Thursday, July 7, 2011

Work in Progress: Rule #1 Big 5s for ALL Stocks!

Just wanted to update you on what I'm working on right now.  I think this will be good news for those seeking new stocks in which to invest.  One of my readers, Brad, had suggested that I somehow automate my Rule #1 spreadsheet to go through every single stock traded in US exchanges and pump out a summary for them.  I took up the challenge and decided to further automate my sheet to do this.

What I did was added another tab into the spreadsheet.  There, I have in one column the symbols of all of the stocks listed in US exchanges (courtesy of Brad) and then I wrote a script to go through each and every one of them and look at their Big 5 numbers.  Since I have 1-year, 5-year and 9-year numbers, I decided to cook up an arbitrary formula to give each company a score.  As you know, Phil Town recommends that the Big 5 numbers be > 10%.  So, if a particular Big 5 number is > 10%, the company gets a score of 3 for it.  If it's > 0% but < 10%, it gets a score of 1, and if it was < 0%, it would get a -1.  I then sum up all of the Big 5 numbers and normalize it to be out of 100.  Since I do get "invalid data" once in a while for whatever reason, I just ignore that data point.  What makes a good company?  I think a score of 60 or above is a pretty solid company.

Figure 1: Updated Rule #1 Spreadsheet

One disappointment I had was that Google limits the run time of a script to be 5 minutes.  The spreadsheet takes about 5 hours to run through the script.  So, I'm painfully refreshing the script to go through the 6000+ symbols.  Once that is done and I've thoroughly debugged the sheet, I will publish the sheet along with its results for you.

I would imagine you would want to sort the score using descending order and just see which companies interest you.  I'm quite excited to see what kind of results I get.  This is really a lot better than using an off-the-shelf stock screener since there is really no Rule #1 screener.  Here, you just hit up the stocks with a high score and start your research there.  Since you will have access to the sheet formulas, you can also create your own formula as you see fit.

Hopefully, I will have it published by the end of the week!
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16 comments:

  1. AnonymousJuly 7, 2011 at 7:49 AM

    I'll be glad to help run the script if you want to divvy up the sheet.

    ReplyDelete
  2. AnonymousJuly 10, 2011 at 3:42 PM

    Hi Felix,
    I've been reading your post for a few weeks now with interest. Are you a software engineer? I've had similar thoughts, but didn't know how to get a script to actually extract the data. Someone did develop a similar application at: http://www.big5roi.com

    Good luck.
    fellow rule 1 investor

    ReplyDelete
  3. Felix WongJuly 10, 2011 at 6:09 PM

    Brad, I'm done with the script! Just need to find time to write the update.

    Rule 1 Investor, your guess was half right...I'm an engineer but not in software. Most engineers know how to code (I just happen to be a not so good programmer, so it took me some time to figure it out)...you'll see my update soon!

    ReplyDelete
  4. AnonymousJuly 10, 2011 at 6:53 PM

    Rule 1 investor, I took a look at the webpage that you suggested and it is very interesting. I haven't taken the time to really digest how they are analyzing the numbers, but their outcomes are quite a bit different then the one's using Felix's sheet. Any quick ideas why that would be?

    Thanks! Keep up the diligent work. I would be curious to exchange portfolio ideas sometime! Felix has done a good job with his accountability!

    ReplyDelete
  5. investing in stocksJuly 12, 2011 at 1:05 AM

    I study your web page that you suggested. I think your thought process is wonderful. The way you explain this chat is awesome.

    ReplyDelete
  6. AnonymousJuly 12, 2011 at 3:45 PM

    Hi Felix, Hi Brad C,

    I think there is quite a bit of variation when it comes to calculating the sticker prices. When we select our PE's and growth rates it's still an educated guess. Phil Town on his blog did the numbers on Amazon. He didn't think it was a buy. He used his experience to massage the growth rates. When I did the calculation based on the methods laid out in his book I would consider it close to being on sale.

    I would be open to exchanging portfolio ideas as well.

    Rule 1 Investor

    ReplyDelete
  7. AnonymousJuly 13, 2011 at 3:12 PM

    Hello Rule 1!

