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How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition, 4th Edition by William O'Neil

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CHAPTER 20Important Time-Tested Proven Rules and Guidelines to Remember

1. Don’t buy cheap stocks. Buy mainly Nasdaq stocks selling at between $15 and $300 a share and NYSE stocks selling from $20 to $300 a share. The majority of super stocks emerge from sound strong chart bases of $30 and up. Avoid the junk pile below $10.

2. Buy growth stocks where each of the last three years’ annual earnings per share have been up at least 25% and the next year’s consensus earnings estimate is up 25% or more. Many growth stocks will also have annual cash flow of 20% or more above EPS.

3. Make sure the last two or three quarters’ earnings per share are up a huge amount. Look for a minimum of 25% to 30%. In bull markets, look for EPS up 40% to 500%. (The higher, ...

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