by Marc Lichtenfeld, Healthcare Expert
Wednesday, October 28, 2009: Issue #1125

When it comes to investing, how do you find the "Holy Grail?" Does it even exist?

Over my 19 years of stock market experience, I've searched high and low for the answers.

One of my first steps was to plow into technical analysis. I studied everything I could, believing that charts could predict a stock's direction. I even became a trained technician, finishing two out of the three exams required to be a Chartered Market Technician. I never took the third. While I believe technical analysis is useful, it didn't provide the answers I was looking for.

In 2005, Avalon Research Group hired me as a fundamental analyst. While at Avalon, I worked with two of the greatest contrarians in recent decades and passed the exam required to be a NASD-licensed financial analyst.

But you know what? As valuable and powerful as that education and knowledge is, the real answer is something much simpler…

Forget Fantasy Land… This is the Only Proven Method in the Real World

I'm often asked how I pick winning stocks for subscribers to my small-cap healthcare stock service, Access, and Xcelerated Profits Report readers.

My big secret: I work very hard at it.

There is simply no substitute for hard work.

While "black box" technical programs spit out stocks that are supposedly destined to rise and some quantitative models claim sky-high accuracy, if you want to consistently pick winners, you need to do the research.

That doesn't mean quantitative and technical analysis doesn't work (I firmly believe they have their place, either to generate ideas or establish risk parameters). But if you want to make money in the stock market, you need to roll up your sleeves and do the work.

I wish it were more exotic than that. Heck, it would probably be easier to sell my products if I could convince readers that I had built an amazing robot that did nothing but provide me with ticker symbols whose prices will be 100% higher 30 days from now.

But that's fantasy land. Here's how it works in the real world…

The F.I.R.S.T. System – A Powerful Five-Step Stockpicking Strategy

I took the research format that I learned at Avalon and tweaked it for the healthcare sector. The methodology that I came up with is called the F.I.R.S.T. system – an acronym for my five-step process…

• Financials: I always begin my research by looking at the company's financials.