How to Make Money in Stocks Summary: Introduction

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Investing is not something you blindly jump into.

Not unless you want to lose all your money.

Fortunately, paths have been forged and there are valuable lessons we can learn from the mistakes of others.

Here are some of those lessons.

1. Buy stocks on the way up, not on the way down.

2. Buy stocks when they are near their highs for the year, not near their lows.

3. Sell fast when you experience a loss.

4. Don’t worry so much about a company’s book value, dividends, or price-to-earnings ratio. Focus more on profit growth, price and volume action, and whether the company is a leader in their field or not.

5. Don’t be influenced by other ‘experts.’ They are often wrong. Learn to make your own judgments.

6. Learn to read charts and spot the patterns that precede spectacular price advances.

Making money in the stock market is not that difficult. The majority of people have, with a little study and practice, the ability and intelligence to do so.

But you must put in the work to learn how to do it properly.

Start learning how to invest the right way. There is no such thing as too old or too young.

Additionally, you can begin with as little as $500. Gone are the days when you need to be wealthy in order to take advantage of the stock market.

The system for picking winning stocks outlined in this book can be explained through the CAN SLIM formula.

Each letter in this formula stands for one of seven principal characteristics that great winning stocks show during early development, right before they skyrocket.

Current Quarterly Earnings per Share. Higher is better.

Annual Earnings Increases. Look for high growth.

New Products, New Management, New Highs. Get in at the right time.

Supply and Demand. Outstanding shares with high volume demand.

Leader or Laggard. Buy the leaders in their field.

Institutional Sponsorship. Follow the ‘smart’ money.

Market Direction. Is it going your way?

The CAN SLIM formula is based on reality and data, as opposed to opinions, so it will not get outdated.

Read the next chapter here.

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