(MONEY Magazine) – Like any good family practitioner, Dr. Reginald Parker believes in protecting against loss. So he begins his financial exams with some basic questions: What stocks do the mutual funds own? What industries will be in demand over the next five to 10 years? Which parking lots are the most crowded? "I look at Wal-Mart, McDonald's," explains the Columbia, S.C. resident. "They give me ideas."

A self-described cautious man, Parker, 42, has $50,000 of his six-figure portfolio in individual stocks. His long-term picks are diversified among industry sectors and market caps. Out: stocks with no earnings. In: growth stocks with brand names, such as America Online, or value stocks with P/Es below market, growth of 15% or better and PEG (price/earnings-to-growth) ratios less than one. He consults Value Line to get a picture of a company's sales and earnings. His ideal time to buy is after a company's shares have plateaued for six to nine weeks and then have had a breakout in price and volume.

Among the stocks that have made the grade are big discount retailers like Home Depot, Best Buy and Dollar General. "In good times and in bad, these companies will hold their own," he says. For the bad times, he also owns utilities.

Parker's professional expertise has come in handy. In June 1997 he noticed Immunex, whose drug pipeline included Enbrel, an anti-inflammatory agent used for rheumatoid arthritis. He read reports on the drug's trials, got data on how many people suffer from the disease and talked to colleagues. Homework done, Parker bought Immunex at $34, before Enbrel was approved. Today it trades at more than $150.

--J.C.