C Current Quarterly Earnings per Share: The Higher, the Better
A Annual Earnings Increases: Look for Significant Growth
N New Products, New Management, New Highs: Buying at the Right Time
S Supply and Demand: Shares Outstanding Plus Big Volume Demand
L Leader or Laggard: Which Is Your Stock?
I Institutional Sponsorship: Follow the Leaders
M Market Direction: How to Determine It
The goal of the strategy is to discover leading stocks before they make major price advances. The system matches fundamental and technical analysis, and identifies companies with strong fundamentals, . It encourages buying their stock when they emerge from price consolidation periods and before they advance dramatically in price.
What To Do:-
1) You should buy stocks when they’re on the way up in price, not on the way down. And when you buy more, you do it only after the stock has risen from your purchase price, not after it has fallen below it.
(I agree. Even though a stock may look cheap, the fall may not have ended. Don't catch a falling knife!)
2) You buy stocks when they’re nearer to their highs for the year, not when they’ve sunk so low that they look cheap. You buy higher-priced stocks rather than the lowest-priced stocks.
(This bit would be the technical analysis portion, where volume and price action comes into play.)
3) You pay far less attention to a company’s book value, dividends, or PE ratio—which for the last 100 years have had little predictive value in spotting America’s most successful companies—and focus instead on more important proven factors such as profit growth, price and volume action, and whether the company is the number one profit leader in its field with a superior product.
(Same as Point 2) above. It's relevant if you are trading based on price and volume action.)
4) You learn to always sell stocks quickly when you have a small loss rather than waiting and hoping they’ll come back.
(True for all cases. Ok, maybe not for the hard core value investor. Learn the 8% cut loss rule, especially when you are on CFD.)
5) You also have to acquaint yourself with charts—an invaluable tool most professionals wouldn’t do without but amateurs tend to dismiss as complicated or irrelevant.
(This (TA) I've got to learn. It seems so so hard.)
6) Today it’s not enough for you to just work and earn a salary. To do the things you want to do, go the places you want to go, and have the things you want to have in your life, you absolutely must save and invest intelligently.
(I agree. Start early!)
7) It is the unique combination of your finding stocks with big increases in sales, earnings and return on equity plus strong chart patterns revealing institutional buying that together will materially improve your stock selection and timing.
(Very true.)
8) A stock’s chart must always be checked to determine whether the stock is in a proper position to buy, or whether it is the stock of a sound, leading company but is too far extended in price above a solid basing area and thus should temporarily be avoided.
What NOT To Do:
1) You don’t subscribe to a bunch of market newsletters or advisory services, and you don’t let yourself be influenced by recommendations from analysts, who, after all, are just expressing personal opinions that can frequently be wrong.
(I agree. Always do your known research. Analysts may have their own hidden agenda!)
This book has 4 stars based on 228 reviews on Amazon.
You can read the reviews from others and/or get the book from Amazon here:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
