Last weekend, I worked with ChatGPT to create a scoring system for evaluating stocks. I started by coming up with these categories (in no particular order):

1. Dividend %
2. Dividend direction
3. Stock direction
4. Dividend frequency
5. Low price range
6. True range
7. Price per share

After I established the categories, I needed to figure out the possible states for each one. For example, for “Stock Direction,” I came up with these states:

a) Staying flat
b) Rising slowly
c) Falling slowly
d) Rising quickly
e) Falling quickly

I went through each category and assigned the states I thought were important based on my goals (I’m all about cash flow). Once I did that, I realized I had no idea how to create a scoring system without getting confused by all the different scenarios. My brain started spinning because one category seemed important, but not so much if something else was happening in another category.

So, with my head in a twist, I asked ChatGPT for help. After going back and forth about my goals, categories, and states, it created a scoring system for me. When I reviewed it, I made some changes, like giving different weights to the categories and scores to the states. But overall, it was easy to do because ChatGPT had organized everything in a way that made sense.

Now, I have a system to rank and compare stocks. I evaluated one stock, and it felt good to see a final number. However, I realized that my criteria are pretty strict if a stock is going to rank high on my scale. I’m not sure if that’s a good or bad thing yet. I want to use Robert Kiyosaki’s strategy, where after reviewing 100 stocks, you find one to buy. I have a list of 500 stocks, so based on his strategy, I should end up with about five that meet my higher criteria.

But what if none of them meets the criteria? I’m not even sure yet what a “high enough” score is because I haven’t reviewed enough stocks. If this happens, I may need to adjust the point system or rethink my categories. Maybe I’m being too picky with the dividend percentage or something else.

Another thing I have to consider is timing. My scoring criteria might be too strict right now, but during a different phase of the stock market, they might be perfect. It’s hard to tell if my scoring system is really solid yet, but the only way to find out is to use it, test it, and see what results I get.

On the other hand, if I find too many stocks that meet the criteria, I’ll know my scoring process is too loose, so it’s going to be an interesting balancing act over time.

One weakness of the system is that the scores might give me a false sense of security. I know that past and current performance doesn’t guarantee future results, but the scores could help me get a better idea of what to expect.

Also, I’ll need to review each stock’s fundamentals. I want to be sure the business is solid: is it losing sales? Is it managing its cash well? Is it liquid enough? This will help me decide whether to hold or exit a stock, though I still need to come up with a solid exit strategy.

That’s where I’m at for now. I’ll keep you updated as I review more stocks and see how things go!

Happy Investing!