Every investor has their own way of discovering new investment ideas, but if you're not currently taking advantage of stock screeners, it's time you gave them a shot. 

In this episode of Industry Focus: Consumer Goods, Vincent Shen and senior Motley Fool contributor Asit Sharma teach investors what they need to know to get started with stock screens. Find out what factors to consider when you're setting up your screen parameters, some tips for narrowing your searches, three free and easy-to-use screeners you can try today, pitfalls to avoid, and more.

A full transcript follows the video.

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This video was recorded on April 24, 2018.

Vincent Shen: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. It's Tuesday, April 24th, and I'm your host, Vincent Shen.

Did you know that you can reach the Industry Focus cast at any time with feedback, questions, or just to say hello? Our email is [email protected], and on Twitter we go by MFIndustryFocus. I wanted to call that out first thing on this episode, because a listener question inspired our discussion last week on Ulta Beauty, and today, we're reaching into the mailbag again, this time to answer a question from listener Eric.

But before we move on, allow me to introduce my guest, who's calling into the Fool HQ studio via Skype. Joining me is senior Motley Fool contributor Asit Sharma. Hey bud!

Asit Sharma: Hey! How's it going, my friend?

Shen: Doing well. How's everything on your end?

Sharma: It's good. It's a dreary day here in North Carolina, but it's Tuesday, my favorite spot on a Tuesday afternoon, to be with you and our investors. So I think the sun will come out as we have this discussion.

Shen: [laughs] We have a pretty cool episode today, taking more of a big picture approach in terms of the stock investing process. I'll kick off the episode with a question and a request for listeners, actually. First, for Fools listening, I want you to take a second to think about your process for discovering new stock investment ideas. So whether you have a very formal standardized process, or you get your ideas from reading publications like The Wall Street Journal or something else, or maybe listening to podcasts like this one, or just your day-to-day life experience, take a second and think through the last few stocks you purchased or looked into purchasing, and recall how those companies ended up on your radar.

Now, for you, Asit, I'll ask you the same thing: Where do you usually turn for your stock ideas? And how do companies usually end up on your watch list or in your portfolio?

Sharma: For me, Vince, it's a combination of several things. I do like the method espoused by Peter Lynch way back in the 80s, which is to invest in things that you understand and that you see around you. An example is Canada Goose, which we've talked about on this show, and how that company, it's a very vibrant clothing company. If you've been around one of their flagship stores in a big city, it's something that you might have encountered, just visually. "This company is selling a parka," like we said on the recent show, "for $1,000. I wonder if they're publicly traded?" So that's one method. I do tend to read widely in the markets in my relationship with the Fool, so interesting things that come up if I'm reading a trade journal or a financial publication and I'll dig down. 

And the third way, of course, is using stock screens. Both of us have talked on previous shows about stocks that we've uncovered using screeners -- that is, websites which present filters that allow you to drill down into the market based on characteristics you like to see in a company. And that's the third way, and more of an empirical way, that I like to go about finding a stock to invest in.

Shen: I think we are in a somewhat advantageous position based on my working at the Fool, you writing for us and being on this podcast, just being in an investing mindset throughout your day-to-day. That definitely gives us a lot more exposure to discovering new companies, new stock ideas. 

But I ask all of this, and I'm glad that you mentioned those screeners, it's very convenient, because for today's show, we're going to take a break from the company-specific coverage that we've been focused on recently, because Eric, that Foolish listener I mentioned earlier, he wrote to me last month wanting to learn more about stock screening, because it came up on an episode in March. Specifically, he said, "I know I would appreciate an episode on your techniques for screens, various metrics you filter on, which software you prefer, how you further pare down a large number of results, for how many results you actually read 10-Ks, etc." And he mentioned a quote, "Give a man a fish and feed him for a day. Teach a man to fish and feed him for a lifetime."

Asit, you heard him. Let's do some fishing and teaching. To start, I'd like to lay out our approach. We'll talk about the metrics you can use to filter down your screen lists, and after that, we'll talk about the actual resources that are available to you for performing these screens. Then, at the end, we'll close out with some thoughts on what to do once you have your screen results, and talk about some best practices and warnings, as well, for this approach.

