Fundamental Analysis and Position Trading: Evolution of a Trader explains and describes the test results of various fundamental factors such as book value, price-to-earnings ratio, and so on, to see how important they are to stock selection and performance.
The Fundamental Analysis Summary chapter provides tables of fundamental factors based on hold times of one, three, and five years that shows which factor is most important to use for those anticipated hold times. The tables provide a handy reference for buy-and-hold investors or for other trading styles that wish to own a core portfolio of stocks based on fundamental analysis.
Chapters such as “How to Double Your Money,” “Finding 10-Baggers,” and “Trading 10-Baggers” put the fundamentals to work. The chapter titled “Selling Buy-and-Hold” helps solve the problem of when to sell long-term holdings.
Position Trading: The second part explores position trading. It introduces market timing to help remove the risk of buying and holding a stock for years. Have you heard the phrase, Trade with the trend? How often does a stock follow the market higher or lower? The section in Chapter 19 titled, “What Is Market Influence on Stocks?” provides the answer.
This part of the book looks at how chart patterns can help with position trading. It discloses the 10 most important factors that make chart patterns work and then blends them into a scoring system. That system can help you become a more profitable position trader when using chart patterns.
Six actual trades are discussed to show how position trading works and when it does not. Consider them as roadmaps that warn when the road is bumpy and when the market police are patrolling.
- Stock Selection
- Capital Spending
- Long-Term Debt
- Price-to-Earnings Ratio
- Price-to-Sales Ratio
- Return on Shareholders’ Equity
- Shares Outstanding
- Fundamental Analysis Summary
- How to Double Your Money
- Trading 10-Baggers
- Selling Buy and Hold
- Fundamentals: What I Use
- Introduction to Position Trading
- Ten Factors Make Chart Patterns Work
- Three Winning Trades and a Funeral
- What Not to Do: Three Botched Trades