The Johnny Punish Top 10 Rules

1. Washouts can be great places to find excellent, cheap stocks. But it’s hard to sort them out, so borrow a tactic from the geniuses in venture capital and own a basket of stocks plucked from the wreckage.

2. Follow the advice of investing icon Peter Lynch and keep your eyes open, so that you can spot popular trends that bring stock market riches. Just be bold enough to look beyond your own little circle to spot the truly big consumer trends, says Andrew Corn of E5A Funds in New York.

3. Invest in companies that have lots of net cash to support a growth plan, as long as its industry has a future — technology yes, buggy whips no.

4. Spotting game-changers early on can serve you well.

5. A company that knows how to innovate and revolutionize an industry may lead it for a long while.

6. You can make a lot of money by understanding when the market crowd is wrong.

7. Buying companies with good long-term prospects when investors are panicking can be a great wager.

8. Not all stocks getting bashed by vocal groups of critics are dogs. If the stock looks sound, stay with your position.

9. Spot a consumer trend early, and you may be richly rewarded.

10. Turnaround plays can produce big rewards, especially if you buy on signs of management confidence when everyone else is in fear. Buybacks can be a key signal. Turnarounds also require patience — so don’t invest so much in them that the ups and downs during the long wait keep you up at night. Of course, that’s a good lesson with just about any stock.