Invest In Stocks Having Big Growth, Not A Story.(A)(INVESTOR'S CORNER)

Byline: DAVID SAITO-CHUNG

Would you buy shares in a firm that made medicine by extracting lymph from cows? How about a lab firm that said its papaya juice-based product could cure pain from slipped discs?

In today's market, of course you wouldn't. But back in the 1980s, investors rushed into these and other companies that had nothing much more than a good story.

A story stock is a firm that promises a cure for cancer or sells something that looks like it will be in huge demand. A buzz develops, and the crowd sends it rocketing for a few weeks or months.

But once the hype fizzles, so does the stock. Story stocks swing, which makes them highly risky. The heady gains on their charts appeal to our feelings of greed. But in almost every case, the stock gives back those gains just as quickly. That makes it harder to know when to sell such stocks.

To do well in the market in the long term, focus your time and money on stocks with a track record of rising sales, earnings and share ownership by mutual funds and other large investors. You want a company that has already proven its growth, not simply promises it.

Those who invest in story stocks enjoy the adrenaline boost they get from ...