The Magnet Method of Investing demystifies modern portfolio theory, efficient market theory, asset allocation, and diversification, and it details what characteristics the best stocks have in common before they produce their oversized returns for investors. In the following pages Jordan Kimmel dissects his process from conception to birth to wealth creation and capital acceleration.
Introduction:
Throughout history investors have searched for new ways to achieve investment success. Lasting success has rarely been found by following the crowd or the latest investment fad. In fact, doing so has usually ended with disastrous consequences: the Tulip mania of 1637, the South Sea Bubble of 1720, the Internet bubble of 2000, and, most recently, the real estate bust and credit markets crash. It is reasonable to conclude that simply following the latest fad can lead to failure and has the potential for signifi cant losses.
Investment success can be achieved only through the judicious application of a well grounded discipline built on a solid founda-tion of fundamental principals and understanding of market behavior. The Magnet Stock Selection System (MSSS) is such a discipline. Jordan Kimmel, inventor of The Magnet Stock Selection Process, has transcended being an avid student of investment principles to a leading proponent of the art and science of investing. His knowledge and keen insight into the investment process have been gained in the trenches and on the front lines in the battle for investment survival and success.
The Magnet Stock Selection Process has evolved from those experiences. It uses conventional technical and fundamental factors within a theoretically sound framework and a clear set of practical rules to select a limited number of stocks expected to outperform broad market averages such as the Standard and Poor ’s(S&P) 500 and Russell 2000 indexes. The system ’ s underlying theory states that stocks are likely to outperform the general market if they have large and rapidly grow-ing sales, are reasonably priced according to metrics (such as their price – to – earnings multiples and earnings growth), have above average relative strength, and are undervalued. The strategy underlying the model states that investors consistently underestimate the expected returns of stocks with strong fun-damentals, technical patterns, and risk and growth characteristics.
Contents:
- The Road from Broadway to Wall Street
The Paradox: Diversification or Superlatives - The Bell Curve: Stock Market Superlatives
- The Inefficient Market: Reallocate into Superlatives
- Nature’s S-Curve: Buying Stock Sweet Spots
- Reevaluating Risk: Volatility Is Not Risk
- The Search for Superlatives
- The InterBoomer Generation
- Implications of Market Interference
- Free Earnings: A New Metric
- The Magnet System: Putting It All Together
- Selected Articles and Interviews