So many stocks…So little time

This is a practitioner’s post for someone looking for help to develop their own investment process, using a freely available resource: screener.in

Rule #1: Don’t f*** up

The financial newspapers have a section on them everyday – top ‘Buy’ and ‘Sell’ recommendations from brokerages. Financial news channels have a segment called something like “Top Trading Ideas for today”. During other segments, every interviewee, whether head of research at a brokerage / mutual fund house / hedge fund gets asked this question about top stock picks to invest, in India. They all oblige, with a fresh set of stocks (companies), every day, that will benefit from some overnight development, be it auto stocks with GST, export stocks with rupee devaluation, oil marketing stocks with oil price declines and so on.

Those new to investing, get swept up in the barrage of information, trying to keep up with what the “experts” say. Those who’ve been at it longer, know not to drink from the fire hydrant. If you’re a successful professional investor, you know the flurry of information is so damaging, you relocate to a different country and set clear rules of value investing for yourself.

As a broad rule, to not f*** up, Do not buy something because financial news media told you to.

While this awareness helps with the preliminary hurdle of not reacting to the whims of Mr. Market, it doesn’t solve the value investor’s problem.

If the stocks everyone is talking about are the wrong stocks given they are likely to have run up in price already, and if the right stocks are those that no one is talking about right now, how does the value investor develop his own list of stock picks?

Developing your investing “technique”

All unsuccessful investors are alike; every successful investor is successful in her own way – The Calm Investor

The first stock I ever bought was recommended to me by my father. I then added stocks from an industry sector I had worked in previously, thinking my superficial familiarity would be an advantage. But I knew this was really like a drunk man looking for his keys under the streetlight because it was too dark to look where he had actually dropped them.

What followed was the quest for the ideal process, from going top down (picking sectors then companies), going contrarian (looking for stocks at 52 week lows), even using price movements (gasp! technical analysis), to name a few. I was unable to develop any conviction in any of these methods, thus rendering me susceptible to switching back and forth, a sure recipe for disaster.

This was the time I came across the traditional investing tomes by Ben Graham – The Intelligent Investor and Security Analysis. These books provide the essential foundation of being able to think about the company behind the stock symbol, essential to be any kind of successful investor, and especially one that looks to buy low and sell high.

Books by Graham, annual letters sent to Berkshire stockholders are immensely valuable in equipping you to arrive at an opinion on the value of a given company and the pitfalls to watch out for. Taking the principles from those and applying the fantastic lessons from surgeon Atul Gawande’s The Checklist Manifesto : How to Get Things Right, I devised my checklist for evaluating potential investments; The checklist approach to investing

However, in a investment universe of thousands of companies, they do not give you the tools to know where to look to begin with.

Where / How to look

Peter Lynch’s One Up On Wall Street offered a way to think about potential investments from what you already know. Which led to this framework for thinking about buying your first stock, in the Indian market.

While the “buying what you know” framework is a great way to get started, it is limited to consumer-facing sectors, thus leaving out large parts of the investible universe. It also works mostly for companies you’ve already encountered, often, for a large part of your life.

What I felt I needed was a quick and dirty way to classify companies into the “Maybe” and the “Do not touch” pile. Only companies in the “Maybe” pile warranted further analysis and a deeper look at their business. For example, if a company’s interest payments have been increasing and account for the bulk of its pre-tax profits, as an equity holder, I have no interest joining the very back of a long line of those having a claim on the company’s earnings, irrespective of whether it is the next hot thing.

Unable to resist using catchy monikers, I called it the TCI Rapid X-Ray, outlined in a previous post with a similar theme: So many stocks, so little time – an approach to stock selection. I received a flurry of emails on this post asking to share the tool. However, the problem was this was a very manual process, involving importing financial statements into a google sheet template with formulae. However, this is an error-prone process and the output is not easily shareable. Also, when moneycontrol, the site from where I imported the financial statements changed their format, it meant having to rebuild my scoring template from scratch.

