How We Calculate the DipBuster Score™

The DipBuster Score is a 0-100 composite combining five distinct signal categories, each backed by academic research into what actually predicts stock outperformance. Here's exactly how it works.

The Five Components

Why These Five?

Each component maps to a body of academic evidence. Graham's NCAV gets the highest weighting (35%) because it's the most robust signal across the longest time horizon — 90+ years of evidence across multiple markets and cycles. Insider activity (25%) comes from Seyhun, Lakonishok and others who demonstrated that open-market purchases by company insiders reliably predict outperformance.

Social momentum (15%) is more speculative but reflects real market dynamics. Retail attention creates buying pressure, and early detection of momentum can improve timing. We weight it lower than fundamentals precisely because it's a shorter-term, less reliable signal.

Earnings Quality and Price Momentum (15% and 10% respectively) act as filters. They don't drive the score but they prevent us from recommending fundamentally impaired businesses or stocks in clear downtrends.

What Score Means What

Scores above 70 represent stocks where multiple signals align simultaneously — deep NCAV discount, insider buying, and reasonable momentum. These are the highest-conviction situations. Scores of 50-70 represent interesting watch-list candidates with one or two strong signals. Below 50 suggests the stock doesn't meet our criteria in any meaningful way.

Methodology subject to ongoing refinement. Past performance of DipBuster Score thresholds does not guarantee future results. The score is a screening tool, not a buy recommendation.