Most great investors have a distinct ability to treat the markets as a “game”.  As a “game”, there are certain strategies and rules that will guide you in playing it correctly.  Whether you are playing tennis, chess, or investing in the stock market, getting the process right is as important as the results.   A consistent research routine is the first step in the investment process. Take for example, these quotes from two great investors, with distinctly different investing styles.


“I always regarded financial markets as the ultimate puzzle because everyone is trying to solve it…”

Michael Platt, Hedge Fund Market Wizards

 

 

“To me it is like a giant treasure hunt. Somewhere in here [he pats the weekly chart book] there is going to be a big winner, and I am trying to find it.”

 

David Ryan, Market Wizards

 

 

 

I used to get those same Daily Graph chart books (an early predecessor to MarketSmith) that David Ryan mentioned in the above quote.  Inside these books there was a “big winner” and the search for that winning stock was an exciting part of my investing process.  Finding that next leading stock early in its move is what we all strive for.  Each weekend I am using MarketSmith to scan the O’Neil database, searching for that next big winner.  It used to take me hours to scan the roughly 2,000 stocks that would show up in these weekly chart books.  The Reports and Screens that are currently available to us have reduced that time considerably.


(The Growth 250 Report and the William O’Neil screen are two staples we use in-house on a consistent basis.  They can be easily found with the  button in the upper right corner of the chart.)


 

I still spend a few hours on the weekend though as I enjoy the process of searching for potential great stocks. Besides the obvious financial rewards, the intellectual rewards can be satisfying as well.  Finding that next leading stock early in its move is what we all strive for, and a consistent and repeatable research routine is the essential first step to improving your process.  Between the Reports folder and any custom screens you might be using, you’ve got an excellent chance of finding that next great winning stock.  (Now handling it correctly is another story.) 


Try making an appointment with yourself every weekend to study the overall market environment, the individual stock charts, and the stories behind any of those charts that look interesting. 


I am certain there is a big winning stock hidden in our database and it is our job to find it.   

 

Happy Hunting,

Scott St. Clair

Senior Product Coach