    I agree that it is all in how you play the P/E. Using Felix's sheet is a great starter because it allows for interactive values for the growth and PE. Most of the time I will modify a company if it seems out of line. Anything over a P/E of 20 I look at with squinted eyes because I just don't feel confident that a company could keep that value going. This ends up giving me more conservative views on many stocks than they probably deserve.

    Exchanging Portfolio ideas is a wonderful concept, but Felix, how would you see that working? Could we do it within the context of a blog post or would you rather keep yours free from outside influences??

    I have about 60 companies that I watch right now, waiting for the price to be right. I am expecting that number to probably triple once I've spent a little time reviewing Felix's stock sheet from this blog page. I mix about 75% value investing with about 25% day trading on the stocks that I know are good, but are volatile. For example I have come in and out of FSLR and SCCO a few times even though I am planning on holding them for a while. The other tickers that I favor are: goog, teva, skx, and rimm (yes I know this one is speculation).

    Cheers!

    Brad

    ReplyDelete
  8. Felix WongJuly 13, 2011 at 10:39 PM

    Guys...

    I checked big5roi.com out. The site is pretty slick...took a while before I figured out where to input the stock symbol. However, I found it a little inflexible. Naturally, I like mine sheet better! LOL!

    Brad, feel free to use this comment section to share ideas. I would to glad to see more comments here!

    You guys already know my list: GOOG, FSLR, SYNA, TRLG. I'm kind of watching ISRG.

    ReplyDelete
    Replies
    1. quoblackOctober 18, 2012 at 5:02 PM

      Felix,

      Awesome tool! I'm just getting started and am searching for wonderful companies. I like the stock list tab of your spreadsheet because it allows me to start with the Big 5 and work backwards to find the 4 M's. So, I looked up the 5 company symbols you posted above on the stock list tab and 2 of them don't show up. My question is, are there certain companies that don't show up on the stock list? And, what would be your suggestions for searching through the companies that don't appear on the stock list?

      Thanks again!

      Delete
    2. Felix WongOctober 19, 2012 at 9:41 AM

      Hey Quoblack! I used to have an entire list of 6000 symbols, but it's been a while now, and I don't knoww what ended up happening with it. What I probably did was created a short list of stocks with good scores. In any case, what I would suggest you doing is this. Go to here: http://goo.gl/TY5iA. This is a locked, clean version of the sheet. Click on File > Make a Copy. This creates a copy that is only viewable by you. Then, in the Stock List tab, enter in the symbols of the stocks that you would like to check, and then click on "Automation" > "Run Stocks - Start at Top". If you have many symbols, the script may time out, just click on Automation > Run Stocks - Continue from List. Let me know how that works.

      Felix

      Delete
  9. AnonymousJuly 24, 2011 at 9:34 PM

    Hi Brad and Felix,

    Sorry I haven't posted in a while. I also track about 50 or 60 companies. I will post some more of my favorites when I get a chance. Buffalo Wild Wings is one of my favorites. I like to trade options especially credit margin spreads.

    Rule 1 Investor

    ReplyDelete
  10. RegorJuly 28, 2011 at 12:00 AM

    Guys,

    Please check the site stock2own.com this is a rule 1 site.

    ReplyDelete
  11. investing in stocksSeptember 11, 2011 at 3:49 AM

    I don't think that people should not invest in stock markets. Many investors are getting profit by investing in the stock market. My cousin has got lots of profit but the investor should be careful and should have full knowledge of stock market.

    ReplyDelete
  12. AnonymousSeptember 20, 2011 at 5:46 AM

    Hello Felix,

    Any updates?

    ReplyDelete
  13. Felix WongDecember 4, 2011 at 12:20 AM

    Sorry...it took a while! Check it out: http://catholicinvestor.blogspot.com/2011/12/rule-1-analysis-spreadsheet-updated.html

    ReplyDelete
  14. QUALITY STOCKS UNDER 5 DOLLARSJanuary 25, 2013 at 8:00 PM

    I believe in using tools when evaluating a stock but its alway a good idea to keep the human elemant in mind.

    ReplyDelete

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