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Most people seem to have as much trouble controlling weight as they do selecting winning stocks. So each letter in the C-A-N S-L-I-M slogan stands for one of the seven basic fundamentals of selecting outstanding stocks. If most successful stocks exhibit these seven common characteristics at early emerging growth stages, these basics are worth learning. Here is the formula. Repeat it several times until you can recall and use it easily.

C = Current quarterly earnings per share. They must be up at least 20%.

A = Annual earnings per share. They should show meaningful growth for the last five years.

N = New. Buy companies with new products, new management, or significant new changes in their industry conditions. And most important, buy stocks as they initially make new highs in price. (Forget cheap stocks; they are usually cheap for a very good reason.)

S = Supply and Demand. There should be a small or reasonable number of shares outstanding, not large capitalization, older companies. And look for volume increases when a stock begins to move up.

L = Leaders. Buy market leaders, avoid laggards.

I = Institutional sponsorship. Buy stocks with at least a few institutional sponsors with better than average recent performance records.

M = The general market. It will determine whether you win or lose, so learn to interpret the daily general market indexes (price and volume changes) and action of the individual market leaders to determine the overall market's current direction.

- William J. O'Neil