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<p>Preface xi</p> <p>Acknowledgments xvii</p> <p><b>Chapter 1 introduction to Buy and Hold 1</b></p> <p>What Is Buy and Hold? 2</p> <p>Who Should Buy and Hold? 2</p> <p>My Numbers: Background and Terms 3</p> <p>Now What? 3</p> <p><b>Chapter 2 Stock Selection 5</b></p> <p>What Comes After Large Price Moves? 6</p> <p>Myth: Stocks That Drop Least in a Bear Market Then Soar 7</p> <p>Stock Selection the Easy Way 8</p> <p>Two Tips for Stock Selection 9</p> <p>Buy Fallen Angels 10</p> <p>What Chart Patterns Appear Before Mergers and Buyouts? 10</p> <p>What Are Insiders Doing? 13</p> <p><b>Chapter 3 Book Value 17</b></p> <p>Book Value Defined 18</p> <p>Value Assets Properly 18</p> <p>Investing Using Book Value 19</p> <p>When Is Book Value Important? 19</p> <p>The Value of Hidden Assets 20</p> <p>Limits of Book Value 21</p> <p>Buybacks Lower Book Value 22</p> <p>Historical Research 22</p> <p>Price to Book Value: A Good Measure 24</p> <p>Small Caps: Best Choice 25</p> <p>Low Stock Price Rules! 27</p> <p>Book Value and Return on Equity 28</p> <p>What Is the Best Price to Book Value? 29</p> <p>Combinations and Performance 30</p> <p>Trading Strategy: Beating the Dow 31</p> <p>The Eight-Stock Setup 32</p> <p>Hold Time for Best Results 34</p> <p><b>Chapter 4 Capital Spending 37</b></p> <p>Is Decreasing Capital Spending the Holy Grail? 37</p> <p>Capital Spending Trends versus Performance 38</p> <p>Frequency Distribution 39</p> <p>Performance by Market Cap 40</p> <p><b>Chapter 5 Cash Flow 43</b></p> <p>Historical Research Review 44</p> <p>Cooking the Books 45</p> <p>The Numbers 46</p> <p>Is Increasing Cash Flow Good? 46</p> <p>Performance by Market Cap 48</p> <p><b>Chapter 6 Dividends 51</b></p> <p>Stock Dividends: An Explanation 52</p> <p>Historical Research Review 52</p> <p>High Yield, High Performance? 53</p> <p>Testing: Yield and Payout Ratio 54</p> <p>Which Is Best: Dividends or No Dividends? 55</p> <p>Surprise: Dividend Cuts Work! 55</p> <p>When Disaster Strikes 57</p> <p>Performance by Market Cap 58</p> <p><b>Chapter 7 Long-Term Debt 61</b></p> <p>The Numbers 61</p> <p>Is Debt Good? 62</p> <p>Sinking Ship: Taking on Debt 62</p> <p>Debt by Market Capitalization 63</p> <p><b>Chapter 8 Price-to-Earnings Ratio 67</b></p> <p>History Lesson 67</p> <p>Do Low P/E Stocks Outperform? 68</p> <p>P/E Trends Down: Good or Bad? 69</p> <p>Price and Earnings Combinations: Yawn 69</p> <p>Buy Small Caps with Low P/E 70</p> <p>High P/E: Time to Sell? 71</p> <p>Three P/E Tips 71</p> <p><b>Chapter 9 Price-to-Sales Ratio 73</b></p> <p>Good Benchmark: PSRs Below 1.0 74</p> <p>PSR Trend: Down Is Best 75</p> <p>Small Caps, Small PSRs Rule! 75</p> <p>Checklist: PSRs by Industry 77</p> <p><b>Chapter 10 Return on Shareholders’ Equity 81</b></p> <p>Low ROE Stocks Outperform: Why? 82</p> <p>ROE Trend Over Time: Yawn 83</p> <p>ROE Performance by Market Capitalization 83</p> <p><b>Chapter 11 Shares Outstanding 85</b></p> <p>Performance versus Shares Outstanding 85</p> <p>Event Pattern: Dutch Auction Tender Offers 87</p> <p>Should You Sell? 87</p> <p>Sell at What Price? 90</p> <p>Event Pattern: Common Stock Offerings 91</p> <p>Performance and Market Capitalization 93</p> <p><b>Chapter 12 Fundamental Analysis Summary 95</b></p> <p>Performance Rank: One-Year Hold 95</p> <p>Performance Rank: Three-Year Hold 97</p> <p>Performance Rank: Five-Year Hold 99</p> <p><b>Chapter 13 How to Double Your Money 101</b></p> <p>How Long to Double? 101</p> <p>What Is the Best Buy Price? 