Most Important Concepts:

• Sell after a 20%-30% gain unless the stock rises rapidly (within a month), in which case hold longer and reassess after 8 weeks.
• Diversification is for those unwilling to focus on thoroughly researching their investments. Concentrated, informed bets yield higher returns.
• Investing, not speculation, is the goal. Day trading involves minor fluctuations and lacks the long-term growth potential of well-timed investments.

Action Points for Me:

Chapter Recap:

1 - America’s greatest stock-picking secrets

• Cup with handle shape. Buy when there is a long sideways movement, and the stock breaks the previous high.

2 - How to read charts like a pro

• Always check the chart before buying.
• Price patterns repeat themselves because human nature doesn’t change.
• You want a stock to prove it’s strength to you before you invest. Not buy at it’s absolute lowest point, as it might still fail.
• Look for volume dry-ups near the lows of a price pattern.
• Volume is your best measure of supply and demand and institutional actions.
• Reliable base patterns should have a minimum of 7 to 8 weeks of price consolidation.

Cup with handle chart:

Double bottom chart:

3 - C = Current big or accelerating quarterly earnings and sales per share