In this age of information, we no longer have to spend hours wading through pages of a company's mind-numbing financial reports to find out if it's worth our time and money. Instead, we're going to look at a quick way to check a stock's fundamental health. The kind folks at Investor's Business Daily (IBD) have devised a ranking system for stocks that I find invaluable. Under the guidance and ownership of the renowned William O'Neil, they provide proprietary ratings that give you a quick and reliable snapshot of corporate numbers. (Please understand, I am not connected with IBD.)

When I use IBD's ratings method, as opposed to doing my own research, it's analogous to either eating all the servings of a balanced meal, or taking a vitamin and getting most of the same nutrients in one fast, quick s~allow. The following is the vitamin approach.

You can glance at your stock's listing, check out the six number-letter combination, and thus obtain your daily dose of fundamentals. Then, during your free time, you can wander through the Web sites listed a bit later in the chapter and delve into in-depth reports and research.

IBD PROPRIETARY CORPORATE RATINGS

The Investor's Business Daily SmartSelect ratings cover the following:

1. SmartSelect Composite Rating. Combines all ratings that follow into a combined ranking. The stock's percent off its fifty-two-week high is included. Results are compared to all other companies; then the stock is assigned a rating from 1–99. We prefer the stock to rank 70 or higher.
2. Earnings Per Share (EPS) Rating. Tells you a stock's average short-term (recent quarters) and long-term (last three years) earnings growth rate. The number you see is how your company compares to all other companies; the scale goes from 1–99, with 99 being the highest rating achievable. For our purposes, we want this number to come in at 70 or higher.
3. Relative Price Strength (RS) Rating. Measures a stock's relative price change in the last twelv~ months in comparison to all other equities. Again, the scale runs from 1–99, and we look for a rating of 70 or higher.
4. Industry Relative Price Strength Rating. Contrasts a stock's industry price action in the last six months to the other 196 industries in ffiD's industry list. The scale is in letters from A to E, with A representing the best-performing industries. Look for stocks with A or B rankings.
5. Sales + Profit Margins + ROE (Return on Equity) Rating. Crunches a firm's sales growth rate during the last three quarters, before and after profit margins and return on equity into a letter. Again, the ratings are A-E. We want stocks rated A or B.
6. Accumulation/Dis­tribution Rating. Applies a formula of price and volume changes in the last thirteen weeks to determine if it is being accumulated (bought) or distributed (sold). Again, ratings are A-E, with A equals heavy buying, C equals neutral, and E equals heavy selling. This „AcclDis“ rating is very important. Choose stocks with an A or B.

These ratings are located next to the stock's listing in the mo tables. For example, you would find your target stock and see: 99, 99, 99, A, A, A, 72 (represents fifty-two-week high) Cranky Computers (then the rest of the quote information, etc.). Of course, the three 99s and the three As indicate the highest ratings possible; such a stock probably doesn't exist! Still, you can understand how fast this number/letter combination gives you an instant picture of a company's internal health. Sweet, huh?

In addition, check IBD's „The IBD List,“ published in each weekend edition (on Fridays). The roster inventories the best issues the S&P.500 has to offer in earnings per share ratings of 80 or higher. Also included are each stock's ticker symbol, industry (IBD tracks 197 industries),. earnings growth rate, and First Call (www.thomsonfi­nancial.com)e­arningsestima­te. It's a great list to pull stocks from in order to formulate your own personal „watch list.“

MORE INSTANT INFO: CNBC, CNN, AND BLOOMBERG

Walk into any trading room, and you will no doubt see televisions perched near the ceiling tuned to CNBC, CNN, and Bloomberg financial networks. They report global events, and interview nabobs such as CEOs, political pundits, and institutional analysts. It's important for you to stay abreast of all events that affect your portfolio, so it's a good idea to listen to one of these networks whenever you can. Sometimes CNBC will feature an off-the-wall, self-declared „expert“ sporting a baseball cap topped with a propeller and waving a fistful of balloons pushing municipal bonds, just to see if we're awake. Overall, though, the penguin tape is my favorite. When a bunch of analysts gang up on a company and all downgrade it on the same day, CNBC shows a group of penguins waddling to the edge of their ice float, then plunging all at once into the chilly water. Oh, how a little humor adds balance to the puckered-brow world of dollars and (sometimes little) sense!

And while we're on this subject, basing your stock picks on analysts' upgrades and downgrades will send you to Pecan Manor (the nut house). Remember, analysts think in terms of long-term holds, not a few days or weeks. Many people trade and invest according to financial network news. Just keep in mind that trading news can go against you. Again, the old market caveat, „Buy the rumor, sell the news“ remains true.

