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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch ✹🐝🐝 BRONZE
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Number: of 12793 
Subject: Re: OT: big companies
Date: 08/09/2023 4:56 PM
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Another interesting screen Jim. From a screen logic perspective, would it make sense to eliminate financials (like you have in other screens) since banks and insurers are required to keep a chunk in cash?

That makes some sense, but it's not really necessary.
The typical bank has much less cash on its balance sheet than it has long term debt.
There are some outliers, but it's typically 1:2 ratio these days.
The really cash rich non-bank companies tend to crowd them out of the screen.

If you look at the recent picks I posted, there are no banks in the top 40, and only one investment bank.

Since they are such a minority of the picks it makes very little difference over time whether you filter them out or not.
In backtest, the difference was 0.14%/year...and the higher number was for the version allowing financials.

Jim
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