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Investing
Site Odds & Ends
Here are some
odds and ends about sites or stock picking strategies that I’ve
described in recent columns.
Bankrupt
Contrarian
Last month I
described a group of 19 stock portfolios available on the Reuters
Investor site (www.investor.reuters.com).
The portfolios are updated daily using screens developed by Reuters’
Director of Investment Research, Mark Gerstein.
In the
column, I mentioned that Gerstein’s Contrarian Opportunities portfolio
was the most volatile, but produced the highest returns. Several readers
wrote to tell me that one of the stocks listed in the then current
Contrarian portfolio had filed for bankruptcy. Some of you even asked if
you should buy the bankrupt stock.
That incident
illustrates what every investor should remember about all stocks picked
by screening programs: Consider the results of any stock screen, no
matter how well designed, as a list of research candidates, not a buy
list.
Regarding the
stock in question, never buy a bankrupt stock unless you have solid
information that shareholders will not be wiped out in the bankruptcy
process. In most cases, when the company reorganizes, bondholders get
new stock and the old stock is worthless.
Portfolio123
Changes
In April, I described Portfolio123
(www.portfolio123.com), a site
that offers tools for automatically creating and managing stock
portfolios. You could develop your own buy and sell strategies, or you
could select from a menu of 24 pre-defined trading systems. Before
investing real money, you could run a simulation showing how much you
would have made or lost by following each of the trading systems since
March 2001, which is as far back as the site’s database goes.
When I wrote
my original column the site was still under development and everything
was free. Unfortunately, that is no longer the case. Now you must become
a paid member to access most of the site’s tools. Fees range from
$9.95 per month for an Entry Level membership up to $99.95 to access all
of its features.
But the news
isn’t all bad. Portfolio123 recently added a stock screening program
that, at least in my view, is the most powerful available on the Web to
individual investors.
It not only
offers more screening parameters than other search programs, but you can
combine two or more parameters into a single statement. For instance,
you can subtract long-term capital spending growth (one parameter) from
sales growth (second parameter) to come up with companies that are
spending adequately on new plants and equipment.
The number of
available screening parameters varies with the membership level
purchased. However, the parameters offered with the $9.95 Entry Level
membership should be enough to satisfy most investor’s needs.
Portfolio123’s founder, Marco Salerno, told me that he will soon be
adding a backtest feature to the screen, but using that will set you
back $39.95 per month.
O’Shaughnessy:
How Long?
Several readers wrote to ask how
long they should hold stocks turned up by O’Shaughnessy’s
Cornerstone Growth stock picking strategy that I described in a recent
column. As you may recall, O’Shaughnessy’s strategy, which has
produced market-beating results in good times and bad, is remarkably
simple to implement. All you have to do is list all stocks with
price/sales ratios below 1.5, and with earnings higher (by any amount)
than the prior year. From that list, pick the 16 stocks with the highest
percentage returns over the past 12-months.
What I
didn’t make clear in the column was that you are supposed to hold the
portfolio for 12-months and then sell the stocks and repeat the process.
Wall
Street City Going
Wall Street City (www.wallstreetcity.com),
one of the best investing sites, will cease to exist as of November 1.
That’s too bad, especially since I just featured WSC’s easy to use
Quick Search stock screener in this space a couple of months ago. Quick
Search, plus WSC’s powerful sector analysis tools, to my knowledge,
are not available anywhere else.
The Quick
Search screener’s most compelling feature was its ease of use.
However, I’m told that WSC’s ProSearch screener, which provides many
more screening variables, will still be available on the Business Week
site (www.businessweek.com).
To get there from Business Week’s homepage, select Stocks
on the Investing menu, and then scroll down to the Investing Tools
section and click on Stock
Screeners.
Note: as of 1/17/07,
Business Week's screeners were no longer available. You can run similar
screens using MSN Money's Deluxe Screener (moneycentral.msn.com)
or Reuters Investor's PowerScreener Lite (www.investor.reuters.com).
MSN's screener requires downloading special software and Reuters'
screener requires registration, but both are free.
WSC’s
portfolio tracker, which allows you to track a variety of fundamental
factors such as insider trading and analysts’ buy/sell ratings for
each stock, will also still be available on the Business Week site. In
fact, Business Week’s version is better, because it also shows you
S&P Star rating for each of your portfolio stocks that S&P
follows.
As with the
screeners, you can access Business Week’s portfolio tracker from its
Stock Tools menu. Business Week doesn’t charge for these features, but
you have to register to use its portfolio tracker.
Wall
Street City’s demise continues an unfortunate trend. Many great
investing sites were established in the late 1990s when nobody worried
much about a site’s ability to turn a profit. Now reality has set in.
One by one, most of the free sites are disappearing or converting to a
subscription model.
published 10/17/04 |
