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Stock Picking

This document discusses how computers and online services have revolutionized stock research capabilities for amateur investors. It describes how investors now have access to up-to-date analyst reports, company financials, news articles, and screening tools to search for stocks that meet customized criteria, like companies with no debt and growing earnings. This level of access marks a dramatic change from the past, when investors relied on monthly publications and occasional broker reports that were often outdated. Computers have empowered individual investors by putting vast amounts of real-time stock data at their fingertips.

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Piyush Choudhary
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21 views1 page

Stock Picking

This document discusses how computers and online services have revolutionized stock research capabilities for amateur investors. It describes how investors now have access to up-to-date analyst reports, company financials, news articles, and screening tools to search for stocks that meet customized criteria, like companies with no debt and growing earnings. This level of access marks a dramatic change from the past, when investors relied on monthly publications and occasional broker reports that were often outdated. Computers have empowered individual investors by putting vast amounts of real-time stock data at their fingertips.

Uploaded by

Piyush Choudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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APPENDIX ONE

Stockpicking Tools

It wasn’t long ago that amateur stockpickers had a hard time following the fundamentals of the
companies whose stocks they owned. Analysts at the brokerage houses were scurrying around, finding
out everything they could, but this information rarely reached the client. If a brokerage house changed
its recommendation from “buy” to “sell,” the small-time customer was the last to know.
If you asked for it, your broker might send you an analyst’s report on a company, but these reports
were often several months out of date. Amateur investors had to rely on the quarterly and annual
reports put out by companies themselves. They also made frequent trips to the local library, where
they pored over a publication called Value Line. Value Line gives a one-page rundown on hundreds
of companies and is packed with useful information—it’s an excellent resource even today. Make use
of it if you can—if you’ve got a stockbroker, you can probably get the Value Line reports from him or
her.
In the old days, your research was limited to Value Line ; Standard & Poor’s reports, which are
similar to Value Line, but with less opinion; the occasional analyst’s report from the brokerage house;
and the material that arrived directly from companies. Computers have changed all this. There’s been
an explosion in financial data that’s available on computers. Every day, some new information
service makes its debut—and many of these services are free.
Computers have made the stockbroker into a much more valuable resource. Instead of mailing you
an out-of-date analyst’s report or a page from Value Line, a broker can now pass along all the up-to-
date information that shows up on his monitor: the latest word from the analysts, news flashes, the
latest earnings estimates for thousands of companies.
If you have a home computer, you can get all this data on your own, without a stockbroker. This is
another area where kids have an advantage over grownups: they already know how to use a modem
and tap into on-line services, such as America Online, Prodigy, or CompuServe.
On-line services can give you an instant readout on stock prices at any time of the day or night, so
you don’t have to wait for tomorrow’s newspaper to find out what happened to your stocks. But
tracking the prices is the least of it. You can also get company reports, industry reports, news
releases, and screens.
Screens are a wonderful invention—a computer dating service for stocks. You tell the computer
what you’re looking for—a company with no debt, for instance; or a company with no debt and lots of
cash whose earnings are growing at 20 percent a year; or a company that’s losing money, has no debt
and lots of cash, and sells for less than three dollars a share. In seconds, the computer spits out a list
of names of companies that fit these descriptions. Before we had computers, it would have been
impossible to search the universe of thousands of companies to find the few that meet our
requirements. Now, it’s easy.
You can set up a screen for almost anything: companies that have raised their dividends for twenty
years in a row, companies that have increased their earnings twenty years in a row, companies where
the dividend yield exceeds 6 percent a year, and so forth. It’s a whole new way to approach stocks.
Instead of looking for good investments in the mall, you can look for them on-line.
Along with the explosion in on-line services, there’s been a surprising turnabout in investor

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