The best way to make money in stocks is to own stocks that compound at high rates over many years.
Above are some of the most recognized stocks in America with their stock growth rates and profit growth rates during the 1990s.
Notice the Leaders of the 1990s (on the left) were the stocks that had the best profit growth of the bunch. The Laggards of the 1990s (on the right) had mediocre profit growth.
My research points to profit growth driving stock growth. By investing in companies with the best profits, we end up having great stocks.
Also, the companies with the best profit growth each year — Cisco (CSCO) and EMC (EMC) — gave their investors some of the best returns on their money. So the faster the profit growth, the better.
