How to Win Beat the Street

Picking stocks for a weekly contest is an ugly business. As Jim Cramer has said before, you might need as much as 20%-30% gains or more to win a stock-picking contest like TheStreet.com's Beat the Street.

So forget about otherwise quality companies like Johnson & Johnson (JNJ Quote) and Microsoft (MSFT Quote) or even Google (GOOG Quote) and Baidu (BIDU Quote).

Focus on ugly. We're going to the gutter here and turning over some rocks to see what we can come up with. Here are some basic rules to live by:

• Don't diversify. Diversification is fine if you're my grandma and you need steady income for an IRA. But you aren't. You're a cold-hearted killer trying to win a contest against thousands of other killers. Five stocks. All with the potential to skyrocket. That's it. Don't go crazy and don't fall in love with any one stock.
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