That was until I discovered the screener.in

Using screener.in to automate the TCI Rapid X-Ray

screener.in, as the name suggests, is a stock screening tool, i.e. a tool that users can use to filter stocks based on your set of metrics. Depending on your own philosophy as an investor, you can use a bunch of pre-defined screens or create your own. Users can add their own screens for public consumption. As of last count, there are 25 pre-defined screens. With an intuitive and clean interface, it is one of best screening tools for Indian markets.

But that’s not why I fell in love with the site. What blew my mind is how it let me automate my process of scoring any given company on the TCI Rapid X-Ray. Here’s how:

Entering the name of any company in the searchbox, takes you to a page with the summary about the company’s stock price performance followed by a peer comparison on key parameters and financials at quarterly and annual level. screener lets you download the financials in a neat spreadsheet by, you guessed, clicking the ‘Export to Excel’ button.

The Calm Investor | Stock Picking

Clicking the button downloads a comprehensive amount of financial information to your computer in excel format. Shown here the numbers for Voltas Ltd.

The Calm Investor | Stock Picking

I’m guessing you’re wondering what’s the big breakthrough here? A few different sites including moneycontrol let you access financial information, maybe not as conveniently.

Assessing the viability of any one of hundreds, if not thousands of potential companies would need sifting through the financial statements, to identify weaknesses. And the time taken to do that makes the task prohibitive for most DIY investors.

This is when screener.in gets really interesting. The site allows you to customize the excel download to your own requirements. I added a new tab to the spreadsheet, to summarize and calculate the key metrics I’m interested in. I added automatic formatting, and trends to literally get the picture in a glance.

The Calm Investor | tci-rapid-x-ray

So, after a bit of fiddling about, I’m able to use the comprehensive financial data from screener.in to develop a composite picture of how strong a potential investment the company is. Not much good if I had to do that for every company I wanted to consider.

This is where screener is brilliant. I just need to upload the new customized spreadsheet to screener using the link screen below.The Calm Investor | Stock Picking | Screener.in

Now, when I export the financials for any listed company in sceener’s database, I see my newly added tab with the summary scores! See below the download for another company (Lupin), automatically populated with the TCI Rapid X-Ray tab.

The Calm Investor | tci-rapid-x-ray | screener.in

There you have it. Now, when I come across the name of a company as a promising investment, before spending any time thinking about it, I open screener.in, download the customized excel report and look through the TCI Rapid X-Ray tab to decide if I want to go any further.

Email me if you’d like to utilize the TCI Rapid X-Ray template to upload to your own screener.in accounts and I’ll be happy to send it to you.

Edit (28 Aug, 2017): A newer version of the X-Ray template is available for free download here

76 thoughts on “So many stocks…So little time

  • October 3, 2016 at 10:53 pm
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    and this is a wonderful blog aboutt value investing

  • October 4, 2016 at 10:26 am
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    Sent Ajit. Cheers.

  • October 6, 2016 at 12:45 am
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    Please send it to my email

  • October 6, 2016 at 7:03 pm
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    Your blog is really amazing for a novice investor like me. Could you please send the file to me as well? My email is: sat_iyer@yahoo.com

  • October 6, 2016 at 7:36 pm
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    Thanks Satish. Sent you the template.

  • October 15, 2016 at 3:37 pm
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    Hi, thank you for this note. I have been using screener.in with my own version of a customized excel. Would be keen to see what parameters you track. Please could you send a copy of your excel to vigneshbabu.ram@gmail.com.

    thanks in advance!

  • October 22, 2016 at 10:42 am
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    Excellent writeup. Very useful for novice like me. Could you plz share the template with me. Thanks.

  • October 23, 2016 at 4:44 pm
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    Thanks Ramesh!

  • October 24, 2016 at 6:53 am
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    Hi, thanks for the post. Please email me the things rapid xray template.

  • October 24, 2016 at 5:40 pm
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    Kindly share the TCI Rapid X-Ray template. Thanks much in advance.

  • October 24, 2016 at 11:19 pm
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    now if you could show us foreigners which one of those many India stocks are to be bought, I would be all ears. High ROIC % – no debts – lots of free cashflow + surplus cash coupled to a PEG ratio no higher than 1 and a P/S lower than 1 would be fantastic. EV/EBITDA below 8 is a plus.

