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Sunday, September 14, 2008

5 Rules To Pick Winning Stocks!

I've simplified the method to pick winning stocks, after reviewing the methods adopted by Warren Buffett and Adam Khoo.

The 5 Rules to Pick Winning Stocks are:

  1. Competitive Advantage – company must have sustainable monopoly status or have characteristics which is difficult to replicate to protect their market share.
  2. Consistent performance with growth potential - measured by ROE, profit margin
  3. Low or no debt – debt/equity ratio
  4. Price is right – share price lower than intrinsic value
  5. Time is right – stock on uptrend, ie. breaks out and above 20/50 DMA.

I'm more a TA person than fundamental person. But I know whether a company is good or not, without the need to go through exercise 1 to 3.

I'll will time the market before I buy using my Big-Picture Approach. I know when to buy and when to sell using my Crystal Ball!

So when should you sell your value stocks?

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DISCLAIMER: All contents in this blog are for educational and informational purposes only and should not be construed as investment advice regarding the purchase or sale of stocks or any other investments. Please consult with your financial advisor before making an investment decision regarding any mentioned investments.
I assume no responsibility for your trading and investment results.
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