Bound for Growth: How to Pick Winning Stocks Using Industry Analysis by David Wanetick

PART ONE

KNOW WHAT 
YOU'RE BUYING 

CHAPTER 1

Introduction 

Buying a stock is like buying anything else. You must know what you are pur- 
chasing; if you don’t, you probably won’t be happy with what you get. 
But what do you get when you purchase a stock? Quite simply, you become 
a part-owner of the business whose shares you hold. Thus, stockholders share in 
the bounty of successful businesses. The stock market eventually rewards share- 
holders of prosperous companies with rising stock prices. Also, shareholders of 
growing companies often benefit from increasingly generous dividend payout 
policies. 
There are, however, no assurances that you will reap such rewards. After all, 
investing in stocks is risky business. Stocks of poorly managed companies are sure 
to lose value over the long term. Also, dividend payouts can be reduced or even 
eliminated. 
So then the question becomes, How can you maximize your purchase of 
winning stocks while minimizing your exposure to losers? I already gave you the 
answer! You must know what you are buying. 
But wait! Buying a stock is not like buying apples and oranges. For heaven’s 
sake, average people do not know how to compare one stock against another. 
One of the goals of this book is to demystify the process of profitably invest- 
ing in stocks. Too many would-be investors avoid the stock market because they 
believe that they lack the intelligence to successfully invest. These people think 
that choosing good stocks requires the application of some kind of arcane alchemy. 

Bound for Growth: How to Pick Winning Stocks Using Industry Analysis by David Wanetick