Page 1048 - How to Make Money in Stocks Trilogy

Buying Checklist 35

So instead of picking stocks based on hype and hunches, focus on the facts.
Use the Buying Checklist to make each stock prove itself before you
buy.
Think of using this checklist like building the foundation of your home. If
you want to create a solid portfolio, don’t start by cutting corners and using
cheap, inferior materials. Take the time up front to do it right. If you focus
on stocks that have these CAN SLIM traits, you’ll be creating a solid foun-
dation for success rather than a shoddy structure that more closely resem-
bles a house of cards.
Stay disciplined and picky. Only about 1% to 2% of stocks will make the
grade, but that’s the point: You’re not looking for unproven or run-of-the-
mill companies. You only want the best-of-the-best A players on your team.
The Buying Checklist will help you build that winning lineup.

• CHECK THE CHART BEFORE YOU BUY •
Make sure your stock also passes the “Chart Analysis” section of the
checklist before you invest. We’ll get into how to do that in Chapter 6,
“Don’t Invest Blindly: Use Charts to See the Best Time to Buy and
Sell.”
You’ll find chart-reading is the most important investing skill you’ll
ever learn. And once you know what to look for, it’s not that hard to do.
You’ll also find features like the IBD 50 and Your Weekly Review do a
lot of the checklist legwork for you. They highlight stocks near a poten-
tial buy point and note what kind of chart pattern they’re forming.
So even as you’re still getting familiar with charts, you can use IBD
stock lists and the Simple Weekend Routine (Chapter 4) to catch
winning stocks before they launch their big moves.