Quantitative Managers Quantitative Managers
They observe historical quantitative relationships and incorporate these relationships into "models" which help them choose their stocks. Using a computer to sift through historical data on companies is called "screening". A quantitative manager might prepare a program to screen two thousand stocks according to a particular set of characteristics or parameters. For example, she might establish that, historically, stocks with low price-to-earnings ratios and high growth rates of earnings over two years outperformed the market for the next year. This historical observation of performance is called "back testing" of a model. Based on the strength or "robustness" of this relationship, she then would select stocks that currently met these "criteria" or tests.
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