500 best-performing stocks during the 1953–1985 period had an average relative strength of 87 before their major price increase actually began. [The relative strength measures a stock’s price performance during the past twelve months compared to all other stocks. For example, a relative strength of 80 would mean that the given stock outperformed 80 percent of all other stocks during the past year.] So, another basic rule in stock selection is to pick the leading stocks—the ones with the high relative strength values—and avoid the laggard stocks. I tend to restrict purchases to companies with
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