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A vital point is these rules are not based on our personal opinion, our beliefs or those of Wall Street's analysts and experts. Investor's Business Daily built models of the most successful stocks and investors of the last half-century. We analyzed all their common characteristics, what variables occurred before the best stocks had huge advances and how these variables changed when the stocks topped. So these rules and principles represent how the market actually works. If you ignore them and rely
instead on personal opinions, feelings or emotions, you are potentially arguing with how the market has functioned for 50 years and you will likely make more costly mistakes.
If all 20 rules are carefully followed (not just the ones you like), your investment results can 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 stocks selling at $15 a share and higher.
4. Learn how to use charts to spot sound bases and exact buy points. Confine buys to these points as stocks break out on big volume increases.