Constructing Winning Stock Screens
Over the years, we have studied the works of many famous and successful investors.
Our goal has been to learn from the winning strategies and techniques of investment legends, modern day investment professionals with a proven record of long-term success and even prominent academic research on investing. We have found that it is easy to come up with a list of meaningful screening criteria, but building and applying a cohesive set of criteria can be challenging.
Screening is the application of quantitative criteria to a broad universe of stocks in order to narrow the list down to a few companies. It allows you to focus your attention on a smaller but more promising group of stocks. It also forces you to use a consistent framework to decide which stocks to add or remove from your portfolio. Discipline is a common trait shared with the successful investors that we have studied. It is too easy to let our emotions such as greed, fear and even pride take over the decision-making process and ignore the rational side of investing.
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