Watch Lists

Stuart Lange on

I've done a lousy job of keeping my own watch and neither
club I have been in has done a very good job of maintaining
one. The biggest issue I've had with watch lists is that
there doesn't seem to be a clear appreciation of the
purpose. Is it a list of stocks we would like to buy if the
price was lower? Is it a list of stocks that we don't have
enough information on to make a reasoned decision? Is it
any stock we study that for whatever reason falls short of
meeting "buy" criteria? How do you decide what goes on,
stays on, or is dropped from a watch list? Not that I have
ever been guilty of this (yeah, right!) but does a stock go
on the watch list because I know someone put a lot of effort
into analyzing it and I don't want to hurt their feelings by
saying a flat out NO! to it? Is it all of these things, or
more, or less?

I would appreciate hearing about how others use watch
lists. Thank you.

Linda Glein on

Both clubs I belong to maintain a watchlist.

The purpose is to have a list of quality stocks which have met some basic criteria. A company may get added to the list because its current market price isn't a fair price, or because we don't have enough funds. Or, because we are already well represented in that sector.

When we are ready to replace a stock we already own, or wish to expand our portfolio, the first place we look is the watch list.

It is great to be ready to pounce when a good quality stock suddenly drops into the 'buy' zone.

It seems to be a constant battle to keep quality stocks on the list because members often lose sight of the purpose and want to remove a stock because it 'isn't a buy.' It also takes extra work to maintain the SSG judgement on that list of stocks. In one club we have a single person whose job it is to update the list and give us a heads up on deteriorating fundamentals. In the other club we divvy up the stocks amongst the club members.

We finally adopted a practice of voting to add or remove a stock from the watch list. We try to maintain a watch list that is diverse in sectors and size and keep the number of stocks on it reasonable.

Linda Glein

STAR Investment Club

Puget Sound Chapter Model Club

On Sun, Jun 5, 2022 at 9:59 AM Stuart Lange via bivio.com <user*25028600001@bivio.com> wrote:

I've done a lousy job of keeping my own watch and neither
club I have been in has done a very good job of maintaining
one. The biggest issue I've had with watch lists is that
there doesn't seem to be a clear appreciation of the
purpose. Is it a list of stocks we would like to buy if the
price was lower? Is it a list of stocks that we don't have
enough information on to make a reasoned decision? Is it
any stock we study that for whatever reason falls short of
meeting "buy" criteria? How do you decide what goes on,
stays on, or is dropped from a watch list? Not that I have
ever been guilty of this (yeah, right!) but does a stock go
on the watch list because I know someone put a lot of effort
into analyzing it and I don't want to hurt their feelings by
saying a flat out NO! to it? Is it all of these things, or
more, or less?

I would appreciate hearing about how others use watch
lists. Thank you.

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