As a new investor (3 months) I believe I have made some mistakes and
have learned from them.
I thought I would post here what I believe now to be the right way to
do things maybe in doing so helping other new investors so they won't
have to lose money like I did.
This applies to a semi-long term investor,(1 to 5 years), I believe

1.)Pick a stock that is sold on one of the major markets NYSE, NASDAQ,
AMEX. Stocks sold on the OTC market do not have to follow guidlines
that the major markets have in place to be benificial to the investor
and also normally do not get the same attention as stocks sold on the
major markets

2.) Pick a stock that has a high volume daily trading average. This
means people are paying attention to the stock and when good news
comes out the stock will move up quicker as a result

3.)Pick a company whos business you understand. This will help you to
be able to determine if there exist a potential for growth in the
industry the company is involved in. Example - Warren Buffet's
Berkshire Hathaway Company invested in the Phillip Morris Company
after Phillip Morris bought General Foods. General Foods makes
products like Kool-Aide and Jello. Warren Buffet after being asked why
he invested in Phillip Morris said "I understand Kool-Aide"

4.) Pick a company that has been displaying steadily increasing
positive quarterly results for at least a 1 year period. 1 good
quarter does not necessarily mean the company is on the right track

5,) Pick a company that is easy to find news on and news is released
frequently. Also verify the news being posted is from a nuetral
source. Most "paid for" news articles will include a disclaimer
stating just that - the company putting out the article was paid by
the company the article is about. Nuetral sources will usually contain
both the pros and cons of investing in a company. Also check out the
company's S.E.C. filings as these too will contain the pros and cons
of the company's business.

6.)Pick a stock that responds logically to good news. Look at the
history of the stock and see that it went up when good news was
published and stayed there until negative news came out. Many stocks
act illogically and drop after good news or do not move at all (see
FHC)
Finding a stock that meets this criteria may be difficult to find, as
many stocks after climbing from good news also have a tendency to drop
as the result of people or institutions selling off the shares they
have been holding onto if they feel the profit is right. Another
reason the price starts to decline is interest in the stock sometimes
starts to fall off not long after the good news is released.
At least try to find a stock that stayed higher than the level it was
at before the good news was released

If anyone cares to add or take away from this feel free - This is just
my opinion thusfar of how it should be done