A little thank you to Warren Buffet

[DaKCMan AP]

Interesting article: http://online.wsj.com/article/SB1000...k-Picking+Code

It talks about a 'quality' metric for stock valuation. Basically, trying to look at profit margin instead of net earnings. Nothing new, really, but nonetheless.

Picking stocks this way isn't something you could pull off on a weekend morning in your pajamas. For each potential investment, you would need to subtract the company's cost of goods sold from its revenue, then divide by its total assets.

In general, says Mr. Novy-Marx, you want that ratio to be 0.33 or higher. You then would look for a low price-to-book-value ratio, available on most financial websites—ideally 1.7 or below. You would have to stick to big companies and diversify across many industries and dozens of stocks.

I just ran this quickly on a couple of stocks I own to see how they compare and may setup a play portfolio to track results based upon this metric vs. other valuation techniques.