This blog is about the personal finance of one frugal folk, me. I write it so people can see one version of what it’s like to invest in stocks as an individual. Investing in particular stocks frightens some people, as if it is something only professionals should do. It is actually one of the ways to possibly make money from money. My style takes far less effort than active traders, but when it does take an effort I try to give it the time it deserves. Take a look through this blog and realize that very few of the posts have anything to do with buying and selling, because trading stocks takes up very little of my time. Thanks to GIG Goes Buy Buy, it was time to dive in and decide what to do with the proceeds of the unfortunate sale. No research is ever complete. At some point a decision must be made. I’ve developed my process over decades. If you are just starting to invest, your process will develop to match your style. Here’s a view of mine that closes with an irony.

If you want more details that are explained more clearly, read (and maybe even buy) my book. Dream. Invest. Live. I wrote it in response to folks who asked me to write about how I retired at 38. Unfortunately, it was published as the Great Recession (the Second Great Depression) started. Regardless of that, I was hit by a perfect storm of bad luck (as a few professionals have called it). I called it my Triple Whammy, which I continue to work at recovering from. Until that perfect storm, the strategy had worked for three decades. I’m continuing to buy and hold small companies for the long term (LTBH) so I can sell them when they are much bigger and much more valuable.

GIG had just hit one of my key success criteria – and then was bought by another company before the stock properly responded. Just as I was about to see my patience rewarded, I’m finding myself having to recover, again. Once more into the breach, dear friends.

The task is simple. I sold all of my GIG and now had to find new places for it. The money is there to make enough money so I don’t have to worry about making more money. It shouldn’t sit still for long.

The cheap response, at least in terms of time, would be to just buy more of what I already have. That doesn’t improve diversification, and whims are bad strategies. Despite that, I did take a small portion of the proceeds to buy more AST and MVIS to bolster their positions. Both are stocks that are in my portfolio. Both have the potential for near term dramatic news. Both of the purchases are in my IRA, so I could sell again and buy something else without penalty, as long as they didn’t lose too much. Hopefully they’d gain more than the few percent available in money market accounts.

Time to screen every stock available. Take a deep breath.

Stock screeners sound like a simple idea. Load up the database of stocks, sort on criteria, pick the winner. Unfortunately, every screener tries to work a different way. I ended up using three to do one task.

Yahoo!’s screener took a while to load. My first criterion is market cap. They offered “Small”. I wanted to enter a range with specific numbers.

Google’s screener has the finest details for specific limits. Here it’s interpretation of my critieria.

• Initial list of stocks = 33,327
• Market cap = $50M – $2B. (I could enter the limits, but couldn’t figure out how to make it update, which it did when I did something innocuous like click on something else.)
• List of stocks = 9,782 (That’s a bit much. Retry with tighter limits.)
• Market cap = $50M – $1B.
• No change? Try adding the next criterion.
• Total Debt/Equity (Assets) < 10%
• List of stocks = 6516
• Positive book value
• List of stocks = 6302
• Still too broad to be useful, which is quite like some Google searches

Search for other, familiar screeners. Looks like sites have either taken down my favorites or renamed them.

Well, I’ve used Schwab for decades. Let’s see what they have.

• Success! It starts with a smaller list, but that’s okay. I only need a few.
• Market Cap 50M-2B = 2760 stocks
• Debt/Equity < .1 = 961 stocks
• Price/Book > 0 = 947 stocks
• Revenue growth (next year) > 0.1 = 482 stocks
• That’s small enough that I can begin clicking through.
• Remove sectors I don’t understand or don’t want to invest in. (The reasons would take a few thousand words. Maybe later.) Take out: Banks, energy, mining, fashion, holding companies.
• List of stocks ~ 270
• Schwab includes a nice, quick research glimpse with a mouseover of the name. Reduce, reduce, reduce, usually based on sudden stock drops.
• Call Chat to find out how to download the results so I can sort in Excel – and learn that my work has to stay within Schwab.
• Sigh.

It’s a good thing Monday was a holiday because it gave me one more day (part of an evening because I worked the rest of the day) to work on it.

Retreat to Yahoo!

