2. The Smell Of A Winner! Stock Market Training

Following on from the article “A Simple introduction to fundamentals” it is time now to get to the nitty gritty. The following information should be remembered even if you only remember one thing from this course it should be this lesson.

As I mentioned previously, the basics of business are here.

• Companies that are making buckets of money (revenue or Earnings), are good companies.
• Companies, that are making more money this year that last year, are good companies.
• Companies that are making more money this quarter than the same quarter last year are good companies
• Companies, that are making jumps in earnings that are larger percentages that the previous period, are “GREAT COMPANIES”

So……

“Only buy Quality Stocks”

” I want to win, therefore I buy only Winners”

The Liberated Stock Trader

This seems like ridiculous advice, right. It seems so simple, but it is so important.

But how do we buy only winners. A good friend of mine from University, let’s call him JonnyBoy, used to say, when he beat me at Joe Madden Football on on the Sega Megadrive……

“can you smell something, what is that…..oh yeah……the smell of a winner”

• Listen to what you feel makes perfect logical sense
• Listen to your wife, husband or partner, they are important people
• Listen to one of the most respected men on Wall St.

One of the finest books I have read on the topic of trading, has to be without a doubt How to make money in Stocks, by William J. O’Neil.

I am not trying to sell you this; this is one of the best investment books of all time selling over 1 million copies.  Also the author is the creator of the Daily US investors Newspaper Investors Business Daily, who by the way have a good website.

Anyway, to quote from Mr O’Neil’s Book.

“the percentage increase in earnings per share, is the single most important element in stock selection today”*

He also drives home the message

“my study of thousands of the most successful concerns in America, proved that virtually every corporate stock with an outstanding price move, showed Accelerated Quarterly Earning increases sometime in the previous 10 Quarters, before the towering price advance began” *

Read my next article to look at EPS, to understand it, and how to find it.

If you enjoy this article please leave a post, or drop me a mail. I would also be happy to tackle any questions you may have via a blog post

happy investing.

* Excerpt from How to make money in Stocks, by William J. O’Neil.

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