite : 3.4% gain.

Book value model : 4% gain.

Internal + Revenue model : 14% gain.

So, while the book value model just matched the performance of the AMEX index, the Internal Value + Revenue model showed great performance. Even if it was a "lucky" period for the test, there is a strong indication that fundamental analysis can help our investment strategy.