Page 472 - How to Make Money in Stocks Trilogy

342 INVESTING LIKE A PROFESSIONAL

A New, Better Way to Find Winning Stocks

At Investor’s Business Daily, we’ve developed an entirely different way to
search for winning stocks. That’s because after more than four decades of
historical research, we know top stocks show definite signs of strength
before they become exceptional winners. That confuses people who prefer
a bargain—the low-priced, unknown stocks they hope will take off and sur-
prise us all. As we’ve said, cheap stocks are cheap for a reason: they have
deficiencies that don’t allow the stock to progress. For a stock to move
higher, it needs earnings growth and strong sales, plus several other factors
that demonstrate it’s emerging as a new leader. If you catch such a stock at
the early stages, you will be able to capitalize on its enormous progress.
Remember, the greatest winners of all time, like Cisco Systems and Home
Depot, began their biggest price moves after they’d gained leadership in earn-
ings, sales growth, and the other factors described in this book. Some of the
critical data you need to start your search can be found in the IBD stock tables.
The unique IBD ratings are a way to spot potential winners before they
take off, so it’s important that you review these ratings daily. IBD’s stock tables
are different from anything you’ll see anywhere else. Proprietary SmartSelect
Corporate Ratings speak volumes about each stock’s performance and how
a stock compares to all the others in our database. The elements in these
ratings, which are numbered 1 through 6 in the accompanying chart, are
explained in detail here.

© 2009 Investor’s Business Daily, Inc.