Why write your criteria down at all
Without a written checklist, it’s easy to unconsciously apply different standards to different stocks — stricter on one because a headline made you cautious, looser on another because someone you trust mentioned it. Writing the criteria down before you start research forces the same standard onto every company, including the ones you already have a favourable opinion of.
A checklist also makes your own reasoning reviewable later. If a stock you researched turns out badly, having the actual checklist you used at the time makes it possible to tell whether the process failed or the outcome was just bad luck.
The three parts of a working checklist
A useful checklist usually has three distinct kinds of items, and conflating them is a common reason checklists stop being useful. Splitting them out keeps each one doing its actual job.
1. Numeric filters
These are the criteria a stock screener can test directly — dividend yield, PE ratio, debt-to-equity, and similar. This is the part most people think of first when they hear “screening criteria,” and it’s the fastest to check. See how to find stocks by screening criteria for how to turn a goal into this kind of filter.
2. Qualitative checks a screener can't run
Things like “does management own a meaningful stake in the company,” “has revenue composition shifted significantly in the last two years,” or “are there unresolved related-party transactions in the notes to the accounts” can’t be filtered for automatically, but they’re often exactly the kind of thing that changes whether a stock passing the numeric filters is actually worth the research time.
3. Disqualifiers
A short list of conditions that rule a stock out regardless of how well it scores elsewhere — for example, an auditor’s qualified opinion, a recent restatement of financials, or a sector you’ve decided to avoid entirely. Disqualifiers are deliberately absolute: the point is to stop a strong score on other criteria from talking you out of a rule you set for a reason.
An example checklist, put together
For an investor prioritising income with a reasonable safety margin, a first-draft checklist might look like this:
- Dividend yield above 4%, sustained for at least three years
- Payout ratio under 80%
- Debt-to-equity below the sector median
- Read the latest annual report’s risk factors section in full
- Disqualify if there’s a qualified audit opinion in the last two years
Five items, three of them checkable through a screener and two that require actually reading the company’s disclosures. That mix is deliberate — a checklist made up entirely of numbers misses the things numbers don’t capture.
Keeping the checklist honest over time
A checklist is only useful if it’s applied the same way every time, including to stocks you already like. The temptation to make an exception “just this once” is usually where a checklist stops doing its job — if a rule keeps getting waived, it’s worth asking whether it should be a rule at all, and changing it deliberately rather than ignoring it case by case.
Sources
This page summarises publicly available guidance on building a personal screening checklist. It is not written or reviewed by a named stockscreener.asia team member — for a hands-on walkthrough of building a Bursa Malaysia screener, refer directly to the primary source below.