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Winners Take Care of Themselves

We originally bought Johnson & Johnson (JNJ) on July 21, 1994 at 23.19. The protective stop was at 19.88 or only $3.31/share. After buying, JNJ declined $.50/share before beginning a multi-year bull market. JNJ remained in our portfolio until we exited on a Dow Theory sell signal on September 23, 1999 at $91.13. Gross profit: +293%.

How do you get into these type of long-term winning trades while risking only a fraction of your original capital? Actually, the winners take care of themselves. They're the stocks that never decline far enough to hit our protective stop-loss! Since we use painstakingly precise entry points we keep the original risk small. If you do that consistently, you'll NEVER have a big loser! And it's the big losers that separate the successful from the unsuccessful in investing.

For years, JNJ "never looked back." We raised our profit-protecting stop-loss from time-to-time to lock-in profits (pros never let a winner turn into a loserónor should you!). You'll never have to wonder if a stop should be raised, we update stops for every portfolio stock in every issue.

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