Frequently Asked Questions

This website was built to give everyone access to a free and simple stock screening tool to find and select high-quality, undervalued stocks. The Good Cheap Stocks System is based on the investment methodology described by Joel Greenblatt in his book The Little Book That Beats the Market — a proven, systematic approach to long-term value investing.

The approach is rooted in straightforward financial logic, not guesswork. The methodology comes directly from Joel Greenblatt's book The Little Book That Beats the Market, which demonstrates that disciplined value investing can outperform market averages over the long term. In practice, The Good Cheap Stocks System screens for two key qualities simultaneously: stocks with a low EV/EBIT ratio — meaning they are cheap relative to their earnings — and stocks that generate a high return on capital, meaning they are fundamentally good businesses. We apply minor accounting adjustments to these ratios to make comparisons more meaningful across companies in different industries and geographies.

Stock price data is updated every trading day at approximately 07:00 AM CET. Financial statement data is updated quarterly as we receive it from our data provider.

The database covers stocks from 20 global exchanges. Financial sector companies and utilities are excluded due to the unique nature of their accounting structures, which makes comparison with other industries unreliable.

We recommend maintaining at least 20 stocks in your portfolio at any given time. As with any investment portfolio, holding more stocks will generally reduce volatility over the long run and improve diversification.

A company's market capitalisation is calculated by multiplying its total number of outstanding shares by the current share price. Our data shows that larger companies tend to be less volatile than smaller ones. To reduce risk, consider focusing on companies with a market capitalisation above $1 billion.

Statistically, it doesn't matter which specific stocks from the top-ranked results you choose to invest in — you're already selecting from the top few percentiles of all screened stocks. Investing in at least 20–30 of these stocks will help ensure adequate diversification.

The Good Cheap Stocks System is based on investing equal dollar amounts in each selected stock. This equal-weight approach keeps your exposure balanced across all positions.

The Good Cheap Stocks System is designed with a holding period of approximately one year. This timeframe is intended to maximise your after-tax return. After one year, you screen again for new stocks and build an updated portfolio based on the most current financial data and share prices. If a previously owned stock still appears on the list, you can decide whether to continue holding it.

Stick to the plan. The Good Cheap Stocks System assumes you will continue holding each stock for a full year, regardless of whether it remains on the screener list.

Yes. For best results, always use the most current screener output when adding new capital to your portfolio.

Financial markets are unpredictable in the short term. We strongly recommend committing to The Good Cheap Stocks System for at least three years before drawing any conclusions. There are no guarantees, but decades of evidence and sound financial reasoning support this as a sensible long-term investment approach.