The poll results are in for the minimum market capitalization requirement for backtest on Fat Pitch Financials. In that poll I asked, “What minimum market capitalization do you prefer for backtests on Fat Pitch Financials?” The options respondents could choose were:
- $50 million (old minimum)
- $1 billion (new minimum to match S&P 500)
The most popular response was $50 million, with 52 percent of the responses. Here’s a full breakdown of the poll results:
If you add in the one vote for $10 million minimum, the $50 million category actually was about 57 percent. The proposed new $1 billion minimum got 33 percent of the vote.
Given these results, I’m going to revert back to using $50 million minimum market capitalization for backtests and I’m going to explore using a smarter liquidity test that requires a minimum dollar traded value over the past month versus a minimum average trading volume.