Matt, ya ready for this? Years ago when I first got into the Lighting Business an older gentleman (sales rep) took it upon himself to teach me how to sell commercial lighting! This guy was remarkable.
He would say, Keith.. Out there you will find Tomato Picker's and Potato Diggers, If you dig hard and long enough you will find the big Potato! (Hold that thought)!
So I worked hard and developed a substantial customer base as he trained me. Then I realized one day that I had not heard from him for a couple of weeks and called his office. I was told that he was no longer employed there and that was all they could say about it...
I sensed that something was very wrong and called him at home only to find out that this tutor of mine was headed for the federal pen for Tax evasion for several years! (Hold that thought)!
And now, how did I narrow down The Value Line Investment Survey - Small and Mid-Cap Edition, Summary & Index dated 01/23/04 to 41 potato's...
First I highlighted every stock that had a beta of 1.25 or better with positive earnings sometime in the last 12 months. The list was 113 out of roughly 2000. Now I tend to bend the rules some what as I go along, for example I included some with lower beta's...
I then printed out everyone of those reports so I could read each one as I dosed into the night. I marked them yes, no or maybe.
On each report I circled the following items: Beta 1.25+, Price Stability 5-20, Book value +, Quarterly sales +, Earnings per Share +, Institutional Decisions to Buy +, Cash Assets, Total Debt, Common Stock Shares..
Then I would read the profile and try to visualize where the company might fit in the overall picture of the world economy. If I didn't remotely understand the business I dumped it.
My tutor finally got out of prison seven years later and his spirit was broken. If anyone try's to duplicate my potato machine they may go broke also. <smile>
Keith
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