Does Stock Software Help With Picking Value Stocks?

With the mess that investment bankers have made on Wall Street, it is not surprising that more and more people are taking financial matters into their own hands and investing for themselves.  And frankly, anytime people become more knowledgeable about their finances, it is usually a good thing.

However, with the proliferation of stock trading software, sometimes the ease of use overcompensates for a lack of understanding in financial matters.  If you don’t have a clear grasp of stock picking fundamentals, you can lose a lot of money in the stock market.

Is it ever any wonder that the word’s best investor Warren Buffett doesn’t use any stock trading software or any other aid in the way he picks his stocks?  You might think that he’s just old fashion but it is probably because he doesn’t want the distraction.  After all, he made his billion dollar fortune without it.

While stock programs will identify the best stock picks on paper, there are the intangibles that you have to consider as well.  Is the company well run?  Is it a good brand?  How does it compare against its competitors?

What do the consumers have to say about it?  According to Buffett, his investment strategy is mostly based on value stock investing (which takes care of the cheap part) but it is also dependent on management as well.  After all, it doesn’t take long for some bozo to run a company to the ground.

Even though your stock trading program can identify some stocks that fit your investment criteria, it won’t hurt that you pick up the phone to call investor relations and get a feel for the company.  Remember that it only takes a few winners to make you rich as the concept of diversification is over rated.

If you have done your research, you shouldn’t need to diversify. So while stock picking software is a great aid, you still have to do some leg work.  Being rich is hard work, but it’s obviously worth it.

photo credit: kevinzhengli