How to seperate the very good stocks from the good stocks?

Hi everyone,

I'm new to this forum, but I'm already investing for some time (since 2009. And I must say I'm quit satisfied. I've made 5% or 10% profit a few times and once I even had 15% and 20%. Nonetheless I noticed that everytime I finished a run there are always stocks that performed way better in the same period. Most of the time it are stocks that suddenly became very volatile, but sometimes there are stocks from which I think: "How come I didn't see that coming?" and more importantly "How come that stock is rising much quicker than my stock?". Now I know this is more of a luxury problem and the grass is always greener on the other side, but I still have a few thoughts about this issue.

1. I have a watchlist of 50 to 60 stocks. Is this watchlist to few so I don't notice enough good stocks? How big are your watchlists?

2. According to William O'neil the best stocks are those with the best fundamentals (EPS Growth, ROE,...). But this doesn't seem to work all the time. Nevertheless I still keep an eye on this.

3. It doesn't often happen that I have the choose between two stocks starting from a base. But I does happen that a new stocks starts off from a base while I'm already having a run on another stock. I always tend to stick with my current stock or do you guys automatically switch to the new stock? Or only in certain cases?

Thanks on advance for your answers,

Greetings,

iBelgium

From the TA point of view, different approaches might be possible (though never 100% efficient) but they will depend on whether your stock is
a) resuming a trend or
b) breaking out of a range or
c) reversing out of a trend into an opposite trend.

Maybe there are reliable ways of identifying criteria based on fundamentals, but I can't offer any advice on these so I won't try to categorise them.

Look at whether they are leading or lagging the index they form part of. If they are leading the index in a trend they are likely to be responsible for dragging the index in that particular direction and probably have some momentum.

The trick here is to see whether the index is trending or in a range.

the Very Good ones go up more ?

I like stocks which have a good and consistent dividend yield. If the stock price goes down due to profit taking, short selling, or because someone sneezed in Europe, you still have that nice dividend. And will be doing good to hold it.

Also when these stocks go down in price, the dividend yield increases, people find it, then the price goes back up.

Win-Win if you ask me...