Get an Edge With Reward/Risk By Hewitt Heiserman About this article: Like playing poker, successful investing depends on assessing the odds of an uncertain outcome. Ideally, the stocks you own will pay big if your thesis is correct and lose just a smidge if the idea fizzles. This is smart money management; tilt the odds of success in your favor and over a lifetime of investing, small advantages compound into large sums. In this column, I show how to estimate reward vs. risk, which may give you an edge in 2009. To illustrate, we'll use Ensco International . Ensco provides offshore contract drilling services to the oil and gas industry. The Dallas, Tex.-based company, founded in 1975, operates around the world. Our analysis has three steps. 1. Reward. Here we try to figure out what the company is worth if it grows as analysts' expect. We assume the consensus is right, even though studies by David Dreman show the futility... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200. More Stories From RealMoney Durable Goods Up Move Down the Tech Food Chain Jobless Claims Still High Bulls' Tenacity Is the Big Question Mark Should You Buy It? Pharmaceutical Product Development Bad News Trumps All Support for Banks Holds, For Now Bummer, Yields Are on the Rise Money on the Line Makes a Big Difference Structured Products: Unsafe at Any Price MORE STORIES FROM REALMONEY

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