Millionaire in the making by stock investing

Author thanks Rameshbabu Velidi ,super moderator of gsnindia.com
for this article.


Long term investing -Momentum based

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Newton’s Second Law of Motion is creating a new class of millionaires.
And it’s doing it at light speed.

All you need is two stocks to make 10000 into 1 million!

You may not remember much about your physics classes in school. But you likely remember Newton’s Second Law:
A body in motion tends to stay in motion.

This fundamental force of nature is the reason an elite group of traders and investors are restricting their investments to only the fastest-moving stocks in the market. Why?

First of all, because "the trend is your friend."

These companies lead the nation – and the world – in innovative products and services, sales growth, high returns on equity and blockbuster earnings. And therefore their share prices tend to "stay in motion" – in a pronounced upward trend. And,
Second, because the profits from doing so are nearly unbeatable.

Whether the major indices move up or not,it is irrelevant to investors riding the nation’s sizzling momentum stocks
This is about jumping on momentum stocks that are stripping the paint off the rest of the market, and selling them when we find something moving even faster.
What do these great guys have in common?

John D. Rockefeller made his fortune in oil.
Andrew Carnegie built his empire on a foundation of steel.
Cornelius Vanderbilt discovered his road to wealth in transportation.

Each of these titans "seized the day" and made their big move in an industry with unlimited potential and universal demand.

The Secret of Building Significant Wealth

The secret is simple, but ignored time and again.
In a nutshell, the most successful investors build wealth by finding a few companies with a product or service that can't quite keep up with demand. These gurus unload their losers quickly, and ride the long, soaring profit waves of their few BIG winners. The money they make from those winners overwhelms the losses from their losing stocks.

In other words, they aim at the right targets and swing for the fences. They're interested in hitting homers, not singles or doubles.

Look for stocks that are on the brink of monster growth because of reasons that are sound - sales, operating margins, profitability, strategic vision, recent emergence, and a product that people can't do without

Want to know how two carefully chosen stocks could turn $10,000 into $1 million?.

It boils down to pure mathematics.

If you invest $10,000 in one stock and it rises ten-fold, you now have $100,000. If you then take that money and reinvest it in another stock that rises ten-fold, your $100,000 will be worth $1 million dollars.

How difficult is it to find a stock that rises ten-fold? If you know what you're doing, it's not that hard.

How to Find "millionaire" Stocks,Big Winners with Momentum?

According to Sir Isaac Newton, "a body in motion tends to stay in motion." This law applies to certain stocks.

WHAT ARE THE CHARACTERISTICS OF GREAT STOCKS?

Based on big movers of the past,
here are ten of the factors that help us find stocks (like the one I mentioned) with momentum that has only just begun...

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1.They were an IPO within the past eight years.

2.They have annual earnings growth of at least 24%.

3.The average percentage increase in earnings for the current quarter is at least 34%.

4.They have a P/E ratio of 31 or more.

5.They have a relative strength rating of 85. (That means they are already outperforming 85% of the stocks in the market before they make their MOVE.)

6.Their relative strength has been growing for at least the past six months.

7.They have an average of at least 5 million shares outstanding.

8.They have average daily volume that exceeds 75,000 shares.

9.Their industry group is in the top 30% of the market.

10.They have a median stock price of Rs 1000 plus.
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When you boil it down this way, it may seem as though the process is purely a numerical exercise.
But, like most things in life, it's not that simple.

First of all, you must know exactly how to apply those qualifications to different sectors of different industries under different market conditions.

Secondly, you need access to a proprietary database that contains the relevant data on more than 9,000 publicly traded companies.


Thirdly, you must be qualified to interpret the mountain of quantitative and qualitative information that you uncover. That takes years of experience.

Finally, even if you have the knowledge, the skills, the contacts and the money to ferret out these few stocks, you would need to spend hundreds of hours screening all the potential candidates.

Timing Is Everything

YOU NEED TO BE guided on how to earn and also how to protect profits.

The strategy is twofold:

1. Buy the stock before it blasts off.
find a company that is about to begin its big move upward.

2. Sell it as close as possible to its highest point.

you need to put a "sell stop" below every recommendation, and if the stock goes down that point,then you sell to lock in your profits or protect yourself from significant losses.
HAVE A SYSTEM WHICH DOES THIS[

B]The beauty of this system is that as the stock bursts into the profit zone, you need to gradually moves the sell stop upward behind it. The higher the stock goes - and the bigger the profits - the higher the sell stop goes. As long as the stock is moving up, you never think of a sell.[/b]

"That's the secret to uncovering a stock that rises ten-fold."
"You never, ever sell your winners early. You always cut any losses that develop quickly, and let those profits just continue to run and run."

Even if the economic recovery is not going to set records this year, facts point out that "it doesn't really matter for select group of stocks. When a company does all the right things - increases sales, pays down debt, buys back shares, and grows at a double- or triple-digit rates - the market will reward its shareholders.

pS; ARE THERE ANY SUCH INDIAN STOCKS NOW AVAILABLE? Awaiting answers------

rvlv

Hi rvlv,

Only one company comes to my mind....ITC..buy it, shut it and forget it till it multiplies 10 times.

Mainak

Hi Mainak,

thanks .your response is so quick.
I too have it in my mind.
but dont have data to check it up
take care
rvlv

What about TCS...?

Hi Jigs

dont believe in Technology stocks...changes too fast to keep for 10 years.

mainak

Hi
I endorse the thought about ITC.
In FMCG.. there are HLL, Godrej Consumer, Marico which show promise. Will welcome comments.
Thanks

ITC, Hindalco would do the trick....

all the best..

ganeshhity

Shouldn't we keep some leading Auto Companies- Bajaj Auto/ Maruti and of course Tata Motors