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How to Spot GameChangers Early

August 5, 2008

By Georges Yared, Editor, GameChangers

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It's hard for me to believe, but I have spent the last 30 years finding companies that change the game and make investors rich.

For the first 13 years, I did it for Dean Witter Reynolds (now Morgan Stanley), working directly with over 1,000 individual investors. I went on to run a large branch office in Chicago, then the whole Midwest region and finally was promoted to President & CEO of Dean Witter Canada. After Dean Witter sold the firm to a large Canadian bank, I returned to my roots–working with and discovering great growth companies that were changing how the game is played.

The more I learned, the more I refined my analysis to help me spot GameChangers early in the game, and that is still my passion. All of the really important revolutions are clear after the fact, but that's too late to make life-changing profits.

The most money you'll ever make in investing will come from spotting the big revolutions before others do. Let me show you how. Here are 10 characteristics to help you spot GameChangers early.

10 Hallmarks of a GameChanger

GameChanger companies share many characteristics that make them the best stocks to own. Here are 10 in particular that I look for when I analyze companies:

1. Pricing power: GameChangers are so dominant and provide goods or services that are in such demand that they are able to set their own prices. This gives them control over the all-important operating margins that Wall Street loves.

2. Market share: These companies either already dominate their sector or are growing market share faster than the underlying sector is growing.

3. Build a better mousetrap: They not only build a better mousetrap, they dominate the competition and know how to sell that mousetrap as well as–or better than–anyone else.

4. Quality leadership: GameChanger companies must have a passionate senior management team led by a dynamic CEO who can readily communicate the story to employees, customers, suppliers, Wall Street analysts and investors (see also, "If CEOs Could Change the World").

5. On the world's stage: With few exceptions and where appropriate, GameChangers adopt and implement a global strategy early in their development. Being a part of the world marketplace is no longer...