Stock Screen FAQs
I am a new investor looking to pick "perfect" stocks :)
Aren't we all? :)
The screen won't find the perfect stock for you, all it will do is to narrow down the number of stocks that you will spend time on doing due diligence (DD) research. There are some 8000 stocks out there and Mike narrows the number down to some seven or eight hundred weekly but even that is too many to have to study.
What the stock screen does is to narrow down the list by selecting those stocks that meet some of your desired BMW parameters. Once you have your short list, your next step is to do your DD before spending any money.
What is the best way to use this valuable tool?
First of all, you should be familiar with the terms we use to describe BMW Method stocks, terms such as RMS and RF . In the near future I hope to provide a BMW Method glossary explaining the terms.
To create a short list for study, enter your desired BMW parameters, for example, stocks with -2RMS or lower this week will create a list with 55 rows. By adding the requirement that the RF factor should be 2 or higher the list is reduced to 29 rows. If in addition you only want to see stocks with 30 years of price history, the list will only show 4 stocks, GM, MRK, KO and WMT.
In addition to the screening as explained above, you can sort the list by various concepts.
The resulting list will show the pertinent data for each selected stock and each row has two links. By clicking on the stock's ticker symbol you will link to Mike's BMW chart for the stock. By clicking on "Yahoo" you will link to the long term Yahoo chart. These links make it a bit easier to start your due diligence. You should not start spending money without first doing DD. The screen is just a starting point.
BTW, often it pays to relax some of the screening parameters just to see what will shows up.
The list changes very little from week to week so it pays to do quite extensive research on one or two companies each week and that way you build up a lot of knowledge about the companies and about the market. Much better than trying to skim over a dozen companies each week. Anything you learn about a company this week will be useful to you down the road when the price comes down to your range.
Where can I get more information?
See the BMW Method FAQs at TMF
Happy and Prosperous Investing