Beat the Market : Invest by Knowing What Stocks to Buy and What Stocks to Sell

by Kirkpatrick, Charles D., II

• ISBN13: 9780132439787
• ISBN10: 0132439786
• Edition: 1st
• Format: Hardcover
• Copyright: 2008-08-25
• Publisher: Ft Pr

Summary

Over the past 25 years, Charles D. Kirkpatrick's exclusive stock-picking technique based on the relative strength of prices and has outperformed the S+P 500's performance by a whopping 7.7x. That's right: if you'd invested $10,000 in the S+P 500, you'd have $130,000 now . . . but if you'd followed Kirkpatrick's published picks, you'd have $1,000,000! If that's not amazing enough, Kirkpatrick's system is remarkably easy to use and in this book, he'll teach you everything you need to know to put it to work in your portfolio. Kirkpatrick reveals why an active strategy based on relative stock rankings is the surest route to profit, and how just a few pieces of publicly available information lets you create rankings that virtually guarantee exceptional performance. You'll learn how to use his techniques to organize stocks into a portfolio that maximizes returns while reducing risk . . . uncover trigger points that tell you when to buy and sell . . . systematically protect yourself against bad stocks and bad markets. This is the first book in the new FT Press Beat The Market series: brief books for the individual investor that are focused on strategies and techniques proven to significantly outperform the market indexes over a substantial period of time.

Author Biography

Charles D. Kirkpatrick II, CMT is currently president of Kirkpatrick & Company, Inc., Kittery, Maine. This is a privatecorporation specializing in technical research that publishes the Kirkpatrick Market Strategist advisory newsletter.

 

In the recent past, Mr. Kirkpatrick has been a director of the Market Technicians Association–an association of professional analysts—and served on its Dow Award Committee, Education Committee, and as chairman of the Academic Liaison Committee. He was editor of the Journal of Technical Analysis—the official journal of technical analysis research—and an instructor in finance at the Fort Lewis College School of Business Administration in Durango, Colorado–one of only seven colleges (as opposed to universities) in the U.S. accredited by the Association to Advance Collegiate Schools of Business (AACSB). In 2007, with coauthor, Professor Julie Dahlquist, he published a textbook on technical analysis: Technical Analysis — The Complete Resource for Financial Market Technicians –now used in university finance classes and the Market Technicians Association’s professional education programs.

 

In addition, Mr. Kirkpatrick has received awards from his peers. In 1993 and 2001 he received the Charles H. Dow Award for excellence in technical researchand in 2008, he received the Market Technicians Association Annual Award–an award given once a year to someone for “Outstanding Contributions to the Field of Technical Analysis.” He is a graduate of Phillips Exeter Academy, Harvard College, and the Wharton School of the University of Pennsylvania, and served as a decorated combat officer in the First Cavalry Division in Vietnam. He currently resides on an island in Maine with his wife, Ellie, and various domestic animals.

Table of Contents

Introduction	p. 1
Investing Today	p. 3
Investment Management	p. 4
Investment Management Incentive	p. 5
What Do You Do?	p. 15
Summary	p. 18
Beliefs and Biases	p. 19
The Markets	p. 20
My Emotional Experience	p. 22
Summary	p. 25
Investment Risk	p. 27
Individual Stock Risk	p. 27
Randomness	p. 29
Diversification	p. 30
Law of Percentages	p. 31
Drawdown	p. 31
Market Risk	p. 33
Summary	p. 37
Conventional Analysis	p. 39
Fundamental Versus Technical Methods	p. 39
Summary	p. 46
Prediction Versus Reaction	p. 47
Economists	p. 47
Gurus and "Experts"	p. 49
Mutual Funds	p. 50
Security Analysts	p. 50
Reaction Technique	p. 53
Summary	p. 55
Meeting the Relatives	p. 57
Value	p. 58
Growth	p. 61
Price Strength	p. 63
The Evidence	p. 67
Summary	p. 68
Value Selection	p. 69
Performance Three Months Ahead	p. 73
Performance Six Months Ahead	p. 74
Performance Twelve Months Ahead	p. 77
Advancing and Declining Background Market	p. 78
Relative Price-to-Sales Percentile During a Declining Market After Three Months	p. 81
Summary	p. 83
Relative Reported EarningsGrowth Selection	p. 85
Summary	p. 93
Relative Price Strength Selection	p. 95
Relative Strength Calculations	p. 95
Summary	p. 105
Putting It Together	p. 109
Growth Model	p. 109
Value Model	p. 113
Summary of Growth and Value List Triggers	p. 116
New Model (Called the "Bargain List")	p. 118
Summary	p. 122
Selecting and Deleting Stocks	p. 125
Buying	p. 125
Selling	p. 127
Sources of Relative Information	p. 130
Other Concerns	p. 131
How to Act	p. 132
Summary	p. 135
Creating a Portfolio of Stocks	p. 137
Maximum Drawdown	p. 138
Simple but Practical Methods of Creating a Portfolio	p. 138
Summary	p. 146
Conclusion	p. 147
Investment Procedure Example	p. 149
Finding Data, Calculating Data, and Locating Sources	p. 149
The Hypothetical Value Model Portfolio	p. 150
Performance of Value Model	p. 152
Adding and Deleting Stocks	p. 154
References	p. 157
Index	p. 159
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Praise for Invest by Knowing What Stocks to Buy and What Stocks to Sell Praise for Invest by Knowing What Stocks to Buy and What Stocks to Sell"This is one of the best new investing books of the decade: succinct, practical, and timeless. Built on a foundation of 40 years of market wisdom, it combines technical analysis and portfolio construction that is supported by excellent research. It should be required reading for everyone from new investors to the most sophisticated hedge fund managers." --Linda Raschke, President, LBRGroup, Inc."The author is an award winning Technical Analyst. In this book, he covers the basic principles, definitions, safeguards, pitfalls, and risks of investing. Believing in active management, he recognizes the benefits of multiple tools (fundamental and technical) and disciplines there-on, to construct a portfolio methodology with guidelines for both buying and selling, for maximum gain. This is a valuable book for any serious investor." --Louise Yamada, Managing Director, Louise Yamada Technical Research Advisors, LLC."In this book, Charles Kirkpatrick demonstrates just how powerful a tool relative strength is, deftly combining technical and fundamental analysis to produce a superior long-term approach. This isn't just theory, but the real-time work of a practitioner with an outstanding track record. For many years a small group of knowledgeable investors has known about this work, now you can too." --John Bollinger, CFA, CMT, President, Bollinger Capital Management"The author presents a clearly written, time-tested formula for investor independence and success through applying relative price strength for stock selection and portfolio construction." --Hank Pruden, Golden Gate University Copyright Pearson Education. All rights reserved.