Susan Levermann Strategy – 13 rules that work on the stock market

On the 8 of March, the international Women's Day we review the strategy of Susan Levermann, a highly successful portfolio manager. Hollywood shows the Wall Street as a typically masculine domain. However, Frau Leverman has proven that a smart and persistent vixen may be more successful than an impudent and impatient wall street wolf.

Susan Levermann is surplisingly little known outside of German-speaking countries. There is no article about her in English Wikipedia. Neither is her book "Der entspannte Weg zum Reichtum"(the relaxed way to wealth) is translated into English. We try to fill this gap.

Susan Levermann's approach is based on 13 scoring factors, which are as follows:

Factor +1 0 -1
1) RoE >20% 10% - 20% <10%
2) EBIT-Margin* >12% 6% - 12% <6%
3) Equity Ratio** >25% 15% - 25% <15%
4) P/E current year <12 12 - 16 >16
5) mean P/E 5 Years <13 13 - 16 >17
6) Analyst Opinions >2,5 1,5 - 2,5 <1,5
7) Reaction to quarter number >1% -1% - 1% <1%
8) Profit revision >5% -5% + 5% <-5%
9) Price change for 6 month >5% -5% + 5% <-5%
10) Price change for 12 months >5% -5% + 5% <-5%
11) Profit Growth >5% -5% + 5% <-5%
12) Momentum  +1 if factor 9=+1 and (factor 10=0 or -1)
-1 if factor 9=-1 and (factor 10=0 or +1)
0 otherwise
13) Reversal Effect  +1 if better than the benchmark. 
-1 if worse than the benchmark.
0  otherwise
*N/A for financial assets they get 0
** For financial assets: +1 if >25%, -1 if  <15% and 0 otherwise




These rules are notable not only for their plausibility and simple logic but first of all because they worked not only for Mrs. Levermann. One of the most successful wikifolios is Qualität, angelehnt an Susan Levermann (Quality after Susan Levermann). A guy who run it honestly admits that he has not so much experience with the stock market (ich besitze nicht viel Erfahrung mit dem Aktienmarkt). Still he managed to make +257.5% in 5 years (by the maximum drawdown of -21.6%)

Like this post and wanna learn more? Have a look at Knowledge rather than Hope: A Book for Retail Investors and Mathematical Finance Students

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