By Dave Wallace
RIVER BENDER - October, 1999
There's no question about it. The Internet has unlimited sources where investors can research investments before they buy and most of it is free. After learning how to navigate the Internet and recognize valid information from junk one can almost become as smart as their stockbroker. Online trading is the next step but that's a separate discussion. For now let's talk about using the Internet to research stock and mutual funds to determine what might be a good investment.SEARCHING FOR STOCKS
Have you ever wondered how nice it would be to search quickly through thousands of stocks or mutual funds using your own criteria? Like perhaps finding all companies with earning increases greater than 20% annually over the past five years, or perhaps that have a PE ratio less than some number or a yield greater than some percent? Well, we're there. You can make such a search on the Internet now.
INVESTMENT FINDER
Microsoft has a service called MoneyCentral's Investment Finder. It is considered the most powerful web-based stock-screening tool available because it has the sort of tools professionals pay hundreds of dollars per month to use. Until last July, Investment Finder cost $9.95 per month but Microsoft has now abolished all fees. Why they did they do this? I have no idea but I love it. Take a look at:http://moneycentral.msn.com/investor/finder/welcome.asp
It's not possible to describe all the stock and fund parameters that one can research at Investment Finder. The database is huge and very powerful and I'm still learning how to make searches. For years I've chosen stocks using indices in the Investment Business Daily (IBD) newspaper and invest only in those that have over 90 for both the EPS index and a Relative Strength index. IBD, by the way, is the only source for such data. Unfortunately one can't buy the paper on a newsstand in New Bern so I have to beg, borrow, or steal a copy from a broker. I'm hoping now to develop search criteria in Microsoft's Investment Finder that will end up selecting the same stocks I would have selected using IBD.
Basically, Investment Finder has two methods of searches for stocks or mutual funds. You can use one of their several predefined searches or you can do a custom search selecting your own criteria.
PREDEFINED SEARCHES
For example, you might use a predefined search to produce a list of the highest-yielding stocks in the S&P. Or you might use it to produce a list of stocks in the DOW with the highest dividend yield, lowest P/E ratio and lowest price. With such information you could then apply the "Dogs of the Dow" theory of investing. A particular search I like is called the "Investment Matcher" where I enter a stock symbol for a company that I already like and receive a list of companies having similar market capitalization and projected earnings growth.
CUSTOM SEARCHES
In custom searches of Investment Finder one has the choice of some 70+ parameters to choose from, most of which can be set up with "greater than, less than" numerical values. However, before you can utilize the parameters effectively, you'd better understand what some of them mean, like PE, ROE, ROI, ROA, beta, etc. In other words, if you're going to select stocks like a professional you'd better learn the language. I'm impressed with Microsoft's Investment Finder and know that serious investors will probably feel the same.
DOWNLOADING STOCK PRICES
There's a myriad of web sites on the Internet where one can get stock and mutual fund prices, including Microsoft's MoneyCentral site. Most web sites permit you to list and save your portfolio and even download prices to your spreadsheet. The web site I use for prices and where I keep my portfolio is http://quote.yahoo.com. Downloading of prices was discussed earlier in my article on spreadsheets.