A two-rule classroom book of cheapness and new highs

A one-name book for the school year

A senior social-problems unit spent a class hour on exchange listing symbols, then limited the selection exercise to two short periods. Those periods included a briefing on the allowed rules.

With prices moving sideways, each student chose one New York Stock Exchange common stock to hold for the school year. The model book was that collection of names, reviewed only at midyear and year-end.

A student holding ended if the chosen issue was later delisted, merged, or renamed. That listing-termination rule was the construction close when the listing itself ended.

Cheapness on a new-high gate

The only allowed gates were a new daily price high and a price-earnings ratio as close to ten as possible. Charts, graphs, and outside research files were not used.

Value investing, in this book, was a price-earnings gate that preferred listed common stocks priced near a ratio of ten, used to keep each pick inside a simple cheapness bound.

The momentum strategy was a timing rule that required a new daily price high before a name could be chosen, then held that name for the school-year horizon unless the listing itself ended.

The fundamental overlay was the pair of non-chart filters, valuation plus a fresh daily high, applied uniformly so every student name entered the same model book.

Sparse review and uneven print

Formal reviews occurred only at midyear and at the end of the school year. Students could follow quotes more often, but most did not.

Class copies of the newspaper were not identical, so a stack of back issues was used. Some printed prices predated the official start.

Familiar names and later listing events

Students clustered in familiar names, including AT&T, Mobil, and Goodyear. Others chose Banner. The instructor answered business-description questions but did not override picks.

At the midyear review, some names were missing from the listings or looked sharply cheaper because of mergers, a split, or other distributions that unmonitored holders had not tracked.

Waiting without a second screen

The stated classroom aims were to show that two objective rules could define a book, to treat a low price-earnings ratio as a fundamental overlay, to treat a new high as a timing filter, and to practice waiting by staying away from conflicting market commentary.

Commentary-insulation meant keeping selectors away from conflicting market letters so the two published rules stayed the only decision inputs.