About Reveille - Strategy, Discipline & Stock Selection
Over a thirty-five year career in the investment business, we have developed a strategy for assessing the prevailing trend in the financial markets and for investing accordingly. We rely on a combination of Technical, Quantitative and Fundamental analysis, market trends and identify promising sectors and industry groups. We then select specific stocks within those sectors that demonstrate potential for generating significant capital appreciation.
We place strong emphasis on those Industry Groups deemed most attractive while limiting emphasis on, or excluding altogether, market sectors deemed unattractive. For purposes of determining attractiveness of particular Industry Groups, We use the ranking from Investor’s Business Daily, published by Wm. O’Neil & Co. The O’Neil research identifies 197 distinct Industry Groups and ranks them from most attractive to least attractive using Relative Strength rankings. The key is to identify those Industry Groups moving up or down in the rankings versus other Industry Groups. Past studies have shown that most of the gains on a stock tend to come after it has broken into the top 40 in the rankings and that probably more than half of the reason for outperformance or underperformance is due to the Industry Group, not the individual stock selection. In other words, if you can get the Industry Group right, you’ve won half the battle. It is then that you focus on the best stocks in that group and go through the process of screening for those companies you want to own.
While Market Timing is not a part of our portfolio strategy, we find that the cash levels in our portfolio fluctuate depending on how many attractive names are turning up from our screens. As a result, cash levels tend to rise during periods of market weakness or downtrends. While timing isn’t a big part of what we do, we do believe it is important to know the secular and cyclical trends in the market.
In addition to a thorough Technical, Quantitative and Fundamental approach to stock selection, intuitive skills developed over a thirty-five year career and a study of history have proven to be valuable tools.
About the Author - John S. Wilson, CFA
John S. Wilson, CFA, is the author of Reveille, a Pre-Opening Market Wake-Up Call. Mr. Wilson began his career as a Financial Advisor with J.C. Bradford & Co. in 1976 and then joined Alex. Brown & Sons prior to moving over to the Sell side of the Street where he managed Trust Account assets both in the Equity markets and the Fixed Income markets and served as the Portfolio Manager of an Aggressive Growth Common Fund. He received his Chartered Financial Analyst designation in 1985. In 1987, he joined Morgan Keegan & Co., Inc. in Institutional Equity Sales and for ten years covered some of the largest institutional equity investors in the United States, achieving annual membership in the firm’s Chairman’s Club and promotion to Managing Director.
In 1998, Mr. Wilson formed the firms first Equity Strategy Group and served as Director of Equity Strategy and then Chief Market Technician, responsible for guiding financial advisors on market strategy and stock selection. He was a long-time member of the firm’s Focus Committee which was perennially at the top of the Barron’s rankings. He began writing Reveille in late 1998 as a morning commentary for the firm’s Financial Advisors and their clients and in 2013, he formed Boonshill Investment Partners LLC and started the web site, www.ReveilleLetter.com.
Mr. Wilson has appeared frequently on the Financial Television networks such as CNBC, Bloomberg and Fox Business Television and has written for the Wall Street Journal Online and Institutional Investor. His opinions are frequently quoted in various financial publications such as Barron’s. From its inception to now, Reveille has grown to be one of Wall Street’s most widely distributed commentaries with readers in the United States, Europe and Asia. It is available at www.ReveilleLetter.com.
Mr. Wilson is a past president of the Memphis Financial Analysts Society and has served on the board of directors of the Memphis, Nashville and now Chattanooga Financial Analysts Societies. He has served as a member of the faculty of the Seminar for Financial Analysis at the University of Windsor, Ontario and has taught at both The University of Chattanooga and Belmont University in Nashville, TN.
He is a native of Chattanooga, TN, where he graduated from The Baylor School. He received a B.S. degree in Economics from Vanderbilt University where he played on the Vanderbilt Rugby team. He served as an officer with the Military Assistance Command Vietnam. His wife, Susan, is an attorney and they are the parents of two boys, ages 14 and 20, both of whom enjoy hunting and fishing with their Dad.