Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market: How to Achieve Superperformance in Stocks in Any Market

by Mark Minervini

MOST OF THE BIG MONEY made in bull markets comes in the early stages, during the first 12 to 18 months. However, by the time a big advance asserts itself in the broad market indexes, many of the best stocks may have been running up for weeks in advance. The question then becomes how you know when to jump on board before an emerging rally gets away from you and the very best stocks leave you in the dust. The answer: follow the leaders. Top-performing stocks will lead the broader market averages at important turning points. As a bear market is bottoming, leading stocks, the ones that best resisted the decline, will turn up first and then sprint ahead—days, weeks, or even months before the Dow, S&P, and Nasdaq indexes put on their running shoes. These leading names will break into new high ground while the major indexes are just starting to come off their respective lows. At this point, overall market conditions still look bleak to most investors and the news is still for the most part negative and cautionary. Later, the rally broadens, pushing up the indexes, which propels the front-runners even higher. Then sentiment begins to shift from fear to optimism. By paying close attention to the market’s leading names, you can be in the best stocks before they are obvious to the public. This is nothing new to astute stock investors who know what to look for. The legendary Jesse Livermore built his fortune by trading in leading stocks in the 1920s and 1930s. I made 99 percent of my ...