David Ryan: Stock investment as a treasure hunt

Here is the article.  

David Ryan has been the U.S. Investing Champion for 3 times and also worked for William O'Neil. He admits that whenever he buys a stock, he writes the reason for doing so because it helps him to identify the characteristics of a winning stock. It also helps him to learn from his mistakes. He believes that being disciplined will help one do better in the market. 

While selecting stocks, he avoids stocks under $10. he goes through about 4000 charts every week and lists down the stocks with strong technical action. 

He then evaluates the five-year earnings growth record and the last two quarters of earnings with the previous year's levels. The quarterly comparisons show whether there is any decline in the earnings growth rate. For example, a 30% growth rate over the last 5 years may look very impressive, but if in the last two quarters earnings were up by only 10% and 15%, it warns you that the strong growth period may be over. 

He suggests that relative strength of a stock is very important and it must be at least 80, preferably above 90. He prefers not to pick stocks that are over-extended from their base because many times stocks with highest relative strength continue to outperform the market for a long time. He prefers going with relative strength of 99 rather than 95. When the relative strength starts falling, he gets out of the stock. 

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He advises traders to learn from their mistakes and that's the only way to become successful. If you love what you are doing then you'll be a lot more successful.