In addition to my other pursuits, I am also a stock picker. Now, most financial advisors would say don't bother with stocks, only use index funds because they are low risk and you need to really know what you are doing to pick stocks. Instead of investing in index funds, I decided to learn what it takes to pick stocks successfully and will share how I decide whether a stock is a winner or loser.
Most important is to understand what you are buying. A stock is a share of a business. If the business makes money, you might make money. If it loses money, you might lose money. The "might" comes from the market. The share of the business you bought does not have a fixed value and instead costs what the market thinks it costs. So if you think a stock is worth more than the market does, you buy. If you think a stock is worth less than what the market does, you sell.
But how do you know what a business is worth? This takes some learning and practice. Nobody can ever say for sure and this it what makes stock picking a challenge. This uncertainty is where you must go to work. The game is to make reasonable guesses. A few books that help in making these reasonable guesses are "The Intelligent Investor" and "The Little Book That Beats the Market". After reading these books I have a little more certainty about buying or selling a stock.
What do these books teach? Essentially, one thing. Figure out how much money the company makes relative to their share price. If they make a lot of money and are cheap, buy. If they dont make money and are expensive, sell. The reason it isn't a perfect science is that you don't know the earnings for next year. If you can guess them accurately, then you can make a lot of money.