Watch Lists
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Watch Lists Like many of your clubs, my investment club studies new stocks on a regular basis. We often find some, especially in markets like this one, that we think look like great companies, but are too expensive to purchase. I imagine many of you have had a discussion like we had recently. How do we keep these stocks on some sort of watch list? The problem is, even stocks on a watch list should be watched like stocks you own. If their price does change significantly, you want to make sure you understand whether it is due to some change in their business or just overall macro events in the market. This means that a long list of watch list stocks could easily become quite a stock watching burden. As we discussed this, one of my club members had a great idea. If we keep all of our watch list stocks in a Manifest Investing Dashboard, much of the work of keeping up to date on the companies is being done by Manifest Investing. Keeping an eye on the PAR values of all the companies we are interested in will alert us quickly to when it's time for us to be paying more attention and it might be our opening to purchase a good company at a good price. Here's the watchlist of stocks we've looked at recently that we thought looked interesting but were too expensive to purchase: http://www.manifestinvesting.com/dashboards/public/2Y93MW Thank you Manifest for keeping an eye on them for us! Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe While I love to use Manifest Investing for stock information, we like to keep track of when the stock was posted to the list and at what price and who suggested the stock. I made a Yahoo portfolio (sample attached) and set up a club id and password. We can pull the data for our club meeting and the current price is posted on the portfolio for us. Plus we can see the "good"and "bad" decisions we've made along the way! Thanks Judy! Do you also know you can get to your Yahoo watch portfolio directly when you're logged into your bivio club pages? You'll find a Yahoo button on the Accounting>Investments page that you can use to do that. Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe On Thu, Mar 22, 2012 at 11:02 AM, Judy Simonson wrote: While I love to use Manifest Investing for stock Hi Laurie, This is one of my favorite subjects, but I've been trying to decide what more I can offer than a dashboard at Manifest. I agree it's a good step to take.
But I don't agree with the premise that any one system provides us with 80% of what we need to know, whether it's the SSG or MI. It's that other 20% that can derail the best potential investment. So how, indeed, do we keep up with those burgeoning watch lists without becoming overwhelmed?
The Crow River club is constantly working on this issue. One member who still likes the SSG keeps our watch list and holdings list up to date with monthly prices and quarterly earnings reports. We give her discretion to change judgments too, since she tends to study the numbers more than the rest of us. Like it or not, the Toolkit Pert Report can be an immediate report card for stocks that are not meeting objectives - be it ours or analyst consensus estimates. It's a quick filter for us. "Pink" entries are put on notice. Those with negative quarter-over-quarter results are immediately removed.
Next, we try limit the number of stocks we allow on our watch list to no more than two for every stock we own (give or take). These are stocks we are committed to buying long or using as replacements, at a moment's notice, as long as the price is right. As members bring new stocks to the table, we need to determine which one it will replace on the current list. This is an ongoing contest, if you will. It makes it much easier follow a smaller handful of stocks.
Finally, I think every club needs to take a hard look at which metrics they actually use to make their final decisions to buy or sell. I have found that it can only be analyzed in hindsight by journaling our decisions. You will be surprised by the results. It's not typically what you think it will be. By concentrating in this issue, our group has been able to minimize our research efforts by dropping those things that never go into our decisions - like who's on the board, or what percentage of sales comes from Asia. Not that these should not be discussed - they just don't have to be tracked on a watch list!
If you have done your due diligence on the fundamentals, and you do minimal updating after each quarter, then you should be able to winnow down to a small handful of metrics (including the news) to follow on a monthly basis.
Finally, our club loves options! We have a spreadsheet of stocks we are watching for cash-secured puts that is more extensive and, subsequently, more cumbersome, than our smaller watch list. We put it in order by volatility and return and we continually study the cream of the crop. That's typically where our stocks to study come from for the main watch list.
Those are just a few thoughts on the subject. I, too, am interested in how others are managing these otherwise time consuming lists! Lynn Ostrem
Crow River Investment Club Dear Lynn, You make really good points. I would agree that a Manifest Dashboard isn't totally comprehensive, but in our club, we felt it was a quick and simple way to keep a birds eye view on companies we find interesting. I think you make a really good point about limiting the size of a watch list. You really don't need a lot of companies to make up a good investment portfolio. I think some people try and keep an eye on many more than are necessary. I do think that making options trades does involve more short term attention than picking stocks might. But, from talking to you and others, it sounds like it is worth the time! I too am interested in hearing about methods others are using for watch lists. Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe On Thu, Mar 22, 2012 at 2:21 PM, Lynn Ostrem wrote:
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