The process · Step 1 of 6
Quick test
Is the stock worth deeper analysis at all?
Why this step
The quick test is deliberately the first filter, not the last. Before a single metric is calculated, it answers a far more basic question: is this stock even in a state that allows serious analysis? If an annual report is missing, trading is suspended, or there has been no reachable investor-relations contact for months, then any further time spent on balance-sheet analysis or valuation is time lost.
It is deliberately low-threshold: no calculation, no balance-sheet metric — only observable facts you can find in a few minutes on the price page, the investor-relations page and the latest annual report.
The six checks
- Current annual or half-year report publicly accessible, without login or paywall?
- Continuous daily trading volume, without days of zero turnover?
- Stable market segment (regulated or open market), without a forced change?
- At least one full financial year in the current structure?
- Reachable, responsive investor-relations contact?
- Market capitalisation not so small that small orders move the price sharply?
Result
Two or more negative points → usually no deeper analysis, at most a very loose watchlist.
Typical mistakes
- Skipping the quick test because the story sounds promising — that is exactly when it pays off most.
- Treating a single positive point as sufficient without checking the other five.
- Checking the report only for existence, not for actual recency.
Example logic
Example (no reference to a real company): A stock passes five of six points — but an order of a few thousand euros moves the price by over five percent. Liquidity remains an independent warning sign that must be considered in step 6 when deciding position size.
Frequently asked questions
How long does the quick test really take?
With an annual report available and a price page with trading data, the six points can usually be answered in under ten minutes.
What if exactly three of six points are negative?
The 'two or more' threshold is deliberately low; three negative points usually argue for exclusion rather than deeper analysis.
Should the quick test be repeated at each re-check?
Yes — report, trading volume and liquidity in particular can change significantly between two review dates.