• One way I research stocks is to keep a list of interesting companies from news items. I maintain one portfolio on Yahoo! that I call Curious.
• Check Curious against the criteria and come up with:
  CRAY, RRGB, BLDP, BREW, GAIA, ULBI, BSQR, NNVC
• Check another portfolio, an out of date version of the 100 top stocks based in the Seattle area. (The benefit being I can research them by attending their meetings.)
  HOME, CRAY, LSCC, SCHN, RENT, CACB, PCBK, NLS, BLT, NILE, BBSI, NSTG, POPE, DMRC, ESIO, CSTR, RNWK, NWPX, TSBK, CTIC, MCHX, MVIS, PXLW, KTEC, KTCC, BSQR,
• Realize that I can hand copy the “short” list from Schwab.
  XXII, AHC, ACTA, HIVE, AVAV, AGYS, AIRG, AOSL, AMSWA, APPF, APTI, AFI, AUDC, AXTI, BW, BLDP, BZUN, BRFH, BNED, BSET, BWEN, PRSS, CRCM, ECOM, CAAS, DL, CHUY, CTRN, CLFD, CLRO, CTRL, CRAI, CRAY, CROX, CFI, CYBE, CYRN, DAKT, DZSI, DWCH, DFRG, DNN, DGII, DMRC, DVD, ESTE, EDGW, ESIO, EMAN, EMKR, NDRO, WATT, EFOI, ERII, PLUS, ESCA, ETH, EVBG, EPM, EXA, EXAR, EXFO, XONE, EXPR, FARM, FARO, FINL, FRAN, FRPT, GAIA, GNK, GEOS, GPX, GHM, HABT, HSII, HIBB, HDSN, IDSY, ICD, IIIN, INST, IVAC, SNAK, ITI, ITRN, JIVE, JOUT, JMEI, LRN, KTEC, KIRK, KRNT, LAKE, LFGR, LEJU, LITB, LPTH, LLNW, LQDT, LYTS, LL, MGIC, CALL, HZO, MRTN, MED, MEET, MIND, MITK, MIXT, MOBL, MODN, MPAA, MOV, MRVC, MTSC, NSCC, NCIT, NPTN, UEPS, NTWK, NMBL, NWPX, NVMI, NVEE, NVEC, OOMA, OESX, ROYT, PCTI, PDVW, PRFT, PETS, FENG, PLAB, PCOM, POWL, PRGX, QIWI, QTNA, QUIK, QNST, RNWK, REIS, RVLT, REX, REI, RRTS, RTEC, RUTH, SANW, SPNS, SALT, SEAC, SCWX, SCVL, SHOR, SIAF, SODA, SORL, SPAR, STRL, SPCB, SUP, STS, SYX, TNGO, TEDU, TNAV, TESO, TLYS, TACT, TGA, TRMR, TUES, TWIN, UNXL, USAT, UTSI, VRNS, VRA, VIRC, VJET, VUZI, WMAR, WEYS, WYY, WLDN, WKHS, WPT, XCRA, XOXO, YUME, ZPIN, ZUMZ
• Create a new Yahoo portfolio called Shopping that has all three lists.
  Argh! Yahoo! limits copy and paste to 200 stocks.
• Edit duplicates and obvious non-candidates.
  RRGB, BREW, ULBI, NNVC, HOME, LSCC, SCHN, RENT, CACB, PCBK, NLS, BLT, BBSI, NSTG, POPE, DMRC, ESIO, CSTR, NWPX, TSBK, CTIC, MCHX, MVIS, PXLW, KTEC, KTCC, BSQR, XXII, AHC, ACTA, HIVE, AVAV, AGYS, AIRG, AOSL, AMSWA, APPF, APTI, AFI, AUDC, AXTI, BW, BLDP, BZUN, BRFH, BNED, BSET, BWEN, PRSS, CRCM, ECOM, CAAS, DL, CHUY, CTRN, CLFD, CLRO, CTRL, CRAI, CRAY, CROX, CFI, CYBE, CYRN, DAKT, DZSI, DWCH, DFRG, DNN, DGII, DMRC, DVD, ESTE, EDGW, ESIO, EMAN, EMKR, NDRO, WATT, EFOI, ERII, PLUS, ESCA, ETH, EVBG, EPM, EXA, EXAR, EXFO, XONE, EXPR, FARM, FARO, FINL, FRAN, FRPT, GAIA, GNK, GEOS, GPX, GHM, HABT, HSII, HIBB, HDSN, IDSY, ICD, IIIN, INST, IVAC, SNAK, ITI, ITRN, JIVE, JOUT, JMEI, LRN, KTEC, KIRK, KRNT, LAKE, LFGR, LEJU, LITB, LPTH, LLNW, LQDT, LYTS, LL, MGIC, CALL, HZO, MRTN, MED, MEET, MIND, MITK, MIXT, MOBL, MODN, MPAA, MOV, MRVC, MTSC, NSCC, NCIT, NPTN, UEPS, NTWK, NMBL, NWPX, NVMI, NVEE, NVEC, OOMA, OESX, ROYT, PCTI, PDVW, PRFT, PETS, FENG, PLAB, PCOM, POWL, PRGX, QIWI, QTNA, QUIK, QNST, RNWK, REIS, RVLT, REX, REI, RRTS, RTEC, RUTH, SANW, SPNS, SALT, SEAC, SCWX, SCVL, SHOR, SIAF, SODA, SORL, SPAR, STRL, SPCB, SUP, STS, SYX, TNGO, TEDU, TNAV, TESO, TLYS, TACT, TGA, TRMR, TUES, TWIN, UNXL, USAT, UTSI, VRNS, VRA, VIRC, VJET, VUZI, WMAR, WEYS, WYY, WLDN, WKHS, WPT, XCRA, YUME, ZPIN, ZUMZ
• Delete non-candidates, again. (finance, mining, education, furniture, fossil fuels, apparel, cars)
• Wow, that took some time.
• Check the Detailed view (handy) to remove sudden stock drops.
  Remove BLT, CRAY, EFOI, EXFO, FRAN, HABT, KRNT, LEJU, LQDT, NDRO, NLS, RENT, SIAF, SORL, TRMR, ULBI, ZPIN
• Review company profiles at a glance:
