In 2003 I recommended a stock called TASER to my customers. Everything about it looked great. Price, volume and the X factor were all there. I recommended it in the late $20′s and although we got stopped out once we did get back in again and rode it to $290.

Same with HANS in 2005. They always have the same characteristics. The key is having the patience to wait for these characteristics to show and then have iron discipline to stick with them for as long as possible. That is much easier said than done.

What are these characteristics? Glad you asked me

1) They are always relatively new companies. When I say new I do not mean Initial Public Offerings. I.P.O.’s but there one huge run up in price always occurs in the first 10 years of the listing. Common business. The first ten years is where the massive growth is. After that things plateau out.

2) All time highs. Every super stocks I have snagged has always been at all time highs in price. Forget stocks that have been around 30 years and at trading at new lows, etc. The very best stocks in each cycle will be at the highest price it as ever been at. It’s usually because of point one above. They are new, rapidly expanding companies and no-one knows how to price it all in. Hysteria and bubbles can occur. This will never happen with a 30+ year stock in an old industry.

3) Volume spikes. You need institutional buyers to flood in. Watch the relationship of volume compared to the stocks float. When the big institutions buy these stocks they usually go on a 2 year+ trend.

4) The X factor is they usually have a big story behind them. In 2003 there was a huge security scare with the war in Iraq and TASR guns for law enforcement was all the rage. I guess it was anew product at the right time and you can imagine the orders they were taking in from just about every police force not only in the U.S.A. but from around the world. In 2005 HANS came out with a new energy drink that was taking the USA by storm. There’s always a big story behind a big stock price rise.

When you find these stocks. And I am talking about stocks that can make you 500%+ returns you have to trade them correctly. You have to know where to enter, how to exit and how much to trade with. When you get it right it can be like winning the lottery.

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