First thing's first, the core approach and benefits of stock screening are no different, I think, from the decision-making process that people often take when they make a major purchase such as buying a new car. Technically, if you're really approaching that purchase with an open mind, you might start with a large basket of various makes and models available in your market, and then you start applying the filters, like size, cost, fuel efficiency, passenger capacity, aesthetics. With enough criteria, you shrink your basket of options down to a reasonable number of vehicle models, and then you go out to talk to dealers, do some test driving, or look for online listings, and eventually you take the plunge and you have the car that you want. 

For stock investing, we start in a similar place, for example, with all publicly traded companies. For the purposes of this discussion, this is usually the case for Industry Focus in general, we'll limit our basket to stocks that trade on major U.S. exchanges. That comes out to approximately 5,600 companies, give or take some based on varying definitions, but all in all, lots of options to choose from.

Before we move on and start really getting into the nitty-gritty here, I want to address an important caveat, and that is knowing what you want and what your objectives are as an investor, because that's important to determining your stock-picking strategy, not surprisingly, and what the screen process will look like for you. There's no requirement to know exactly what kind of investor you are for screening to be useful, but it does help to have those high-level goals cleared away. Older investors might be focused on dividends and income, and they'll be attracted to different stocks and use different screens compared to a growth investor, just as a value investor will have their own set of criteria and needs.

Personally, screens help me push out of my so-called comfort zone with companies that are outside of The Motley Fool universe, where a lot of my work is focused. But I'll pose this question to you, Asit -- how do you use screens personally?

Sharma: I very much use them, Vince, in the sense of confirming what I'm already interested in. I'll go through three primary reasons that I use these, and then I guess we can talk about different metrics and ratios. 

But first, I want to say something directly to Eric. Eric, thank you, because what Vince left off when he read your question is that you thought dozens of listeners, some of the other of dozens of listeners, also had your question. And I think that's great. That's a hashtag that's associated with Market Foolery and some of the other Motley Fool podcasts. They happen to have dozens of listeners, and you have just confirmed that on Industry Focus, we also have dozens of listeners. I thought that was really cool, and I appreciate that you are one of those dozens.

Myself, I have a certain worldview of looking at stocks. I like three things. I like to see rising revenue, rising earnings, and rising operating cash flow in a company being generated all at the same time. And I like to see that over long periods of time. If you compare me on a spectrum to other investors, I may be a somewhat aggressive investor but not a hugely aggressive investor. Coca-Cola is an example of a company that I've liked for a long time. McDonald's is another. These are actually very big names. Everyone knows what they produce and what their basic investment thesis is. But I like to look at their financials and confirm that, "This company, X, can do all three things at the same time." 

So when I go to a stock screener, those are three parameters I'll usually start with. Then, I can add on other things I'm interested in. Maybe I think a company is undervalued, so I want to look at its valuation. Or find a company that I'm not familiar with that's flying below that radar, so I'll set a valuation parameter or filter to a setting which shows companies that aren't valued very highly by the market but also have those three other characteristics I had talked about.

That's the first way that I go about looking for new stocks, based on my investing personality. Everyone's investing personality is different. If you know yourself, you're more likely to pick up great companies that you can be comfortable with later on. It's important to try to look in the mirror and really know, long-term, when I buy a company, what am I comfortable holding for a long period?

Second, hunting down a specific idea. We talked several shows ago about Pool Corporation, which is something I pulled off a screen, just wondering, "In this mid-cap universe, or mid-capitalization stocks, or small-capitalization stocks, to go even lower, are there companies that are growing really rapidly?" Because a lot of times on Industry Focus, we talk about big names like NikeStarbucks, Walmart. Just setting a market capitalization filter, so "Let me find a stock that's below $10 billion in market capitalization, combined with other characteristics," pulls up new stocks that I'm not familiar with.

The third way that I use screens is element of surprise. I like to be surprised. I think we all do. Screens, when you start to use them regularly, you'll see these companies which provide them throw in a bunch of different metrics and ways that you can find companies that you may not be familiar with. So, I like to tinker with the parameters when I go to a stock site that offers a screen. We'll talk in a moment about some very popular ones that we think are good for listeners and happen to be free. So just playing around, tinkering, looking for what surprises you, is a way to learn about the market and to learn about stocks you're not familiar with, to learn about sectors and industries which you may not be familiar with, and as Vince says, could be out of your comfort zone. 

Just to recap: look for companies that conform to my personality as an investor. No. 2, I like to hunt down specific ideas. And No. 3, I like to play around with the screens to both learn about the market and find great stocks that I might not have found using the typical parameters that I'll set and are used to using on these screens.

