Perhaps the smartest way to succeed in the stock market is to invest for both growth and value. That means concentrating the bulk of your portfolio in stocks that pass the tests described on the following pages and holding them for the long term three, five, even ten years or more. For those in search of income, not growth, it means applying the same tests so that you don’t make any false and risky assump tions about the stocks you buy. This method is not based on buying a stock one day and selling the next. It does not depend on your ability to predict the direction of the economy or even the direction of the stock market. It does depend on your will. ingness to apply the following measures before you place your order. If you do that, you’ll find most of your choices falling into the growth, value, inpome and blue chip categories.
You’ll quickly discover that the number of stocks that meet all these tests at any given time will be low. So what you’re really looking for are stocks that exhibit most of the following signs of value and come close on the others. These should form the core of your portfolio.