To many, a growth stock simply means a name stock or a stock with a lot of demand. Whenever speculative fever runs high, investors tend to overreach for popular stocks. Whether it’s growth or nongrowth, the all-important price-earnings ratio should always be the predominant determinant of stock prices.

To begin, Darvas dealt only in stocks which were “in tune with the jet age,” growth stocks. If a stock should move up to a higher box and stay there, he would buy it. For instance, if a stock had fluctuated in a 55 to 60 range, that would be its first box. If the stock should demonstrate its ability of staying in that box, he would buy it, and place a stop-loss order to sell a few points below the buying price.

As you’re getting your feet wet in the vast lake of growth stocks, you need to look at and understand statistics, pay attention to management and look for companies that are committed to research. Today, however, security analysts speak of management caliber, quality of research and other intangibles that are not measurable in dollars and cents.

What are growth stocks? If a stock yields five percent it can’t be any good. It has gone right on shrinking that one percent yield for many of the super growth issues.

To be a growth stock, according to prevalent Wall Street thinking, a stock should show a record of doubling sales and earnings in about five years because two or three years is too short to be indicative of future trends.

President John F. Kennedy called the salt water conversion project more important than putting a man in space. “The ultimate source of needed water is the ocean. A sizable proportion will, of necessity, be directed to salt water conversion.”

“The ultimate source of needed water is the ocean. Of total daily precipitation of 4,300 billion gallons, 3,000 billion gallons are lost through evaporation and transpiration of plants. Of the remaining 1,300 billion gallons, almost 90 percent is returned to the oceans.

Not too many investors would link growth with such everyday, unglamorous things as equipment leasing, automobile renting, business-credit checking and employment agencies. As our economy matures and becomes wealthier, the business service industries assume increased importance. A society well supplied with goods and money can afford the conveniences it desires. Furthermore, the growing size, complexity and specialization of business and government favor a host of business services ranging from tax advice to marketing research.

Foreign securities are the most frequently over the counter traded markets, and a growing number of experienced investors are buying them in search for profit opportunities. Over the counter buying is largely of institutional origin for participating in the rapid growth of the European Common Market.

The electronics market has been a popular investment area for decades. However, you should be extremely cautious about buying electronics stocks even after their recent sharply downward revision in market prices, for their price-earnings ratios are still generally high relative to the whole market, which is especially true of smaller, more speculative issues.

In order to keep military spending within its budget, the Pentagon from time to time has to cut back marginal weapons systems. With the number of weapons systems shrinking, small electronics firms have to go after more dollars per sales.

This historical piece offers some great insight.

The industry is confronted with a shakeout of great magnitude. Even disarmament would not mean the end of electronics despite the industry’s heavy dependence on government spending.

Disarmament or no disarmament, government expenditures for electronics goods and services would most probably remain at a very high level. “The nature of this armed truce,” said Dr. Harry Greenfield in “What Shakeout in the Electronics Industry?”

Closely allied with insurance stocks, which are fairly safe investments, are bank stocks, which share many of the same characteristics with insurance stocks. Higher interest rates mean more income while lower rates mean more business. As a group, growth prospects for the electric utility industry seem very favorable. Population growth, coupled with automation of industry, the home and the farm, are compounding the increase in use.

The electricity industry is aggressively exploring new major markets such as the introduction in Connecticut of electrically heated homes on a mass basis.