The Bid & Ask

Quotations, Dispatches, and the Daily Tape

Thursday, August 13, 2026

The Method

Comparing companies against their peers

A stock has to look attractive compared to other names in the same industry, not just versus the market as a whole.

If we simply picked the highest-scoring names across the entire market, the portfolio would lurch from sector to sector. When technology is hot every slot would go to a software company; when energy rallies they'd all be oil names. That's a concentrated bet on whichever sector happens to be in favour, not really a stock-picking strategy. To avoid that, we compare each company against the average of its own sector before we rank anything. The names that make it into the portfolio are the ones standing out within their own industries — the best banks, the best industrials, the best consumer names — rather than whichever industry is loudest that week. That keeps the book diversified across the economy without giving up the edge from good stock selection.