THOMAS N. BULKOWSKI is a successful investor with thirty years of experience in the stock market. He is also the author of the Wiley titles, Encyclopedia of Candlestick Charts, Encyclopedia of Chart Patterns, Getting Started in Chart Patterns, Trading Classic Chart Patterns, and Visual Guide to Chart Patterns. Bulkowski is also a contributor to Active Trader, Technical Analysis of Stocks & Commodities, and other publications worldwide. Before earning enough from his investments to retire from his day job at age 36, Bulkowski was a hardware design engineer with Raytheon and a senior software engineer for Tandy Corporation.

“The three books in this series were written for people unfamiliar with the inner workings of the stock market, but will still curl the toes of professionals, too. Research is used to prove the ideas discussed, but is presented in an easy to understand and light-hearted manner. You will find the books to be as entertaining as they are informative and packed with moneymaking tips and ideas. Use the ideas presented here to hone your trading style and improve your success. Whether you are a novice who has never purchased a stock but wants to, or a professional money manager who trades daily, these books are a necessary addition to any market enthusiast’s bookshelf.”—Alan Battista, Stockineer.com Book Review

• Preface xiAcknowledgments xviiChapter 1 introduction to Buy and Hold 1What Is Buy and Hold? 2Who Should Buy and Hold? 2My Numbers: Background and Terms 3Now What? 3Chapter 2 Stock Selection 5What Comes After Large Price Moves? 6Myth: Stocks That Drop Least in a Bear Market Then Soar 7Stock Selection the Easy Way 8Two Tips for Stock Selection 9Buy Fallen Angels 10What Chart Patterns Appear Before Mergers and Buyouts? 10What Are Insiders Doing? 13Chapter 3 Book Value 17Book Value Defined 18Value Assets Properly 18Investing Using Book Value 19When Is Book Value Important? 19The Value of Hidden Assets 20Limits of Book Value 21Buybacks Lower Book Value 22Historical Research 22Price to Book Value: A Good Measure 24Small Caps: Best Choice 25Low Stock Price Rules! 27Book Value and Return on Equity 28What Is the Best Price to Book Value? 29Combinations and Performance 30Trading Strategy: Beating the Dow 31The Eight-Stock Setup 32Hold Time for Best Results 34Chapter 4 Capital Spending 37Is Decreasing Capital Spending the Holy Grail? 37Capital Spending Trends versus Performance 38Frequency Distribution 39Performance by Market Cap 40Chapter 5 Cash Flow 43Historical Research Review 44Cooking the Books 45The Numbers 46Is Increasing Cash Flow Good? 46Performance by Market Cap 48Chapter 6 Dividends 51Stock Dividends: An Explanation 52Historical Research Review 52High Yield, High Performance? 53Testing: Yield and Payout Ratio 54Which Is Best: Dividends or No Dividends? 55Surprise: Dividend Cuts Work! 55When Disaster Strikes 57Performance by Market Cap 58Chapter 7 Long-Term Debt 61The Numbers 61Is Debt Good? 62Sinking Ship: Taking on Debt 62Debt by Market Capitalization 63Chapter 8 Price-to-Earnings Ratio 67History Lesson 67Do Low P/E Stocks Outperform? 68P/E Trends Down: Good or Bad? 69Price and Earnings Combinations: Yawn 69Buy Small Caps with Low P/E 70High P/E: Time to Sell? 71Three P/E Tips 71Chapter 9 Price-to-Sales Ratio 73Good Benchmark: PSRs Below 1.0 74PSR Trend: Down Is Best 75Small Caps, Small PSRs Rule! 75Checklist: PSRs by Industry 77Chapter 10 Return on Shareholders’ Equity 81Low ROE Stocks Outperform: Why? 82ROE Trend Over Time: Yawn 83ROE Performance by Market Capitalization 83Chapter 11 Shares Outstanding 85Performance versus Shares Outstanding 85Event Pattern: Dutch Auction Tender Offers 87Should You Sell? 87Sell at What Price? 90Event Pattern: Common Stock Offerings 91Performance and Market Capitalization 93Chapter 12 Fundamental Analysis Summary 95Performance Rank: One-Year Hold 95Performance Rank: Three-Year Hold 97Performance Rank: Five-Year Hold 99Chapter 13 How to Double Your Money 101How Long to Double? 101What Is the Best Buy Price? 102Which Market Caps Do Best? 103Focus on Fundamentals: Which Are Best? 104Warning: Losses Ahead. What You Need to Know 110Testing the Setup 112Chapter 14 Finding 10-Baggers 115How Long to 10x? 116What Is Highest Starting Price? 116What Happens the First Year? 117Rising Over Time: How Fast? 11810‐Baggers by Market Cap 119Fundamental Ratios Common to 10‐Baggers 119Industries Most Likely to Make 10‐Baggers 127The Most Popular Years for 10‐Baggers 128Surprising Finding about 10‐Bagger Losses 129Backward Testing 129Chapter 15 Trading 10-Baggers 13310‐Bagger Birth 133Life of a 10‐Bagger 13910‐Bagger Death 150Chart Patterns in 10‐Baggers 152Chapter 16 Selling Buy and Hold 161The Weinstein Setup 161Example: The Southwest Airlines Trade 165Example: Savient Pharmaceuticals 1671‐2‐3 Trend Change for Downtrends 1681‐2‐3 Trend Change for Uptrends 170The Cloudbank Setup 172Using Trailing Stops to Sell 178Timely Trend‐Line Exits 180Can Moving Averages Help? 181Follow Insider Transactions 183Selling: Two Ratio Tips 184Selling Down from a High 185Chapter 17 Fundamentals: What I Use 189Two Book Value Tips 190Do Not Get Singed by Burn Rate 190Drop Capital Spending! 191Current Ratio 2.0 191Prospecting for Growth Using Dividends 191Rising Earnings, Net Profit 192P/E Ratio versus Industry 192Litigation: Stop Pissing People Off! 193Avoid Too Much Long‐Term Debt 193Market Capitalization: Big Returns by Going Small 194Research Spending 194Sales? Think Money 195Price‐to‐Sales Ratio: What About Debt? 195Stock Price: 5 to 20 195Volume: Thin Ice Ahead! 196Chapter 18 Introduction to Position Trading 199What Is Position Trading? 199Who Should Position Trade and Why? 200What Position Trading Will Not Do 202Example Position Trade 202Chapter 19 Getting Started in Position Trading 207Check the News or Lose! 208Trend? What Trend? 209Trade with the Primary Trend 211Take Your Pick: Bottom Fishing or Momentum? 212What Is Market Influence on Stocks? 213What Chart Patterns Are Best for Position Trades? 214Busted Chart Patterns Revisited 216Trading Example: Finding Value in Disaster 218Chapter 20 Ten Factors Make Chart Patterns Work 223What Is a Double Bottom? 224Ten Factors Revealed 226Scoring System Checklist 232Scoring Performance 232Higher Scores Work Best 234Case Study: Stillwater Mining 235Case Study: LSB Industries 237Case Study: Lumber Liquidators 238Chapter 21 Three Winning Trades and a Funeral 243The Intel Fiasco 244Hudson Highland Hiccup 245CNO Financial Group 248Complete Production Services 250Chapter 22 What Not to Do: Three Botched Trades 255Medivation: Selling Too Late 255Coldwater Creek: Selling Too Soon 258Hovnanian: Selling at the Bottom 260Chapter 23 What We Learned 265Visual Appendix of Chart Patterns 283Bibliography 289About the Author 293Index 295