Magic Formula Investing
Where to find value investing ideas?
So you read a couple of value investing books and are ready to put that new knowledge to work, so where do you find that next home run stock? Below are some sources you should consider. The list below is in no particular order; feel free to add to the list.
- Print Media
- Forbes
- The Wall Street Journal
- Barron’s
- Fortune
- Business Week
- Sunday LA Times
- Forums
- William Spetrino Jr.’s Value Investing Forum
- Fool.com Boards (Boards are now Free!)
- Screens
- Magic Formula Investing
- Kiplinger’s Stock Finder (predefined screens)
Those are my sources for finding potential investments. I tend to use the Los Angeles Times Sunday edition and the Magic Formula Screens the most. Most (if not all) major newspapers have the P/E next to the stock symbol’s price. It is very easy to go down the list and highlight companies that are trading below the market’s P/E. I tend to highlight P/E’s lower than 18 and do individual analysis during the week. It is pretty expensive to subscribe to most of the print media available. A visit to the local library will do the trick. I have the luxury of having access to the school library that allows me to check out the day’s newspaper for free.
Stockpickr.com is the premiere website to find out what the Guru’s have been buying. They have improved their website layout and are constantly updating their picks. Stockpickr.com also tracks holdings of value investing hedge funds. Warning, following gurus blindly is very dangerous. It is highly recommended you do your own stock analysis before piggybacking.
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