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You are here: Home / Investing / My Stock Selection Framework

My Stock Selection Framework

To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. ~ Warren Buffett

My fundamental philosophy of life: Preparation. Discipline. Patience. Decisiveness. ~ Charlie Munger

Combining whatever I have learned from these and other legends of investing, and also my little investment experience spanning the last 14+ years, here is my “framework” for selecting stocks that have mostly worked well for me over time (sorry for a bit darkish image, but it just shows how cloudy it is here where I live).


Click here to download a larger image

A few pointers from this framework –

  • Screeners I use – Screener.in, Google Finance
  • My screening criteria is what has worked for me over time. You can modify it to suit what you are looking for
  • What this framework shows is the science part of investing. The art part involves changing the flow of filters in the funnel to suit your style. So, some people may have the “moat filter” prior to the “financial stability filter,” etc.
  • Warning – This framework has also handed me to a few mistakes, so beware. But overall, it has helped me build a portfolio of stocks that have done extremely well over a period of time. How well? I won’t put a number to it. Just that it’s been a number that has helped me build enough to pay off my financial liabilities, quit my job, and work on things and with people I love (don’t want to prove this to anyone). 😉

Anyways, the proof of the pudding is in the eating. So I would suggest you try this process, in case you don’t have one of your own, and let me know your thoughts/results five years from now. 🙂

And by the way, this framework will only help you prepare. You must get discipline, patience and decisiveness on the table yourself.

Send me your thoughts/questions on this framework, in the Comments section of this post.

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Reader Interactions

Comments

  1. KSB says

    August 3, 2017 at 1:45 pm

    Hi Vishal , I attended u r workshop on 24 Feb 2017 at YMCA, Delhi .
    I am aspiring to become full time investor by 2022, I started my serious journey from 2016. Need to valuable and constructive advice , you can post me personal msg(if u can) . What do think the minimum PF size to become a full time investor, may i know u rs please.

    Reply
    • Vishal Khandelwal says

      August 3, 2017 at 1:52 pm

      Hi, please see this post – Want to Become a Full-Time Investor? Here’s Your Checklist.

      Reply
  2. Aashish says

    August 3, 2017 at 1:59 pm

    Hi Vishal,
    Thanks. This is a very usable model.
    Do you have pointers or articles on the price filter part. I think that’s the toughest part for me – to arrive at a value.

    Reply
    • Vishal Khandelwal says

      August 3, 2017 at 2:48 pm

      Hi Aashish. Please see here and here.

      Reply
  3. KSB says

    August 3, 2017 at 2:27 pm

    Thanks Vishal

    Reply
  4. Suresh Patel says

    August 3, 2017 at 4:43 pm

    Hi Vishal,
    This is the really nice article. The model you have drawn here is unbeatable really. I’ll share this article with my father for sure. Thank you so much for the useful article. Best wishes & Regards.

    Reply
    • Vishal Khandelwal says

      August 3, 2017 at 9:44 pm

      Thank you Suresh!

      Reply
  5. Kalyan says

    August 3, 2017 at 4:45 pm

    Hi Vishal
    When you say “Better than competitors”, do you mean that you look only for companies which are industry/niche leaders?

    Reply
  6. roshan jain m says

    August 3, 2017 at 4:55 pm

    Superb …. How to do valaution and DCF methods…. do u provide any class for learning….regards

    Reply
    • Vishal Khandelwal says

      August 3, 2017 at 9:45 pm

      Hi Roshan. Pls see here.

      Reply
  7. Manojkumar says

    August 3, 2017 at 5:08 pm

    Hi Vishal,
    You are talking! I was always thinking how to compile things to filter most out. What a useful analysis. Very precious for me!
    Thanks for sharing your hard work with the world!

    Reply
    • Vishal Khandelwal says

      August 3, 2017 at 9:44 pm

      Glad to know that, Manoj. Thanks!

      Reply
  8. rajeev malik says

    August 3, 2017 at 6:09 pm

    I lived the way you have summarised your approach to investing- simple and concise. I also appreciate the ‘open- heartedness’ & your spirit of sharing your knowledge; few share with such honesty and sincerity.

    Wish you lots of success!

    Reply
    • Vishal Khandelwal says

      August 3, 2017 at 9:43 pm

      Thanks Rajeev. All the best!

      Reply
  9. Vinay says

    August 4, 2017 at 4:52 am

    Hi Vishal,

    First of all, I’m a big fan of you. I was always fascinated by your write ups.
    Thank you for showering your knowledge on us.

    Needless to say, this is one of the best posts I have read in recent times.

    Reply
    • Vishal Khandelwal says

      August 4, 2017 at 9:27 am

      Glad to know that, Vinay. Thanks for your kind words. Regards.

      Reply
  10. Amit Kumar says

    August 4, 2017 at 8:37 am

    Thanks for this post. Any framework for understanding the business? You can almost never say that you know a business and an industry 100%. What level of understanding and detail is good enough? Would love if you can explain in future with a post on how you go about understanding a business.

    Reply
    • Vishal Khandelwal says

      August 4, 2017 at 9:26 am

      Hi Amit. Thanks! Will write something on this. But this post may be of some help to you. Regards.

      Reply
  11. Dr. Jaswant Gandhi says

    August 4, 2017 at 10:55 am

    Deeply appreciate your hard work Keep it up God Bless You

    Reply
    • Vishal Khandelwal says

      August 4, 2017 at 7:26 pm

      Thanks Dr. Gandhi! Regards.

      Reply
  12. sachin says

    August 4, 2017 at 4:29 pm

    Thank you Vishal. This would be very good reference guide for new investors.
    Best of luck on amazing job you and team are doing for investor community.

    Reply
    • Vishal Khandelwal says

      August 4, 2017 at 7:26 pm

      Thanks Sachin! Regards.

      Reply
  13. Mehul Dadia says

    August 21, 2017 at 10:29 am

    Hi Vishal,
    Thanks a lot for sharing this. This is a very Illustrative and extremely useful.
    Really appreciate your hard work

    Reply
    • Vishal Khandelwal says

      August 21, 2017 at 2:13 pm

      Thanks Mehul!

      Reply
  14. Shashank says

    September 24, 2018 at 8:43 am

    Hi Vishal

    I started reading your blogs some time back only and really liked your way of writing.
    I am facing bit challenge in findig a topic on your post. Like there is no search option to immediately search a required topic of interest or in case i want to find an article. Only way is to go through complete list again.
    Please let me know if there is another way to search article on your post

    Thanks
    Shashank

    Reply
  15. Asim Kumar Mondal says

    August 18, 2019 at 1:50 pm

    sir, please please make video on this screening system. finology, sagar rv they are charging 15000 rs for this investing technique. can we get this from you for free?

    Reply
  16. Nandhan says

    April 14, 2020 at 4:46 pm

    Hello vishal
    Very very informative with free of cost .God bless you.

    Just one clarification
    At the top you mentioned stock screening criteria (7 to 10 years)
    Does it mean that stock should fulfill all the criteria under this screening criteria at least from 7 to 10 years timespan?

    Reply
  17. navneet says

    July 23, 2022 at 2:12 pm

    hello Sir
    you didn’t mention the selection criteria?
    I checked image as well.
    am I missing anything?
    Thanks

    Reply

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