No. of Recommendations: 2
These stocks passed all my tests but insider ownership.


The problem with any screening method is how to decide on the “borderline” cases, and only two responses are possible:

(1) “Go/ No-Go” (in which no exceptions to one’s rules are ever made).
(2) “Discretionary interventions” (aka, intelligent exceptions to general policy are made).

Choose one or the other and then write it into your investment plan. But don't try to straddle the two. Choose one, or the other, and stick with it. In the investing game, consistency matters, and it is what separates winners from losers over the long haul. No method always works. But losses are assured if an investor jumps from method to another when problems arise. The problems have to be endured in order to get to the situations when the method comes back into its own.

- What's the downside of a 'Go/No-Go' approach? When investing opportunity are few, you're going to be on the sidelines.

- What's the downside of a more "flexible" approach? When investing opportunities are marginal (in therms of their risk/reward ratios), you are likely to be taking on more risk than you bargain for and, hence, are increasing your overall failure-rate.

One, or the other. But understand the consequences of each choice.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.