102</p> <p>Which Market Caps Do Best? 103</p> <p>Focus on Fundamentals: Which Are Best? 104</p> <p>Warning: Losses Ahead. What You Need to Know 110</p> <p>Testing the Setup 112</p> <p><b>Chapter 14 Finding 10-Baggers 115</b></p> <p>How Long to 10x? 116</p> <p>What Is Highest Starting Price? 116</p> <p>What Happens the First Year? 117</p> <p>Rising Over Time: How Fast? 118</p> <p>10‐Baggers by Market Cap 119</p> <p>Fundamental Ratios Common to 10‐Baggers 119</p> <p>Industries Most Likely to Make 10‐Baggers 127</p> <p>The Most Popular Years for 10‐Baggers 128</p> <p>Surprising Finding about 10‐Bagger Losses 129</p> <p>Backward Testing 129</p> <p><b>Chapter 15 Trading 10-Baggers 133</b></p> <p>10‐Bagger Birth 133</p> <p>Life of a 10‐Bagger 139</p> <p>10‐Bagger Death 150</p> <p>Chart Patterns in 10‐Baggers 152</p> <p><b>Chapter 16 Selling Buy and Hold 161</b></p> <p>The Weinstein Setup 161</p> <p>Example: The Southwest Airlines Trade 165</p> <p>Example: Savient Pharmaceuticals 167</p> <p>1‐2‐3 Trend Change for Downtrends 168</p> <p>1‐2‐3 Trend Change for Uptrends 170</p> <p>The Cloudbank Setup 172</p> <p>Using Trailing Stops to Sell 178</p> <p>Timely Trend‐Line Exits 180</p> <p>Can Moving Averages Help? 181</p> <p>Follow Insider Transactions 183</p> <p>Selling: Two Ratio Tips 184</p> <p>Selling Down from a High 185</p> <p><b>Chapter 17 Fundamentals: What I Use 189</b></p> <p>Two Book Value Tips 190</p> <p>Do Not Get Singed by Burn Rate 190</p> <p>Drop Capital Spending! 191</p> <p>Current Ratio 2.0 191</p> <p>Prospecting for Growth Using Dividends 191</p> <p>Rising Earnings, Net Profit 192</p> <p>P/E Ratio versus Industry 192</p> <p>Litigation: Stop Pissing People Off! 193</p> <p>Avoid Too Much Long‐Term Debt 193</p> <p>Market Capitalization: Big Returns by Going Small 194</p> <p>Research Spending 194</p> <p>Sales? Think Money 195</p> <p>Price‐to‐Sales Ratio: What About Debt? 195</p> <p>Stock Price: 5 to 20 195</p> <p>Volume: Thin Ice Ahead! 196</p> <p><b>Chapter 18 Introduction to Position Trading 199</b></p> <p>What Is Position Trading? 199</p> <p>Who Should Position Trade and Why? 200</p> <p>What Position Trading Will Not Do 202</p> <p>Example Position Trade 202</p> <p><b>Chapter 19 Getting Started in Position Trading 207</b></p> <p>Check the News or Lose! 208</p> <p>Trend? What Trend? 209</p> <p>Trade with the Primary Trend 211</p> <p>Take Your Pick: Bottom Fishing or Momentum? 212</p> <p>What Is Market Influence on Stocks? 213</p> <p>What Chart Patterns Are Best for Position Trades? 214</p> <p>Busted Chart Patterns Revisited 216</p> <p>Trading Example: Finding Value in Disaster 218</p> <p><b>Chapter 20 Ten Factors Make Chart Patterns Work 223</b></p> <p>What Is a Double Bottom? 224</p> <p>Ten Factors Revealed 226</p> <p>Scoring System Checklist 232</p> <p>Scoring Performance 232</p> <p>Higher Scores Work Best 234</p> <p>Case Study: Stillwater Mining 235</p> <p>Case Study: LSB Industries 237</p> <p>Case Study: Lumber Liquidators 238</p> <p><b>Chapter 21 Three Winning Trades and a Funeral 243</b></p> <p>The Intel Fiasco 244</p> <p>Hudson Highland Hiccup 245</p> <p>CNO Financial Group 248</p> <p>Complete Production Services 250</p> <p><b>Chapter 22 What Not to Do: Three Botched Trades 255</b></p> <p>Medivation: Selling Too Late 255</p> <p>Coldwater Creek: Selling Too Soon 258</p> <p>Hovnanian: Selling at the Bottom 260</p> <p><b>Chapter 23 What We Learned 265</b></p> <p>Visual Appendix of Chart Patterns 283</p> <p>Bibliography 289</p> <p>About the Author 293</p> <p>Index 295</p>