Shen: Awesome. Thank you, Asit! There's some great points there, and I think that's a good high-level mindset to have as we start moving into the specifics of running a screen. For the next step, we have a basic framework for categorizing the various metrics -- and there are many of them -- that an investor can employ when they're doing a screen.

We have these broken up into four primary groups. Those are market and technical-based metrics, metrics from the financial statements, operational and other ratios, and valuation-based metrics. We're going to hit these one by one with a quick rundown of each category, and then how listeners can think about them.

For market and technical-based metrics, what does this include, Asit, and how do you generally approach this category?

Sharma: These are the very broad first ideas that come to an investor when he or she sits down. I mentioned market capitalization. That's a market type of indicator. Another could be float of shares that are out there. So if you happen to be a more sophisticated investor who likes to short stocks, that's one of the first things that you want to know. 

Technical-related, we don't want to go too deep in this podcast on technical ways of looking at a stock. We tend to be more focused on what's called the fundamental side, but some really important ones are moving averages. If you want to know how a company is doing relative to its own performance and its own stock chart universe, you would look at its moving average, either a 30-day, 50-day, 100-day or 200-day moving average. If the stock is above the moving average of so many previous trading sessions, then we tend to say that it's performing well in the market. And if it's taken a sudden dip below the average of many previous trading sessions, that's a reason to look at, what is the news coverage that's relevant to this stock? Maybe there's something that you need to be aware of. So that's one technical measure that I would definitely advise listeners to become familiar with. 

As to some more sophisticated ones, the shorter your time frame, the more you can peel this onion. You can look at stochastic measures and all kinds of fancy things, but those become more the realm of traders than true long-term investors. So that's the first set, is market and technical. Should I jump into the next section?

Shen: I'll just add that this category is going to include some of the high-level things you mentioned, market cap, but also things like dividend yield, trading volume, the short interest that you mentioned, and stock performance over various time frames. And I mention that last one, because most commonly, those market-based metrics are what help me narrow down my screen results, especially for company size and recent stock performance. For stocks that declined, for example, I put on my bargain hunter hat and I think to myself, why is the company down over my established time frame. Is there an opportunity here from the market, for example, overreacting to short-term headwinds? Or maybe the company has been on my watch list previously, and now that the price point is more digestible -- of course, assuming the company's fundamentals haven't changed significantly -- is this a good time to basically get a bargain? 

On the flip side, and this is how we came upon Estée Lauder, which came up on the show and was the focus of Industry Focus about two weeks ago, for stocks that have really outperformed, why is the market essentially so excited about that stock? Are there advantages or tailwinds that are sustainable going forward? So kind of a high-level approach to that process.

We'll move on now to the financial statements. What is the need-to-know for this category, Asit?

Sharma: This is also very high-level, and you don't have to be an expert in accounting or finance to use these basic screens, but they pertain to the three major financial statements -- income statement, then you have the balance sheet, and statement of cash flows. 

Income statement, really basic, you want to look at profit margin, maybe operating margin. These are net margins that tell you the company is making money -- for every sales dollar, what's it taking home. If you set a screen to profit margin above, say 10%, that means that that company at the end of the year is generating at least 10% profit on every sales dollar. And the better screens out there will let you do that, such a simple screen. So income statement, I would stick to those.

Operating margin is another one. That tends to be focused on how a company does operationally before it accounts for its debt, interest expense on that debt, forward accounts for taxes. To give you an example in, let's say Yahoo Finance, which we'll talk about, they give you a way to look at the operating income of a company and that margin, which is always a little higher than the profit margin. So,I would stick with a couple of those in income statement.

Revenue growth is one more that is very popular. Vince just talked about watching Estée Lauder's stock chart, and he found that by screening for companies which had moved up their stock chart very persuasively in a one-year period. You can do the same for revenue. The company suddenly has a jump in its revenue or earnings -- earnings is important as well -- then, that's a reason, maybe, to investigate further.

As for the balance sheet, you want to look at cash on the balance sheet. You can screen for how much cash a company has. And look at that vs. what its current liabilities are, such as accounts payable. You can also look at total assets vs. total liabilities, just to get a feel for if the company is solvent. You don't want the equation to be flipped upside down. For example, let's say you run a screen and see that a company's liabilities are well in excess of its assets. There's actually a place to make up for that difference in a company's financials -- that's the equity portion of the financial statements. But that's maybe a sign of danger. It also could be the case that the company which just showed that flipped equation happens to be investing very heavily in capital equipment, for one reason. It depends on the industry.

