One of the things the readers have to carefully follow who join this blog and group is that they have to love what IBD teaches. If you have read the book 'How to Make Money in Stocks: A Winning System in Good Times or Bad' you will realize that their philosophy of investing is backed up by sound research and proven track record. If you are one of them who questions it and don't follow that, this group may not be for you.
But if you are one of those who wants to learn, then you are in the right place. We are all learning here and we will make it mutually productive for each of us.
***This material is obtained from www.investors.com website and all copyrights belong to William O'Neil and IBD publication. I'm taking the liberty of publishing this here to enhance our readers experience***
If all of IBD's 20 rules are carefully followed (not just the ones you like), your investment results should materially improve:
1. Consider buying stocks with each of the last three years' earnings up 25%+, return on equity of 17%+ and recent earnings and sales accelerating.
2. Recent quarterly earnings and sales should be up 25% or more.
3. Avoid cheap stocks. Buy higher quality stocks selling $15 a share and higher.
4. Learn how to use charts to see sound bases and exact buy points.
5. Cut every loss when it’s 8% below your cost. Make no exceptions so you can always avoid huge, damaging losses. Never average down in price.
6. Follow selling rules on when to sell and take profit on the way up.
7. Buy when market indexes are in an uptrend. Reduce investments and raise cash when general market indexes show five or more days of volume distribution.
8. Read IBD's Investor's Corner and Big Picture columns to learn how to recognize important tops and bottoms in market indexes.
9. Buy stocks with a Composite Rating of 90 or more and a Relative Price Strength Rating of 85 or higher in the IBD SmartSelect® Corporate Ratings.
10. Pick companies with management ownership of stock.
11. Buy mostly in the top six broad industry sectors in IBD’s New High List.
12. Select stocks with increasing institutional sponsorship in recent quarters.
13. Current quarterly after-tax profit margins should be improving, near their peak and among the best in the stock's industry
14. Don’t buy because of dividends or P-E ratios.
15. Pick companies with a superior new product or service.
16. Invest mainly in entrepreneurial New America companies. Pay close attention to those with an IPO in the past 8 years.
17. Check into companies buying back 5% to 10% of their stock and those with new management.
18. Don’t try to bottom guess or buy on the way down. Never argue with the market. Forget your pride and ego.
19. Find out if the market currently favors big-cap or small-cap stocks.
20. Do a post-analysis of all your buys and sells. Post on charts where you bought and sold each stock. Evaluate and develop rules to correct your major past mistakes.
Wednesday, October 1, 2008
Introduction to this Blog
Welcome Folks: We decided to create this blog to make it a high powered collaboration platform to share ideas by all the IBD readers in Westlake village area.
We are going to make this available to anyone who wants to contribute and share their insight along with any printed published material with written permission bibliography references.
We can use this to teach and inspire other readers of IBD and do the homework on certain investment ideas which we think are valuable.
We are going to make this available to anyone who wants to contribute and share their insight along with any printed published material with written permission bibliography references.
We can use this to teach and inspire other readers of IBD and do the homework on certain investment ideas which we think are valuable.
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