Tutorial: build a watchlist that is actually useful

Most watchlists are hoarding with extra steps: forty tickers, no reasons, no plan. A useful watchlist is short, has a thesis attached to every name, and tells you when to act rather than asking you to remember.

1. 1
   Find candidates with a filter, not a feeling

   Open the Screener and start from a question, not a ticker. "Wide moat, growing revenue, not obscenely priced" is a question. "Stocks I heard about" is not.
2. 2
   Apply the one-sentence test

   For every candidate, write why it is there in one sentence. If the sentence is "it has been going up" or "everyone is talking about it", cut it. This single rule will remove most of your list, which is the point.
3. 3
   Set the price where you would actually buy

   Use the Alerts tab on the stock page. Decide now, while calm, what price would make this attractive, and set an alert there. Deciding in advance is the whole trick: it removes the moment of panic from the decision.
4. 4
   Set an alert for being wrong, too

   Set a second alert below your thesis-breaking level. If it hits, you do not automatically sell, but you do automatically re-read your sentence and ask whether it still holds.
5. 5
   Review it monthly, and prune

   Anything that has sat there for six months without you wanting to own it is not a watchlist item, it is clutter. Delete it. A list of eight names you understand beats forty you do not.