<p>“The three books in this series were written for people unfamiliar with the inner workings of the stock market, but will still curl the toes of professionals, too. Research is used to prove the ideas discussed, but is presented in an easy to understand and light-hearted manner. You will find the books to be as entertaining as they are informative and packed with moneymaking tips and ideas. Use the ideas presented here to hone your trading style and improve your success. Whether you are a novice who has never purchased a stock but wants to, or a professional money manager who trades daily, these books are a necessary addition to any market enthusiast’s bookshelf.”<br /> —<b>Alan Battista</b>, Stockineer.com Book Review</p>

<p><b>THOMAS N. BULKOWSKI</b> is a successful investor with thirty years of experience in the stock market. He is also the author of the Wiley titles, <i>Encyclopedia of Candlestick Charts, Encyclopedia of Chart Patterns, Getting Started in Chart Patterns, Trading Classic Chart Patterns</i>, and <i>Visual Guide to Chart Patterns</i>. Bulkowski is also a contributor to <i>Active Trader, Technical Analysis of Stocks & Commodities</i>, and other publications worldwide. Before earning enough from his investments to retire from his day job at age 36, Bulkowski was a hardware design engineer with Raytheon and a senior software engineer for Tandy Corporation.</p>

<p>The series <i>Evolution of a Trader</i> explores four trading styles that people use when learning to invest in the stock market. Often, beginners enter the stock market by</p> <ol> <li><b>Buying and holding</b> on to a stock. That works well until a bear market begins. Then they try</li> <li><b>Position trading</b>. This seeks to exit positions before a significant trend change occurs.</li> <li><b>Swing trading</b> follows when traders try to catch short-term swings. Finally, people try</li> <li><b>Day trading</b> by completing their trades in a single day.</li> </ol> <p>This series takes a detailed look at each of the four styles by offering numerous tips, sharing discoveries, and discussing specific trading techniques to help the reader be successful as they journey through each style.</p> <p>The first book, <b>Trading Basics</b>, takes an in-depth look at money management, stops, support, and resistance, and offers dozens of tips every trader should know.</p> <p>The second book, <b>Fundamental Analysis and Position Trading</b>, explains value investing and tests fundamental factors, such as book value, price-to-earnings, and price-to-sales ratios, to see how important they are to stock selection and performance. Chapters such as "How to Double Your Money," "Finding 10-Baggers," and "Trading 10-Baggers" put the fundamentals to work. Position trading introduces market timing to help remove the risk of buying and holding a stock for years.</p> <p>The third book in the series, <b>Swing and Day Trading</b>, explains how to use chart patterns to swing and day trade. It reviews the basics, including the home office setup and the cost of day trading, and drills down into specific trading strategies such as the opening range breakout and the opening gap setup. It introduces new research on major reversal times and the time most likely to set the day's high and low. That is valuable information to a day trader.</p> <p>Whether you are a novice who has never purchased a stock but wants to, or a professional money manager, these books are a necessary addition to any market enthusiast's bookshelf.</p>

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