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Mike -

You make a great observation; namely, companies in our other three boxes that are moving in an upper-right direction may be great stocks because you are buying a cheap business that is improving its operations. Your point is in synch with one of the most basic principles of Wall Street...regression to the mean; i.e., great companies become mediocre due to competition; poor companies improve due to new management.

So, if you have a way to scan the whole market and identify companies that are in, say, the lower-left box BUT that are moving in an upper-right direction, then I think you may find some great stocks.

You may also want to make sure these companies have clean balance sheets, as well as insider buying.

Please let us know what you find.

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