Do You Have A Stock Watchlist?

If you’re anything like me, you haven’t bought a stock in a while.

I’ve found stocks that fit my strict criteria that were good enough to buy in recent years. But, they were too expensive.

When the market fell in March 2020 at a rate never seen in history, I found 7 stocks to buy. But the market rose too fast for me to buy them.

As of this writing my streak of not buying continues. And, it’s now been more than 6 years since I’ve bought a new stock in the portfolios I manage.

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I detailed much of this in the article I wrote you a few weeks ago – How You Can Research 3,943 Stocks In 40 Days – Manually.

What I didn’t tell you in that article is one of the most important things I’ve done in the last 6 years.

Continued building a stock watchlist so that I’m ready the next time the market crashes.

This watchlist now has more than 50 stocks on it. In 23 different countries worldwide.

When the market drops, I have this list and just need to read recent annuals and do updated analysis and valuations before I’m ready to buy.

This process takes me minutes or hours instead of days or weeks like sifting through the stocks manually.

Because of my strict criteria, for every 1,000 companies I look at, I only put 1 to 3 on my watchlist. So, this is the FAR harder and more time-consuming part for me.

Why?

Unless it’s a Benjamin Graham-type NCAV stock that is enormously undervalued. The stock MUST have the following criteria:

Operating profit margins consistently above 10%
ROIC’s consistently above 10%
FCF/Sales margins consistently above 10%
It must have a strong balance sheet with a lot of cash compared to little or no debt
It must have a competitive advantage now or the potential to build one

When I say consistently above, I mean for 5 years or longer.

There are more criteria. But these cover the bulk of what I look for to consider putting a stock on my watchlist.

Because far fewer than 5% of all companies on Earth meet these criteria, the process of finding them takes me forever.

But I now have around 50 of these stocks on my watchlist.

In other words, over the last six years one of the main things I’ve done is to continue preparing so that when the crash happens – whether that’s tomorrow or another 6 years from now – I’m ready to take full advantage.

How powerful is a great watchlist?

It’s one of the main reasons I’ve produced 23.5% average annual returns in the portfolios I manage over the last 9 years.

And the company I’m releasing a case study on August 17th about. It’s now up 1,209% since I bought it in the portfolios I manage. That stock started on my watchlist.

If you want to learn more about how to become a great value investor faster respond to this message and say YES and I’ll send you more info.

Always in your service,

Jason Rivera

P.S. If you’re ready to learn how to become a great investor faster respond to this post in the comments and say I’m in and drop your email address and I’ll send you some more info.

Do You Have A Stock Watchlist?

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