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Chapter 3. Screening

Screening is the most efficient way to find stock candidates because you can tailor the screens to filter out undesirable stocks, permitting you to focus your research on worthwhile candidates. Screening is an art that requires some 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.

Back in the Internet heydays, you had a choice of a dozen or so powerful search programs. But at this writing, the choice has narrowed down to only four screeners worth talking about:

  • Quicken

  • MSN Money

  • Multex

  • Wall Street City

Quicken's Stock Search (www.quicken.com) is the least powerful of the group in terms of screening parameters, but it has one big advantage: ease of use. You can learn how to use it in a flash, and run a quick screen whenever you get a hot idea.

MSN Money's Custom Screener (money.msn.com) is arguably the most powerful Web screener, but it will take you some time (think hours) to get the hang of using it. Once you've figured it out, it's relatively easy to modify existing screens or to add new ones. You can also save screens, an important feature that spares you the trouble entering your parameters every time you want to rerun a screen.

Multex Investor's NetScreen (www.multexinvestor.com) is in the same league as MSN Money's Custom Screener, both in terms of power and ease of use. I haven't counted, but NetScreen probably offers fewer screening parameters than MSN Money, but it's also a little easier to use. A big plus: Multex provides a step-by-step tutorial and you can print a list of available NetScreen parameters, something you can't do on MSN Money.

Wall Street City's ProSearch (www.wallstreetcity.com) works similarly to Quicken's Stock Search, except that it offers more screening parameters. It's a pain to use though. Once you run a screen, you can't modify a parameter and rerun the screen. You have to enter everything again. That gets old pretty fast. The premium version of ProSearch, which requires a subscription, doesn't have that limitation. It also offers more screening parameters. ProSearch, both the premium and free versions, offer a feature that's unique to Wall Street City. After you run a screen, you can see how much money you would have made or lost by running that screen up to 12 months before and buying all of the stocks that the screen turned up at that time.

You'll probably come up with plenty of your own screens after you've read this book. But here are a few samples to give you ideas, and to demonstrate how the screens work. The described samples demonstrate the use of the Quicken's Stock Search, MSN Money's Custom Screener, and Multex Investor's Net Screen. Wall Street City's ProSearch operates very much the same as Quicken's Stock Search.

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