But balance sheet, you're basically looking to get a feel for the company's resources vs. its obligations. Again, the major services present very easy-to-understand screens for this. You can look at total assets vs. liabilities, you can look at total assets vs. long-term debt, and just get a very basic sense of how that company stands with its resources.

The third is the statement of cash flows. I tend to zero in first on operating cash flow to know, how much cash is a company generating from its operations? You can screen for operating cash flow. You can also screen for free cash flow, which is simply operating cash flow less what a company has spent on its physical assets, its equipment, maybe acquisitions. Free cash flow is a very popular measure with investors, because it gives you a sense of how strong a company is. After it's paid for all of its fixed overhead, how much cash does it have left over then to buy equipment? The next remainder after that can be used for debt service, can be used to maybe pay a dividend to shareholders. 

So those are the three basic financial statements, and a few of the screens that you might run for each of those.

Shen: Perfect. Keep in mind, things like revenue growth, earnings growth, cash flows, even things like R&D spending, with the financial statement metrics, there's tons and tons of options here. It gives you a lot of flexibility, depending on what you're looking for, what criteria you want to set, I think a lot of those will fall into this specific category. 

But I think it's the next category, with operational metrics and ratios, where the screening really shines for investors, in terms of being able to hone in on their desired traits in a company. This is something I use a lot to filter down those results. Honestly, we could spend a whole week discussing all the various financial ratios that are out there themselves. But for the purposes of this discussion, we'll just focus on the idea of having a tool belt with various ratios that prioritize what you want to see in a company. So for example, retailers in our space, that might mean fast inventory turnover relative to its peers, or robust debt coverage, which they might combine to give the company financial flexibility, to expand its store base, maybe make an acquisition. They also indicate that the business can accurately estimate its demand for its products and adjust to consumer trends as necessary. 

But with operational metrics and ratios, how do you approach this category, Asit?

Sharma: The same way that you do, Vince. I love the example you gave. After I've done the basic screen filters, put those into the software that we went through, I might look at something like inventory turnover. I want to give listeners a really quick example. I recently wrote about TJX Companies, the parent company of T.J.Maxx, HomeGoods, Marshalls. And I'm fascinated by their position as this off-price retailer. Just to see -- I didn't put this into a stock screen, but it could have very well turned up if I had made a query -- but I looked at its inventory turnover. This company turns its inventory over eight times every year. That is super fast. And that is a sign of a very strong retailer, and it also really supplements their strategy of offering the discount merchandise that other retailers and manufacturers don't want anymore that they need to move, they sell it to T.J.Maxx and T.J.Maxx sells it to the price-conscious shoppers, of which it has legions of fans. 

But once you do these first basic screens, you can add something like inventory turnover. Let's look at just one more that Vince mentioned, which I like very much -- it's debt coverage, to see, how many times can a company cover its interest expense in a year? You might just pull one or two debt coverage service ratios off of a screen, just to see, does this company have the ability to pay its debt obligations. Everything else looks good. So this is maybe a slightly more sophisticated set of screens you could use. It's really secondary to the primary ones. But you can use it to fine tune, again, a special idea you have or a question you might have. "Hey, are there any retailers out there that are growing more than 10% a year that have a market cap in excess of $12 billion that also have an inventory turnover of more than 5x?" Someone who runs that screen will probably find TJX pops up, and that's a basis for further investigation on what might be a really great stock.

Shen: Thank you! We're running a little tight on time here. We have one last category, so I'll speak to this quickly, and that's with valuation. Going back to that car buying analogy, the price tag is obviously important. Some of our listeners might be perfectly happy paying for stocks that, for example, trade at triple-digit price-to-earnings multiples, or a really nice luxury car, because they believe that growth is valuable or that that model is what fills their needs and they can afford it. Others will have more strict guidelines based on things like price-to-earnings growth, price-to-sales if earnings aren't there. But the valuation category is kind of a nice metric to add on to your screen once you narrow down these different companies based on those other primary metrics that we've talked about in terms of really making that go/no-go strategy when it comes to either putting the company in your watch list or actually taking on a position.

