Page 1262 - How to Make Money in Stocks Trilogy

244 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

Here’s the nice thing about printing out Stock Checkup: It does most of
the work for you! Just print it out, and you have a permanent snapshot of
what was happening at the time you bought the stock.
You’ll find pass, neutral or fail ratings for:
• Market direction: Uptrend or correction?
• Your stock’s fundamental performance (earnings and sales growth, return
on equity, etc.)
• Your stock’s technical performance (fund ownership, Relative Strength
Rating, etc.)

It takes all of about 2 seconds and makes doing a post-analysis much easier.
Here are some other things you want to note. I add them as “comments”
on the chart PDFs I create, but you could also just grab a pen and write
them down on your printouts.

• Basic info
■ Date of purchase, number of shares purchased, cost per share.
• Base and buy point
■ Note the type of base (e.g., cup-with-handle) or other buy point (e.g.,
pullback to 10-week moving average line), and draw it on the chart.
• Any yellow flags?
■ Examples: Lower than ideal sales growth, a slightly weak industry
group ranking, etc.
• Primary reasons for buying
■ Examples: Breakout from cup-with-handle on heavy volume; new
innovative product; emerging industry trends, etc.
• Target sell prices
■ Offensive: Typically 20%–25% above ideal buy point

■ Defensive: Typically 7%–8% below your purchase price