  • October 25, 2016 at 9:27 am
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    There’s a few India stocks (not too many given the recent run) that fulfill those criteria Alain. (except I’m not a believer in PEG given it is forward looking). Haven’t published my picks here though 🙂

  • November 19, 2016 at 12:05 am
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    please send me too.

  • November 19, 2016 at 7:54 pm
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    Hi, For past 1 year I have been reading the fundamentals of value investing. I am also a big fan of screen.in but I am not very fluent with excel sheets. So if you can you share your template on my email id: jha_1490@yahoo.co.in that would be great.

  • November 29, 2016 at 12:29 am
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    Excellent article. Keep up the good work. Can you send me the template.
    also . ramschari@hotmail.com. Also is the excel upload available in screener.in..cant locate it.

    Many thanks

  • November 30, 2016 at 9:41 am
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    Thanks Ram! Have emailed you.

  • November 30, 2016 at 11:22 pm
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    has anyone here received the excel sheet here?

  • December 1, 2016 at 9:04 am
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    Rishabh, everyone here (and who reached out by email) have received the template

  • December 6, 2016 at 1:53 pm
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    Wow, very insightful!! Exactly what I was looking for. Please share the template with me jvaibhavj@rediffmail.com. Many Thanks.

  • December 6, 2016 at 6:51 pm
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    Hi!
    I’m currently making the second mistake you mentioned – looking at 52-week prices to decide my buying strategy, and trying to include top-down “insights” from macro signals received from news. 🙂

    That line grabbed my attention, and I read through the article, which was tremendously rewarding.

    Please share the template with me – arunsreelalan@gmail.com

  • December 7, 2016 at 7:45 am
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    Email Sent.

  • January 16, 2017 at 11:15 am
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    thank u so much for the sheet sir…

  • January 16, 2017 at 10:44 pm
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    Can you share the TCI Rapid X-ray template with me

  • February 7, 2017 at 10:56 pm
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    Emailed to you Ezhilmaran

  • February 9, 2017 at 6:37 pm
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    You just added one more admirer.. please send the TCI Rapid X-ray template

  • February 10, 2017 at 9:57 am
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    Thank you, your website has introduced me to many concepts, applicable to real situations even outside investing. – Ezhilmaran S

  • February 26, 2017 at 2:53 pm
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    hi there,

    i would be interested, i hv used this site screener.in but what u hv presented seems interesting !

  • May 6, 2017 at 12:42 pm
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    Interesting post and catchy name for a template!! Can you share your template with me?

  • May 7, 2017 at 11:14 am
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    Thank you very much for sending the template.

  • May 7, 2017 at 11:23 am
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    Sent Vivek.

  • May 7, 2017 at 11:24 am
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    Thanks JJ. Emailed you.

  • May 7, 2017 at 11:24 am
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    You’re welcome Sir. Cheers!

  • May 7, 2017 at 12:15 pm
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    Sure. But need an email id to send it to my friend 🙂

  • May 31, 2017 at 10:14 pm
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    Hello Sir,
    I am new to investing and came across your blog. I read couple of your blogs and I must say they are really excellent. I am also interested in your customized template. Could you please share it with me at jijogk@yahoo.com
    Thanks in advance 🙂

  • August 16, 2017 at 3:47 pm
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    Hi, would appreciate if you could send it to me as well. Thanks. My mail id is, sridhar.kr@gmail.com

  • August 21, 2017 at 1:25 pm
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    Have emailed you.

  • August 21, 2017 at 4:12 pm
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    Hi Thanks a lot. I received it.

  • August 26, 2017 at 1:55 pm
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    It’s available for download. Please refer to the latest post on the site.

  • Pingback: Evaluating stocks with TCI Rapid X-Ray | The Calm Investor

  • August 27, 2017 at 11:06 pm
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    Nice one….request you to send the template

  • August 27, 2017 at 11:11 pm
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    Please refer to latest post on homepage. It’s available for download.

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