How Does MSN Money Choose a StockScouter?

Video Transcript

"Hi I'm Roger Groh. Do you use MSN? How do you pick stocks once you are there? Do you use Stock Scouter? It's pretty cool, do you know how it works? Well, think, depending on the type of company that you like to buy you would like to find companies that meet those parameters meaning some people just like to buy companies that do well during the early parts of an economic cycle and not necessarily through the whole economic cycle. You would like to be able to look through a big data bases for just those kinds of companies and a program like Stock Scouters you can do that. On the other hand other people like to identify companies that are consistent in terms of their revenue growth and net income growth. In a program like Stock Scouter you can screen the data bases looking for those types of companies. It is easy going backward, it gets harder going forward and within these programs what they also include are analyst estimates going forward. Now an analyst is only as good as his last estimate, not his next one but nonetheless if you have somebody who has followed a company for a long time and they have worked with that company through different economic cycles, they really do usually get it right and they'll know that during a recession well people just don't buy as much of their product and therefore earnings, there are no way they're going to go up or it's the bottom of a cycle and all of a sudden people are going to start to buy houses and cars again and that would be a wonderful time to buy those types of businesses as examples. So if you use MSN and if you use Stock Scouter it is really just a way to screen data bases looking for companies that use the traits that have the traits within them that you use to make the investment choices for your own portfolio. I'm Roger Groh."