Thursday, 6 November 2008

Not Everything is Down! Some Stocks are Up!

The seemingly unceasing gloomy financial news and plummeting stock markets could easily cause one to conclude that every stock has lost ground. Take heart, there are some winners in the markets!

The two screenshots below show the results of searching through the Toronto and New York stock exchanges for any stocks that have not gone down over the past year and for 2008 to date, i.e. that have survived the general meltdown. In both cases, I also specified that the company would have to be a reasonable size with active trading to eliminate the wacky, probably anomalous holdings.


USA (NYSE only)

In both markets, there are many companies, though they are decidedly a small minority compared to the overall number in the market, that have held their ground or even advanced significantly. Moral of the story - even in the worst of times like right now, there are still winners. And some may surprise - note some financial companies doing well, like Bank of America (NASDAQ symbol: IKL) in the US and Fairfax Financial (TSX symbol: FFH) in Canada.

The trick is, of course, finding them in advance (since finding them after the fact is like getting to the scene of a great dinner party the morning after - there may be a few leftovers but the good stuff has already been eaten).

Finding the winners requires research. A good way to start is to use the stock screeners with which I zeroed in on this year's year-to-date winners. Stock screeners let you specify criteria, for price, company size, sector, growth rates, profitability, usually along with analyst ratings. They allow searching through ETFs and mutual funds too. The best free one I know of for the Canadian market (it covers US markets too) is at GlobeInvestor. For US markets, an excellent free screener is Google Finance's, which has visual sliders that tell you how many companies are left as you go along. When you sign up with a discount broker, there is a screener tool available online as part of the package. In the today's example, it is BMO Investorline's, where I happen to have an account. BMOIL uses the enhanced Gold version of GlobeInvestor.

What your research aims to uncover in order to identify those winners is the million dollar question, easy to say in principle but very hard to assess in reality and a fine topic for future posts. For today, it's enough to remind ourselves to stay the course and not lose heart.

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