How many times have you watched companies announce good earnings news only to see the stock price get driven into the ground the next day? The good news/price plummet syndrome sometimes happens because the earnings news leaked out early and the price rose before the announcement. Or, maybe the host industry is stuck in a nasty downtrend, and no amount of good news will induce buyers to step to the plate. Generally speaking, good news lasts for one day, and bad news for three days.

However, if Fed Chairman Alan Greenspan appears on your screen and utters phrases like „irrational exuberance,“ and „looming inflation,“ pay attention. Before he reaches the end of either of those sentences, start pushing the sell button as fast as you can!

Use financial network news as a great overall global and market picture, and to stay aware of market sentiment. As a rule, though, refrain from basing single trades on lightning-bolt'announcements.

Before we leave newspapers and networks, I want to mention the Wall Street Journal, first published in July 1889 by Charles Dow, and its sister paper, Barron's, which hits the streets on weekends. Alan Abelson's crusty opening commentary, „Up and Down Wall Street,“ alone is worth the price of the subscription. Both are excellent financial resources published by Dow Jones & Co.

WONDERFUL WEB SITES TO WANDER THROUGH

The World Wide Web offers more financial research than you could ever hope to wade through in a lifetime! One report ventured that more than 13,000 financial Web sites now grace cyberspace. I suspect the true number runs much higher. Here's a micro-list of well-known, well-rounded sites to jump-start your research. Some are free, some offer a free trial subscription, and then charge a nominal monthly price. Enjoy!

1. Big Charts (www.bigcharts­.com). Bills itself as "the world's coolest charting and research site. Free interactive charts, quotes, industry analysis, intra-day stock screeners, market news, and commentary. The charts at this Web site offer most all indicator studies, plus you can overlay indexes on stock charts. Great charts for beginners who don't have charting software yet.
2. BigEasy Investor (www.bigeasyin­vestor.com).Po­pularamongtra­ders.this easy-to-use free site offers stock screening, charts, analysis, and research. It also features extensive educational tools for both novice and seasoned traders. The Trader's Playbook shows „hows“ and „whys“ of good plays, and the Trader's Dictionary offers a great resource on market terms. 3. BigTrends.com (www.bigtrends­.com). A good Web site for traders that offers daily market analysis, e-mail newsletters, feature articles, and trading education by Price Headley. Additional subscription services and products available.
3. Bloomberg (www.bloomber­g.com). Offers news, detailed stock lists, quotes, and more. Also, you can sign up for Bloomberg's Market Monitor, which will track up to ten stocks or indexes and give you updates on their performance.
4. CBS Market-Watch (www.cbs.market­watch.com). Offers a portfolio tracker, stock screener, charting utilities for technical analysis with direct links to data from Hoover's and Zack's.
5. ClnetNews.com (www.investor­.cnet.com). Links to the latest news stories and snapshots of current market activity, quotes, SEC filings, company profiles, and competitors. Targets tech companies/news.
6. DailyStocks.com (www.dailystoc­ks.com).This site bills itself as the Web's first and biggest stock research site. It offers research including quotes and screens. If you still can't find the data you need, Daily Stocks boasts a three-page list of links to other Web sites.
7. Fairmark Press (wwwfairmark.com). Tax guide for traders/investors. Offers tax forms and publications, books, and handy „Reference Room,“ a message board for tax questions.
8. Yahoo! Finance (www.quote.ya­hoo.com). Tools include a stock screener, portfolio, message boards and stock chat area, a personal stock pager, and company profiles. One page will display quotes and historical charts, current news, and links to research and related user messages.

After you scan these sites, you'll find your favorites that you'll return to time after time, and you'll also find new ones that pique your interest.

MAGAZINES

Two excellent magazines come to mind that target traders, Active Trader and Stocks & Commoditiess. Active Trader comes chock-full of articles that educate traders about everything from market psychology to pattern analysis. Its „Trading Basics“ section speaks primarily to novice traders, and is well worth the read. Stocks and Commodities does a great job of explaining various indicators and how to use them, among other topics. It also gives sector (industry) reviews and interviews industry gurus. Of course, a whole host of magazines geared to investors and American business line the newsstand shelves. Most are treasure troves of educational material, but are not to be depended on for up-to-the-second fundamental information. The time lag between the writing and go-to-press dates make fundamentals too dated for short-term traders.