Wednesday, April 22, 2015

Perfecting Your Watch List - Compare & Contrast!

Recap

Last week I released the 3rd part of my 5 part series on building a better watch list.  In the last installment we started to examine the lower portion of my stock funnel which includes my list of variables to any further action.  This week we'll move further down the funnel so that we can explore a sample watch list I've put together.  If you would like a copy of the watch list just email me at investorspotlight@gmail.com and I'll send one over for you.


Tracking The Right Criteria

Over the last several weeks I have laid out a specific list of 9 criteria that make up my "must haves" for any stock.  To help you visualize these criteria, I've put together a graphic that you can download for your own personal use.  


Sticking to these core criteria means that only the strongest growth stocks should make it to the lower stages of your process.  It's possible even with the high level of filtration we're applying that multiple stocks will survive all the way to your watch list stage.  At this point, it's important to track the health of each candidate before moving on.

Track Your Candidates In One Place

Staying organized is critical to success when you're involved in the stock market.  Unfortunately, this can be difficult if you're using multiple tools in your research process.  For example, I use a physical copy of IBD in addition to tools that are delivered digitally so staying organized requires an element of discipline on my part!  

When I first started investing in the early 90's I found myself having to compile my data into spiral notebooks with my watch list stocks going on to 3x5 note cards.  If a critical component to a stock changed, I had to shuffle through my materials and resort to white-out to make my changes.  Thankfully, modern technology has provided us with effective alternatives so those days are long gone.

No matter which tools you employ in your process, track your actionable data in one place and keep it up to date.  If you need a starting point, I'm happy to help!

Perform Side By Side Comparisons

It's rare that you'll only have 1 candidate on your watch and it can be tough to run an apples to apples comparison given all the moving parts involved.  For that very reason, I put together a spreadsheet that lets me track up to 5 stocks at once.  With this, I can conveniently track all of my important criteria and perform a side by side comparison to determine the best possible opportunity for myself.
















The exact values of these criteria can change several times between when it goes on my list and when I take a position so having a document like this lets me easily keep things updated as new data comes in.  As I mentioned earlier, If you would like a copy of the watch list just email me at investorspotlight@gmail.com and I'll send one over for you.  

In the final installment of this series next week, we'll go through the last phase of my funnel - planning a trade!  I should even have some sample trade plans available so make sure to subscribe to my mailing list!



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DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.