Page 46 - How to Make Money in Stocks Trilogy

America’s Greatest Stock-Picking Secrets 19

Price 500 400 340 300 260 220 190 160 140 120 100 80 70 60 45 38 32 28 24 20 17 Volume 14,200 7,800 4,200 2,200 © 2009 Investor’s Business Daily, Inc.

Depression n Depression D begins gi b rs rs o e t d o w v % s lo t n ks Note: 5 red weeks Note: 5 red week d week k e d 5 5 with volume up with volume up u m o from prior week e Dec 1929 Sep 1929

Dow Jones Ind. Sell: exhaustion gap Sell: exhaustion gap p t t a x l l Key: A successful investor learns to do what most investor Key: A successful investor learns to do what most investor o w t n e o are not willing to do. Psychologically, most investors don’t e n o a g o use chart

Buy Buy v s c y d t a t v s e g lv m h h g i e h h successful and unsuccessful investors. s c n d Dec 1928 Sep 1928
st B b b to buy it back higher a
s u r i a r n s o a o l w s K w n a use charts, r u ’ a a e fe t u o s c Jun 1928 Mar 1928
IBM was expanding and developing new, successful products s p a in the 1920s. In 1925, it released horizontal sorting machines in the 1920s. In 1925, it released horizontal sorting machines t d 5 with a speed of 360 cards per minute and the first standard m c duplicator. In 1928, it redesigned th

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Add Add Add Buy y B 7-week base e 7 w r handle l long o dd e tk o It h Volume picks up on shakeout o p e Mar 1927 Dec 1926 Sep 1926
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Intl. Business Machines–1926 Market correction t Very important: after shakeout : i if stock comes back up through if stock comes back up through c 10-week line on even greater g n e volume you must buy it back! u m 36-week cup-with-long-handle with week cup c 36 that finally corrects for
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Price = 20*eps Weekly Chart 20 18 16 15 14 13 12 11 10 9.00 8.00 7.50 7.00 6.50 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.25 2.00 1.80 1.60 1.50 1.40 1.30 1.20 1.10 1.00 0.90 0.80