We've established a basic understanding of the filters at our disposal. Now, I want to quickly look at the tools that are available for screens. If you perform a quick Google search, you'll find lots and lots of websites that offer screening tools. But based on our research, the three top offerings are from Zacks, Yahoo Finance, and Finviz. Before we go any further, Fools, if you're on the run and you're unable to write the information for these down, don't worry, just send a note to [email protected] and I'll forward you links to the screeners, along with some notes on what each one has to offer. Again, that's [email protected], just send us an email and I'll make sure to hook you up with that.

All three services are free to use. They allow you to create screens and save them for future reference, which is really helpful if you want to see how the field of results changes over time, whether certain companies that you've been looking at still meet the criteria that you set. And overall, I think they offer a pretty robust set of criteria for filtering your results. Asit, I think you're a little bit more familiar with these than I am. Any big differences that you've noticed that are worth pointing out between the three?

Sharma: Just going to briefly run through the major differences. Zacks is great for first-time users, because after you get through the first four or five premium screens that it has, which you have to subscribe to their service to use, the next eight are very clearly laid out, and they work through the same basic parameters and overview that we've been talking about in this whole episode. So Zacks is a good one to start with.

Yahoo Finance is surprisingly robust. It tends to follow the three basic financial statements. It also has, if you're an investor who's concerned about environmental sustainability, you can sort for ESG -- that's environmental, social and governments metrics -- in their screen. I think that's pretty interesting. Very few screens have that.

Finviz has a little bit of a busy layout, but it's good for on the go. So if you're the type of investor who's working hard all day at your job and you just have a few minutes to grab a sandwich at lunch and an idea pops in your head, go to Finviz. As I said, it's a little bit of a compressed layout, a little busy, but you can quickly put in your parameters based on very broad ideas that you have, and you can get results spit out, which is then easy to bookmark, maybe, for later use.

So, Zacks for learning; Yahoo to delve further; and Finviz if you're on the run. But all three are great, comprehensive, and you can't go wrong playing with any of the three.

Shen: Alright. I'll just say, if I had to pick a personal favorite, I think I would go with Finviz, in terms of what you mentioned, as the on-the-go option. I don't think it offers as many filter criteria for your screen, but I really like how they present the results in that you can curate them according to specific focuses. So there's an output that's focused on valuation, another that's focused on financials, another on price performance, and there's other options, too. And it will basically spit out columns with metrics that are specific to each of those categories. So a really interesting look if you're, in one case, if you're focused on the valuation, you can look at that; otherwise, if you're worried about debt levels, you can look at the financials. So there's some really cool presentations for your screen results there. 

And the last thing I'll mention in terms of the tool belt and the resources available to you for screens is that a lot of online brokers will actually provide investing tools, including screeners, as well. So make sure you check if your broker has something to offer, as well. And then, if through your job or your office or whatever, you have access to premium tools like Capital IQ or FactSet or a Bloomberg terminal, those can be amazing resources as well. Capital IQ, we're able to use those here at Fool HQ, and that's my go-to resource for screens. 

Now that we've established the tools and metrics that you have at your disposal, I want to end the discussion on what to do with the results, and some of those best practices and cautionary notes. Asit, you've run a screen, you're looking to whittle down the list of results. How do you generally approach that?

Sharma: The first thing that I look at is, are my first couple of results red herrings or outliers? To give you a quick example, many of the screen services give you minimum and maximum ranges, and some just give you an option to have a number or beyond that number.

Let's talk about dividend yield, for longer-term investors who like dividends. Some of the screening services allow you to say, "I want a dividend yield above 3%." So when you put in your other parameters and then hit submit, and you see the very first stock has a 12% yield, that may be a red herring. Maybe the stock had a 3% yield, but the price has fallen by 50%, shooting the yield up. Maybe there's an issue there that the company needs to offer a super high dividend yield to attract investors. There are special cases, as we know, in real estate and in the oil industry, where higher dividend yields are expected. But in general, be careful, stock screeners can sometimes return sort of funky results. So just as you would if you get back a circular review from fellow employees at your job, you're advised to discount that very best recommendation about you and discount the really worst things that people said -- it's the same with the stock screeners. Be skeptical of the very first couple of results.

The second best practice is to work from the stock out. When you uncover a new stock, don't just research that stock. Understand the industry that it plays in, understand what's going on in that industry. That search result is your jumping off point for as much research as you want. As Vince said, if you're buying that new car and you take five minutes to figure out what's good about the car, you go to the lot and buy it, and then you complain about the gas mileage nine months later, that's on you. And that's often been on me in the past. I take a little bit more time researching now. It's worth the effort.

