Page 1024 - How to Make Money in Stocks Trilogy

The CAN SLIM Investment System 17
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Think about all of the roller-coaster rides we had in the market during
those 15 years: The dot-com boom and bust, the 2003 bull market, the hous-
ing and financial crisis in 2008, and the bull market rebound in 2009.
The CAN SLIM Investment System’s independently tested performance
through all those cycles shows that if you stick to the Buying and Selling
Checklists we’ll cover together in this book, you can make—and
keep—significant gains in any type of market.

The 7 Traits of Winning Stocks

In How to Make Money in Stocks: A Winning System in Good Times or Bad,
Bill O’Neil gives a detailed description of each of the 7 CAN SLIM traits
and countless historical examples of winning stocks that shared those char-
acteristics. It’s the definitive guide to CAN SLIM investing by the man who
developed it, so I strongly encourage you to read that book.
Since the purpose of this book is to show you how to quickly get started with
the CAN SLIM Investment System, we’ll take a slightly different approach.
Again, let’s keep it simple and stay focused on what really matters most.
Here’s how we’ll do that.
First, I’ll give a brief overview of the 7 CAN SLIM traits and show how
they relate to the 3 “big rocks” I noted earlier. We’ll also go through some
CAN SLIM case studies so you can see how top stocks in the 2009–2012
bull market had these same traits before they surged.
Then in the next chapters, we’ll go step by step through routines and
checklists that will help you systematically spot today’s CAN SLIM stocks
and pinpoint the best time to buy—and sell—them.

The 7 Traits and the 3 Big Rocks
See the Buying Checklist for the specific numbers and ratings needed to
meet the benchmarks for the 7 CAN SLIM traits.

Big Rock #1: Only Buy Stocks in a Market Uptrend.
Take Defensive Action as a Downtrend Begins.
The “M” in CAN SLIM—market direction—may be the last letter, but in
many ways it’s the most important. To a very large degree, the difference
between making or losing money comes down to simply staying in sync with
the direction of the overall market (i.e., the major indexes like the S&P 500
and Nasdaq).