So I've begun investing fairly seriously recently. My timeframe is short term 2-3 years...to grow money for a down payment on a home. A broker friend of mine recommended buying and selling once a stock reaches 20% gain or loss. I've been doing this...and am doing ok, but seem to lose on a lot of the upside on some stocks. I was wondering what other people out there do to quickly pick winning stocks (I do a lot of financial statement analysis) but am still unsure on what the best ratios and financial indicators are. Obviously P/E, ROE, current ratios are important. Not to be too muddled here, just wondering what other folks out there are doing or strategies they are employing to rapidly grow their stock accounts. Thanks!

I do not sell at 20%...its too low. I have been working with a 144% YTD return but it requires a little more work than I originally thought.So, this is what I do. You don't have to do it or anything, but I fugured some of it might help.1) Macroscopic Analysis:Where is the economy heading now. I keep this to a six month time frame. Now that has been the rough time frame I have held my investments, BUT its not because I keep it to 6 months. If something came along that gave me the premise to hold onto my investments longer, than naturally I would.Right now the economy is humming on Natural Resources, Energy (excluding Ethanol) and Defense/Aerospace. Now there are winners out there that are doing well, but this is where I am focusing my attention right now. From the current market turmoil, I am looking into the Financial Sector possibly as early as March.2) I take a peek at the layout of the companies in the Sector to see who is moving and shaking. Now I work with a narrow timeframe, so I look at high-side small caps (1Bn or more in MarketCap) and Mid Cap stocks. Because of their size, they generally have a higher volatility and do not offer dividends, which eat away at growth.3) Once I have narrowed my selection down, I research each company on three key metric: Growth, Volatily and DCF (Discount Cash Flow)With growth, naturally I am looking at the current rate of growth and their projected rate of growth for the coming year. For volatility I look at the Beta, obviously. Now I know the Beta is not an indicator of the future, as this is a metric derived solely off of historical performance...but it is a strong indication all the same...especially if it is small cap stock. With the Discounted Cash Flow, this is where my attention is focused the hardest. This is basicly taking the future cash value of the stock relative to today's value (its important here because it is focused on cash, not earnings as earnings numbers are commonly fudged, but you cannot fudge cash flow statements...so i have a stronger sense of the overall growth). This metric then lets me know if the future value is higher than the present or not, which if it is, than I am very likely to buy. Now I compare all of this relative to each stock I selected within the sector. I generally like to pick at least 3 stocks to compare and at least one of them is a small cap stock. Occasionally there will be a large cap in there (I sold Starbucks last year at $40/share). Small caps can be pretty tricky, so my recommendation is to keep it smart with them. I make sure the small cap is really owning a market niche. For example. The defense/aerospace industry was smoking hot this spring. So I did my little tea-leaves dance and stumbled upon Taser. I bought it in April at $9.80/share. Taser is the only company that makes what it makes, and what caught my eye the most (becuase you need to do some homework on the news reports to determine the niche) was the Sarkozy, who was not the President of France at the time, mentioned he wanted a Taser in every squad car in France. That's about 100,000 cars at $1200 a pop. So this obviously was a good thing and he was looking to be the prime candidate...which he turned out the be. In July, I sold my shares of Taser at $19.10/share. The market then tumbled, and no news on France. So, I went everything into Taser again at $15.23/share. Then, I sold them again at $17.34/share a few months later. Now I am floating around looking for more. The premise here is, be serious about what you want and don't limit yourself to a single percentage amount. Kick @$$ and take names, cause there is no reason why you can't own this market!!Good luck!And have fun with it!

I buy breakouts.I use fundamentals to choose WHAT to buy and technicals to determine WHEN to buy.A 20% loss is excessive. If you buy right, you should limit your your loss to no more than 10%.Once a stock is up 20%, you may want to shield some of the gain with a tight stop but let some ride because a stock cannot double without hitting 30%, 40%, 50% first.

That's a nice goal, but using stocks for short-term money is a bit risky. Yes, the market has always gone up in the long term, but it can go down in the short term. If you had done this in 2000, you might have been clobbered and needed years to get back to where you started. So much for buying a home. I have money in stocks, but it's money that I don't plan to touch for many years. For whatever it's worth, I look for companies with:a). P/E ratios that are close to their earnings growth rate or less than their earnings growth rate. (They're hard to find, but they're out there.)b). Strong cash flowc). Some sort of competitive edge over other companies in their industry. I never sell just because something hit a 20% gain. If the company is still reasonably valued and its prospects are good, then it's a keeper. I have five stocks that are up between 38-65% YTD. I've been using this as a starting point for eight years and have beaten the S&P 500 six of those years.Good luck. I hope that your strategy works for you!

I think better advice is to sell half when you reach a 30% gain; and always use a trailing stop loss. However, it really depends on the market environment. The thing about fundamental analysis is that it won't tell you when to buy; it only tells you what. The fact is, there can be a discouragingly big difference between a good company (strong fundamentals) and a good stock (appreciating rapidly). No one has figured out the perfect system so far. An approach will work great for a while and then it won't, as the market environment changes. So hang in there.

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