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Stockllama10 (59.36)

The Stock-Screener Line...plus, chickens

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February 10, 2014 – Comments (1)

Okay. Let's say you have ten thousand chickens and your task is to pick out the good ones, or you'll be executed by your "fair and loving" dictator.

Okayquickdoitnow!

Anyways, let's say you have a magic bag. You'll dump the chickens in, and all of the chickens that don't fit your criteria of good randomly disappear. So you dumpt he chickens in the bag, and tell it to find chickens of a certain size, nad without any diseases, and that don't have one Direction stuck in their heads, and have good egg-laying capacities. Life is good. 

 

But wait-can't chickens keep growing? Can't they grow into the size later or out of it? What if a chicken has a minor disease and the other one is healthy but will get cancer on Thursday? What if a chicken has equally annoying bands stuck in their heads? Define good egg-laying capacities. And how did you get ten thousand chickens into a magic bag anyways? Some probably escaped. And-

 

So it is with stock screeners.

 

Where's the line you have to draw between "tight enough to weed out obvious 'no's" and "loose enough to keep in stocks with an interesting story?"

 

For example, you want stocks with P/Es under 15. Congrats, you missed out on a bunch of awesome tech companies.

 

Or you want stocks with P/CF of under 9. Congrats, Apple's P/CF is nine exactly.

 

So where's the line? Depends on how much work you want to do.

 

The less work you want, the more tight you must make your screener.

 

If you really want to be thorough, you'll have more work. That's given, because you have to analyze each company. So the less work you want, the tighter your screener restrictions, and the less you care about amount of work, the looser.

 

Am I right? Tell me on the comments. 


 

1 Comments – Post Your Own

#1) On February 11, 2014 at 4:26 PM, lemoneater (71.78) wrote:

I love chickens! When I was about 10 years old Amish friends gave me a chick which grew up to be a gorgeous gold and green rooster. Nowadays I just dream about having some chickens and go to  http://www.mcmurrayhatchery.com/index.html when I need to see some inspiring chicken photos.

I might use screeners for ideas if I have a specific gap in my portifolio that I want to fill with a stock of a particular dividend yield or market cap or country. A high dividend screener did turn up PLOW which I may end up getting a small position in. But as a rule, I do not rely that heavily on screeners because the stock's story is what I find compelling. Is it a growth stock in a relatively new market niche like LWAY? Or is it an industry leading semiconductor stock with a generous dividend like Xilinx? 

 

 

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