Tools for Investing

Your Local Library

First and foremost, before you start looking at all of the tools I recommend below, visit your local library and see what tools they might have for you to use, free of charge. For me, my library has newspapers like The Wall Street Journal and Financial Times as well as web resources like Premium Morningstar.com and ValueLine. These tools make great additions to any repertoire. However, if you don't have a local library system or if it just isn't convenient for you to get there, you can use all of the tools I mention to supplement.

Web Resources

Morningstar is my number 1 pick because you can get a snapshot look at how your prospective investment is doing. Like I mentioned earlier, you may be able to get a premium subscription through your local library system but do not discount this website if you cannot as it is an absolute treasure trove of information.

Navigate to morningstar.com and in the upper-left-hand-corner, you will see a search bar to find your prospect Because names can be used and re-used, I type in the symbol I am looking for. Once you do, you'll see your search results and, most likely, your company/ETF/mutual fund will be the first option. You will click on that name and that will take you to the site for the pick. Once here, they will tell you how much premium content you are missing and why you should buy it. I'll be honest, it is good stuff and it can be addicting if you can see it but you don't need it to be successful.

Next to the graph at the top is some KPI, or key performance indicators, which give you a snapshot look at how the prospect is doing. Clicking on the "Key Ratios" button will give you an option to see "Full Key Ratios Data" and this is where they store the gold. It isn't sexy, unless numbers are your thing. If so, it is erotica. Don't make this dirty.

Most likely, when you open a brokerage (investment) account, your broker will provide some screening software to you but before you get that far, if you want to start researching ahead of time or if you just like the options of this screener better (they don't all give you the same options), then Finviz is for you.

If you take a class or read a book that helps you refine your picks to stocks meeting a certain criteria, you can use Finviz to set that criteria and they will whittle down the potential picks for you until you just have a small number of companies, ETFs, or Mutual Funds to research. As you look through this short list, you will find that you can click on any specific line item and it will give you a great deal more information about the company, including any press releases or news items with information regarding this pick.

Macrotrends is a damn cornucopia of information. The biggest problem here is you are as apt to get lost as you are to find metaphorical gold. While this site can do so much, I have yet to scratch the surface and primarily use it to derive the fair market value (FMV) of any given stock. I'll do a whole post on how I calculate it sometime but in the meantime, I can give you the quick and dirty (that's right... this is the time to get dirty). 

First and foremost, we are only searching stocks, not ETFs, not Mutual Funds. Just stocks, my dude. Alright, in the search box (you cannot miss it), type the symbol for the stock we are going to look at. Let's check out DIS, a small niche company you might have heard of. Now many of you won't read this line before you hit enter and for those of you who did... go ahead and go back to the main page. Let's type DIS again and not press enter this time. Seriously, I do it half of the time (maybe more). Ok, so we see some options should appear below the search bar and we want to click on the one that ends in "- Revenue". 

On the following screen, we will get the option to look at "Price Ratios" and from here, we can see key metrics like P/E and Trailing Twelve Month (TTM) Earnings Per Share (EPS). These are key metrics we use in assessing the fair market value of the stock. You can average these numbers out for the past 10 years and get the rolling 10-year average. This will give you real numbers, in good times and in bad.

Yahoo! Finance is a great place to get snapshot information and news regarding the market in general. Remember that people are paid a lot of money to spin the story to either rose-colored or depression-generating perspectives. If everyone is talking about the stock and you want to get in on it because it is so hot, maybe there is some distance to go and the stock will go up or maybe it has run its course. You should do the research to find out the tangible book value of the stock is and what is the actual possibility that the stock will break into higher numbers? Is is speculation or expectation because it has momentum? We all get a wild hair in us sometime and it is good to have a fixed amount of money you are willing to speculate with. This should be a small percentage (<10%) of your portfolio, if any at all. Ideally, I would recommend you invest in markets where the market has yet to find true value of the stock and you can see growth on the horizon through good financials, good leadership, and trust from inside the company where people like the manager of the local franchise owns stock in the business. Yahoo! Finance will help you begin to get a better picture of the business.

So I am mixed on my emotions about Seeking Alpha and I wanted to admit that right off of the bat because it may be that I don't really know how to use the free content on this site. That said, I think their free content is often lacking enough detail to be effective in my investment strategies. If I want to look for stock specific articles, it is sometimes locked behind a paywall. If I want to look at their latest and greatest content, it is often too general. So, do I read it every day? No. I come to Seeking Alpha when I have spare time and want to just philosophize about investing.

Does that mean everything here is worth ignoring? Absolutely not! As you will see (or maybe already know), I am really big into audio books and podcasts. Seeking Alpha has one of the most informative, best podcasts around for a daily snippet of investing knowledge, Wall Street Breakfast. Completely bite sized and easy to take in daily. If you are just getting started, this podcast is a great way to begin to build up your knowledge of the market.