Fortunately, most actively traded, and so fairly liquid, stocks are able to be screened online, and/or through frequently updated CD services, via the computer.

You may thus, in a matter of minutes, set up your desired parameters, apply them to this smaller universe of available stocks, and so winnow the field down from many thousands to a more manageable few dozen or so different issues. These, in turn, may be further filtered with more refined criteria, all while you sit at home in leisure.

Another sterling record is that of value investor or contrarian Al Frank whose Prudent Speculator recommendations have provided 19-20% compound annualized total returns over both the last ten and twenty years. Mr. Frank, according to his book, The Prudent Speculator - Al Frank on Investing, emphasizes a variety of low price to value standards, as well as low company debt and relatively high return on equity, in his selection criteria.

As I prefer an approach somewhat similar to Al Frank's (though I do not claim to capture his recommendations' excellent returns), I'll show the stock selection use of the computer by giving an illustration of fairly typical value criteria.

Next, put in your screening criteria and use them to reduce the thousands of available assets to only a few score.

Here, for example, is one initial set of generic value parameters:

• Return on equity (ROE) 15% or more;
• Debt to equity 1 or less;
• Price to earnings ratio less than 10;
• Price to book value 2 or less;
• Price to sales (revenue) 1 or less;
• Price to cash flow ratio 5 or less.

Applying those guidelines reduces a selection pool of about 6000 stocks to only 69 (per the Schwab screening tool effective at the close of business 8/17/04).

I screen the results further by culling from those selected stocks the ones with the lowest debt to equity and price to sales ratios. Today these turn out to be stocks with D/E .33 or below plus P/S .5 or below.

35 stocks remain after applying those two filters.

I distrust the accuracy of any single stock selection tool and so examine these 35 stocks still more by looking them up on AAII's site and both double-checking and further refining the criteria.

Here, for instance, I also look for which stocks do or do not pay dividends, check the payout ratios (must be .5 or less), see if their current ratios are 2 or above (a plus, but not essential), note the market capitalization (generally, lower is better), and consider the latest stock prices (preferring not to purchase very low or very high priced stocks, with a few exceptions).

Finally, I use two or three online stock rating services (such as Quicken, Value Line, and Charles Schwab) to see if any of my remaining selections are highly ranked and, if so, why, and to note any recent news on the handful of stocks left for which rating service interest has now been found.

A thorough investor will not stop his or her analysis at this point but would take it as only a first step.

Other avenues of research might include review of a stock's info in the monthly "Standard and Poors Stock Guide," a check of the stock's report (if available) in "Value Line," reading analysts' assessments of the stock, studying the company's SEC filings, latest annual report, and recent quarterly reports, and going to a financial chat room, such as the comprehensive "Discussion Boards" available for a modest annual fee through The Motley Fool, to see what others may be saying about the value and prospects of the companies and their stocks which still have highest appeal for addition to your portfolio.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)