Search smarter, not harder

The holy grail of screening

The holy grail of screening results (cheap, high growth rate, enticing MELUDI industry, strong market position, low political risk, and a promising stock price chart in terms of relative level vs recent history and momentum at the same time) is rarely found in practice. Instead, try to come up with unexpected, unusual combinations for inspiration, and then continue to dig deeper into their financial accounts (Income Statement, Balance Sheet, Cash Flow Statement).

Screening for stocks is a practical skill that needs practice

You need to practice and refine before making actual investments based on simple filter settings: So, screen, make hypothetical investments, and evaluate what worked well and what didn’t. Then experiment with your search methods to see if you can find better filter settings.

Broad screening only turns up candidates for further research and forecasting. You can’t expect to find money in the street from simply looking for above average growth and below average valuation multiples! What you tend to find are value traps that are cheap for a good reason (but not always). Some gems actually are hidden in the Low P/E or Low P/S camp, but others hide in the High multiple lands, or in the boring middle. It all comes down to what the plausible expectation of durable future earnings growth is in relation to the valuation multiple.

Outsourcing your screening (but not your research)

As a complement to making the screening yourself, you can find inspiration in what others are buying in tools like HedgeFollow for example. There you’ll see what the biggest funds and professional investors are betting their and their clients’ money on. Note: Don’t follow their lead blindly (since they also make mistakes of course) but take their choices as a good starting point to make your own research.

Building a Valuable Watchlist of Stocks

After finding stocks (e.g via screening tools or financial websites) you should collect them over the long-term in different categories of similarity. This will expand your options and significantly increase your chances of finding undervalued stocks.

You can use a variety of different tools to build your watchlists. Excel and Google Sheets are the most common and simplest. The Investing Course teaches you advanced methods for collecting up to thousands of stocks (for free) in Google Sheets and even gives you powerful templates you can use to structure your lists to rank collected stocks by order of priority.

This knowledge, alone, is worth more than the price of the entire course if you implement it and stick to it for the long-term.

• Week 1: Valuation
• Week 3: Business Analysis & Forecasting
• Week 4: Timing Your Investment
• Week 5: Portfolio Management
• Week 6: Case Studies