Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0

Don't know if anyone is interested, but since I became an All Star, I thought I would post my strategy for CAPS selections.

 I look for stocks with fairly steady revenue and earnings increases year after year and prefer stocks that also pay decent dividends.  I mostly follow NAIC principles in choosing my stocks, though I also read analysts reports to see what they think, (especially reports by S&P that I get through my brokerage firm).  I put them all in a spreadsheet, (hence my game name), sort the spreadsheet to find the best ideas and then purchase the ones at the top of the list.  I also use my Top 100 as ideas for stocks to present to my investment club.

I get ideas from all over.  The S&P 5-star list, stocks I read about in news articles or hear about on TV news, stock picks by highly rated CAPS players, magazine articles, etc..  All get checked out and added to my spreadsheet.  Most of my ideas have been good.  Most of my losses, (though not all), have been due to corporate fraud, (phoney accounting, lies on SEC documents, etc. a la Enron).   By reducing everything to a math calculation, it helps take my ego out of the picture.  I don't always sell when I should, so that is something I am working on.  

I highly recommend forming/joining an investment club if you are not already in one.  They are good for comraderie, help make it easier to diversify your portfolio, can be a good source of investment ideas and gives you a group of friends to commiserate with if your picks go south on you.  I have been in one for about 5 years now and our returns are better than the S&P500 average, (though this hasn't always been the case throughout our history on a daily basis, but it is usually true on a yearly basis).  You can get ideas on forming investment clubs off of the Motley Fool or NAIC websites.

Good luck to all and I hope all your trades are profitable for you.

Craig 

Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.