Page 800 - How to Make Money in Stocks Trilogy

80 HOW TO MAKE MONEY IN STOCKS SUCCESS STORIES

This led to massive earnings acceleration and grabbed the attention of
institutional investors, who bought shares of Nutrisystem, sending its stock
price soaring.
In 2009, Townsend traded in and out of another stock, Baidu, which is the
Google of China, netting gains of 40%, 15%, and 20%. Townsend said that
reviewing his past trades gives him a chance to look at how he might have
handled a stock differently. “Every trader makes mistakes,” says Townsend,
“but the most important thing I learned from my experience with Baidu was
that I did not exercise the patience needed to pull out the 1,000% gain that
the stock made. A CAN SLIM trader could have made those enormous
gains with Baidu if one bought at the beginning of the new bull market in
March 2009 and held onto the stock as it made its tenfold move. My plan is
to find the super stocks of the future and capture the truly big moves that
these stocks make, using the CAN SLIM strategy.
“If an investor embraces keeping losses small, lets winners run, and fol-
lows clear investing rules, then one can’t help but be successful. Yet invest-
ing success takes hard work, understanding market psychology, and a
willingness to study the overall market trend, but that’s the easy part after
one makes the commitment.”

• KEY POINTS •

• Congratulate yourself on profitable trades.
• Review how you could have realized larger gains.

Treating Investing Like a Business

K. Basu was a “late bloomer to the dot.com rage” while he was in college.
But he eventually started dabbling in the market and bought a stock that ran
up 100% in a very short period of time. So he did what many young men
would do: he took the profits and bought himself a car.
But when the tech bubble burst, he lost a lot of money in his account. At
the time, he owned WorldCom, which eventually went bankrupt. He was
very green and new to investing, so he didn’t have sell rules in place when
the stock began to collapse.