No matter how attractive the earnings per share, revenue growth, cash flow, or return on equity may be, I won’t consider buying a stock that is in a long-term downtrend. Why? I want to see some interest in the stock, preferably from big institutional investors. I’m not interested in being the first one to the party, but I do want to make sure there’s a party going on. The goal is to eliminate stocks that are not worth my time so that I can focus on contenders that have the best chance of being the next superperformers. Buying stocks in long-term downtrends will significantly lower your odds of
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