Top investment gurus like Benjamin Graham, Warren Buffett, Peter Lynch, and Joel Greenblatt didn’t only help investors enjoy huge market-beating returns in their funds. They also left behind the keys to the (investing) castle: the methodologies they applied in their market-trouncing performance. They’ve written books, complete with formulas and strategies, that propelled them to the top of their games and gains. Tradestreaming aims to recreate these strategies as we pave our own way to outperformance.
Because a small number of expert investors wrote extensively about their investing techniques, we can now create complicated computer programs to reenact their strategies and apply them to today’s stock markets. Screening 2.0 is all about using smart technology to bring history’s best investors back to life.
Stock screens have been around for decades. Using screens, we can filter through thousands of investment candidates on the prowl for the ideal investment. Old screens merely searched databases of stocks using specific criteria (i.e. all large cap stocks with a p/e less than 20 and a growth rate over 7%). Unfortunately, for most investors, these screens fail — searching for specific stocks tells us nothing about the success of such a strategy.
Screening 2.0, lead by analysis and money management firm, Validea, allows us to recreate history’s best investment strategies, computerize them, and then look for stocks that guru investors like Ken Fisher and Marty Zweig would have purchased themselves. Screening 2.0 is the marriage of search technologies and artificial intelligence with quantitative investing.
Make sure you check out the Tradestreaming for the Internet’s best stock screening resources.
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Stock screens allow investors to sort through lots of different stocks in search for only the ones that fit certain criteria. Investors looking for the next stock pick for their portfolios can use basic screening tools, available at both Yahoo! Finance and Google Finance. MSN recently retired its highly-regarded stock screening tools, leaving what’s freely available somewhat lacking.
Screening 2.0, something I like to discuss on the site, provides the same outcomes but incorporates more algorithmic know-how, some artificial intelligence (how do you deal with an infinite P/E one year?), better ability to backtest results, and preset criteria to match results of the world’s best investors.
I decided to piece together a list of some of the Internet’s best free and premium stock screening resources.
So, here goes:
- Validea: One of my favorites and started by author of The Guru Investor, John Reese. Validea is a premium service that tracks screens preconfigured with the investing criteria of history’s greatest investors, like Buffett, Graham, Peter Lynch, Ken Fisher, and more.
- Finviz: Lots of stuff going on here. IMO, the most powerful, free screener available. With fewer preset screens, Finviz is for more advanced investors who have specific criteria they look for in stocks. A whole lotta descriptive, fundamental, and technical ways to sort for new ideas.
- Manual of Ideas: Mentioned in my post from last week, Top 6 Ideas for Piggyback Investing, MOI has both free and premium screens like 10×45 Bargain Hunter, European Value Report, Equities and Tobin’s Q. These screens come in form of subscription newsletters (again, some free, some premium) with more analysis included beyond the output of the stock screens.
- AAII Screens: Blown away by how many screens the American Association of Individual Investors has on its website (you have to join AAII to access these screens). You can find growth and value screens with preset parameters (like IBD Stable 70 and CAN SLIM) as well as guru screens that look for specific investment criteria established by famed investors like Graham, Buffett, Dreman, Lynch, Zweig, etc.
- Zacks: Nice combination of some free screens (Earnings & Margins, Growth and Income) and premium screens (Zacks Rank 1)
- CNBC: lets users save custom made screens and also has a few prepackaged screens for free
- The Kirk Report: Couldn’t be remiss in mentioning the great screens Kirk puts together for subscribers to his service. He calls his screens, the Stock Screen Machine.
- The Motley Fool’s CAPS: Nifty free screener that incorporates the community’s CAPS ratings into the screens. Allows users to download results to spreadsheets.
- Old School Value: Nice site with numerous free screeners for all kinds of value investing
- MagicFormulaInvesting: Built by the man, himself — Joel Greenblatt, this is a nice free site to do basic screening for stocks that fit the criteria of the Magic Formula
- AlphaClone: Of course, this hedge fund slicer-and-dicer is a stock screen of sorts. This premium product (read my review here) allows users to identify the top performing funds, peer into their holdings and backtest their strategies.
Insider Buying/ Selling
- GuruFocus: Interesting free and premium offerings that track top guru buys as well as insider transactions. Can download results into spreadsheets for more analysis.
- StockFetcher: Nice premium screen for technical investors encompassing Bollingers, Candlesticks, Moving Averages, and more. Output is downloadable to Excel.
I am SURE I left really good tools out — let me know in the comments if you think I should include something I’ve missed.