My focus over the years has been on investing in the USA. Now that I’m focusing more on Australian investments I’m finding it difficult to live without all the US investment tools I have become accustomed to. Before I bemoan the dearth of freely available data and tools for the Australian market let me say it’s not all bad.

This excerpt from the excellent Hagstrom book ‘The Warren Buffett Way‘ has always stuck with me.

“Appearing on the PBS show Money World in 1993, Buffett was asked what investment advice he would give a money manager just starting out. ‘I’d tell him to do exactly what I did 40-odd years ago, which is to learn about every company in the United States that has publicly traded securities.’

Moderator Adam Smith protested, ‘But there’s 27,000 public companies.’

‘Well,’ said Buffett, ‘start with the A’s.’“

We’re lucky in Australia that there are only around 1200 listed companies of worthwhile size (total shares 1973 domestic, 81 foreign and 2191 total listed). That makes Buffett’s advice seem doable.

1,200 seems doable, but still brings thoughts of swimming in cement to mind. I prefer to have a little more method to my madness. So rather than start with the A’s, I start with companies at or near their yearly lows. This is easy to do with US stocks. Market Watch and Barchart both provide lists of stocks hitting 52 weeks low. Meanwhile, Australian investors need to trudge down to the newsagent and buy a copy of the Australian Financial Review, or compile their own list.

I opt for compiling my own list. At least once a week I go to the AFR share tables online and download the data into a spreadsheet. A quick macro later I have a list of shares at and within their yearly lows.

Here is my list from last Thursday.  Do any of these companies catch your fancy?

I then review the companies on the list, searching for ones of interest. Through this process I am slowly getting to know the top 300 companies trading on the Australian share market.

I do not recommend buying a company simply because it’s at its 52 week low. You do not want to catch a falling knife or water weeds. However, amongst the weeds you will find some great opportunities; stocks selling with a wide margin of safety and potentially rewarding situations.  Look for companies under going restructuring or being sold off on fear rather than for reason. Look for fundamentally strong companies that are temporarily out of favour or who have taken a bad but not fatal misstep. Look for companies with potential catalysts. Dive in and find companies where even if you get it wrong you’re not gong to loose much.

Those who prefer a momentum over a contrary style of investing can simply use the same data and screen for those stocks trading at their 52 week highs.

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