Page 774 - How to Make Money in Stocks Trilogy

64 HOW TO MAKE MONEY IN STOCKS SUCCESS STORIES

The company had double digit earnings and sales growth as well as an
innovative product, the Keurig Brewer, which makes individual cups of
gourmet coffee. Dave bought the stock as it broke out of a classic cup-with-
handle base pattern in March 2009, just as a new bull market was beginning.
“This was a very easy position to hold,” he says. “Six weeks later, I was
rewarded with a huge payoff. Along with a great earnings report, the com-
pany announced that their K-Cups would be available in Walmart prior to
Mother’s Day. The stock rocketed 37% on the announcement. Volume was
832% above average, showing enormous buying from professional investors.
“I hadn’t faced a huge gap-up move when I already had an established
position in a stock for a long time. I remember Charles Harris (portfolio
manager for O’Neil Data Systems and instructor for IBD workshops)
explaining in a seminar that one needs to hit the accelerator when you find
a great stock.” Dave says he likes to refer to it as “lighting the cans,” which
is fighter pilot terminology for igniting the afterburners. “So, due to the
incredible gains made from the Walmart announcement to sell Green
Mountain Coffee Roasters K-Cup products, I placed a market order to buy
25% more shares of the stock. By 11:30 p.m. that night, floating around on
an aircraft carrier with a significant lag in the Internet, I realized that I had
placed one of my best trades ever. Green Mountain Coffee Roasters closed
that day 44% higher than the previous day.”
Dave sat with Green Mountain till mid July, eventually closing out a gain
of 78%. “I decided to exit the position due to a breach of the 10-week mov-
ing average,” he says. “The stock recovered and went higher without me,
but I was fine with locking in my gains.”

• KEY POINTS •

• Tune out the news; pay attention to what the market and
leading stocks are actually doing.
• Look for stocks setting up in a base while the market is in a
correction.

Take Most Profits at 20 to 25%
Lee Tanner said he had a moment of clarity that significantly improved his
trading after attending IBD’s Level 4 workshop. The portfolio simulation