  ACTA, AGYS, AHC, AIRG, AMSWA, AOSL, APPF, APTI, AUDC, AVAV, AXTI, BLDP, BREW, BRFH, BSQR, BWEN, BZUN, CALL, CFI, CHUY, CLFD, CLRO, CRAI, CRCM, CTIC, CTRL, CTRN, CYBE, CYRN, DAKT, DFRG, DGII, DMRC, DWCH, DZSI, ECOM, EDGW, EMAN, EMKR, ERII, ESCA, ESIO, ESTE, EVBG, EXA, EXPR, FARM, FARO, FENG, FINL, FRPT, GAIA, GEOS, GHM, GPX, HDSN, HIBB, HIVE, HOME, HSII, HZO, IDSY, IIIN, INST, ITI, ITRN, IVAC, JIVE, JOUT, KIRK, KTCC, KTEC, LAKE, LFGR, LLNW, LPTH, LSCC, LYTS, MCHX, MED, MEET, MGIC, MIND, MITK, MIXT, NOBL, MODN, MOV, MPAA, MRTN, MRVC, MTSC, MVIS, NCIT, NMBL, NNVC, NPTN, HSTG, NTWK, NVEC, NVEE, NVMI, NWPX, OESX, OOMA, PCOM, PCTI, PDVW, PETS, PLAB, PLUS, POPE, POWL, PRFT, PRGX, PRSS, PXLW, QIWI, QTNA, QUIK, RRGB, SCHN, SCVL, SCWX, SEAC, SHOR, SNAK, SODA, SPAR, SPCB, STRL, STS, SUP, SYX, TACT, TEDU, TESO, TGA, TYLS, TNAV, TNGO, TSBK, TUES, TWIN, UEPS, UNXL, USAT, UTSI, VIRC, VJET, VRA, VRNS, VUZI, WATT ,WYES, WKHS, WLDN, WPT, WYY, XCRA, XONE, XXII, YUME
• Feeling a time crunch, so I decided to leverage past research, at least for now. I can come back later when I have time. It was interesting to see how many I recognized.
  • Eliminate ACTA. I owned it when it was ICGE, a decade ago, but it has declining revenues.
  • Consider BLDP. A nice alternative fuel source investment with a promising profit margin.
  • Consider BREW. I owned it when it was HOOK, as in Red Hook Brewery. They have mildly increasing revenues, but I don’t buy it anymore. I’ve always wanted to attend the annual meeting, though.
  • Eliminate BSQR. I lived up the hill from their office and watched them grow, but declining revenues.
  • Eliminate CTIC. A Seattle biotech that I’ve considered frequently but its stock just fell off a cliff.
  • Eliminate DMRC. Declining revenues.
  • Eliminate ESIO. Flattish revenues
  • Eliminate GAIA. Sold them a few years ago because I doubted their strategy which has produced flattish revenues. Maybe I was right.
  • Consider KTCC. But, flattish profit margins
  • Consider LSCC. Recovering is good.
  • Oh no, not again! MVIS. Repeat, Oh no, not again!
  • Eliminate NNVC. Nice or not it’s a too early biotech for my goals.
  • Consider NPTN. Surprise! It’s GIG’s competitor and it too is newly profitable.
  • Consider RRGB. I owned them near the IPO, but steered away during the Recession. Slight and stable revenue increase.
• That brings the list down to:
  AST, BLDP, BREW, KTCC, LSCC, MVIS, NPTN, RRGB
• I prefer disruptive business models.
  BLDP, KTCC, LSCC, NPTN
• A quick check of the final four (including a quick tour of their discussion boards) finds NPTN the key candidate. Back where I started with GIG, just shifted one company over.

After considering the cash available, the stocks I’ve reviewed, and my existing portfolio I decided to buy a bit more AST, which is already in my portfolio and promising, but too small of a position; and NPTN at a level that is smaller than GIG, but something to keep in mind for further purchases. I’ll learn more about them as I own them.

All of that happened within my IRA. There were a few shares outside my IRA, but I’ll hold onto that cash until I figure out how much I have to pay in income taxes. There isn’t enough there, but if it makes the difference between paying in cash or paying on credit, then investing in cash will have a secondary benefit.

That process took a few hours. Typically, I do that once or twice a year. That hasn’t happened for the last few years because I’ve really do buy and hold for the long term. That means I’ve saved that much time and more over other more active strategies. Whether they would have done better, whether I missed better investments above, I have no doubt. There is always something better, and best can only be determined from the moot safety of the future. I hope that I’ve done well enough, which is all any decision in the real world can be measured against.

My congratulations to everyone who got this far, even if you skipped over the boring bits.