And then, I would suggest one more thing. If you do run a screen and come up with a stock that you love and you buy, run that screen once a quarter. The reason for that is, financials are issued on a quarterly basis for every stock that is publicly traded. And all the information that gets crunched in these databases changes every three months. You will see what has changed for better or worse with your stock, and also, it will give you a cue about the industry that that stock is playing in. It's a great way to learn about companies. Don't run a screen, find a stock, and then forget about it. Do it again and see where your stock lands. It may be moving up and getting even better, or there may be a warning flag that gosh, something has changed, I need to go back and maybe read the annual report, quarterly report, see what's going on with this stock that I've chosen.

Shen: Alright. We have a couple of more minutes here. I'm just going to add a few more notes and give you a chance, Asit, to share any final takeaways. Something that I noticed myself when I first started running these, and I used to run tons of screens in my last job when I was in investment banking. We used to look at a lot of comparable deals when trying to price equity offerings. Something that you can fall victim to is, you can lose sight of what your original goal or objective was when running a lot of screens, because you try to game the criteria that you use for your results. And if you end up with dozens, if not hundreds, of results, you might have started with those handful of essential criteria at first, then you want to start adding more nice-to-have attributes to filter that list down further. 

Keep in mind, this is just one step in the stock-picking process. So even if your results return just three companies, you should be digging into, for example, the financial filings, their earnings call transcripts, and the shareholder presentations before you make any decisions, because the metrics in the screens themselves can only take you so far. So if you value things like the intangibles -- like capable management, competitive moats, product innovation -- the filters don't always tell you that whole story, so you can't let a slick set of screen criteria trick you into thinking you've done the necessary research and due diligence for an investment.

On that note, in addition to the screen links I mentioned earlier, I'll also provide the stock-picking process that Financials host Michael Douglass wrote up last year. It largely matches my own approach to evaluating a company. I think it offers a great overview of what a more robust due diligence process looks like. So again, email [email protected] if you'd like to get your hands on any of those resources. 

We have a few more minutes here, Asit. I'm sure I've forgotten some stuff. What else do you think Fools need to know before they start diving in?

Sharma: Just to give one last thing to be aware of, and this is a caveat or caution: Be prepared for the pain of learning. Stock screening is a really wonderful way to become more knowledgeable about the market and to find stocks that you're going to be comfortable with and that promote the values, both in the real world and financially, that you espouse, that you're into. The problem with stock screens, like anything else, they will turn up great results, they'll also turn up, like I said, red herrings, or maybe even ideas that you thought were great, you invest in a company, and later on you find it was a mistake. 

But you know what? You're going to learn from that mistake. Really experienced investors know what to discount when they churn these stock screens, but they've had the benefit of time and study and having painful losses themselves. So if you're at the beginning of this learning curve, don't be afraid and don't get discouraged if you buy a stock based off a stock screen and it doesn't pan out. If you've done what Vince says, if you have put in the research beforehand and learned the narrative of that company and understood it, then you're OK, because you will take away some really valuable stuff for the next screens you run. So overall, it's a really wonderful tool, as we've said. But don't walk away from it if you have a few stumbles along that path.

Shen: Thanks, Asit! I'll just add, and this is kind of related to my comments on performing proper research on any results from your screens, I think this echoes a cardinal rule because I love screens in that it's a very quantitative approach to the whole stock-picking and stock discovery process, but just remember that past results from a company are no guarantee of their future performance. A lot of the metrics that get employed in a screen are backwards-looking. That means you're going to have to dig into the qualitative aspects of that company as well to understand what will continue to, for example, drive strong revenue growth, how the company is using debt. 

And then, the last thing I'll end on, and this is slightly beyond the scope of our discussion, but I think with screens, this is where the benefits of keeping an investing journal really make themselves apparent. Besides, in your journal, tracking your investing thesis for a particular stock purchase -- so, for example, why company XYZ, why at that point in time -- which is a great way to hold yourself accountable and to test your assumptions and theories over time, you can also update your journal with the goals and priorities in your portfolio and how you set them as they change over time in relation to the kind of screens that you perform.

I'm going to end it there. Shout out again to Eric for the great question. Asit, always appreciate you hopping on with us. Thanks for listening, Fools!

People on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against any stocks mentioned, so don't buy or sell anything based solely on what you hear during the program. Fool on!