3. Screening

Stock screeners are programs, usually accessed through websites, that allow you to search the entire market for stocks meeting your specific requirements. Screening is the most efficient way to find stock candidates, because you can tailor your screens to filter out undesirable stocks, permitting you to focus your research on worthwhile candidates. Screening is an art that requires practice to get it right. When you first try a new screen, it will turn up too many or too few candidates. When you get the right number—say, 20 or so—you’ll find that you don’t like most of them. Eventually you’ll devise a set of screening parameters that gives you a manageable list of candidates worth researching.

While many financial websites offer ...

Get Fire Your Stock Analyst!: Analyzing Stocks On Your Own, Second Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.