How This Book Can Boost Your Profit Performance

Can a $10,000 investment yield 51,000,000 in a year? In five years? If so, what is the risk involved?

These are the kinds of questions to which this work is addressed. Such fantastic results are possible in the stock market. Individual issues fluctuate widely enou and often enough to permit this and more. Techniques are presented here that put an average yield on invested capital of 10% per month well within the realm of possibility. Compounding profits at this rate, such a yield can return $1,000,000 on a 510,000 investment within 50 months!

An actual trading experiment will be described using these principles which produced an 8.9% yield per transaction-every 9.7 days. Such a yield, if continued, compounds SI0,000 to S1,000,000 in 15 months. If such results can be attained in the market - why isnt everyone doing itl

The answer is complex, but the elements are simple; effort, knowledge, and psychological barriers. Any goal this worthwhile requires time and effort. Most investors, amateur and professional, do not have the kind of analytical background needed to shear through rumor, opinion, and adage to get at the basis of why stock prices change. And finally, even with knowledge in hand, many investors lack training in the emotion-logic balance required for success.

Nevertheless, all of these obstacles can be overcome. It is the purpose of this book to provide you with the essentials. The results are yours if you care to apply yourself with sufficient intensity. Investment operations will be presented here in a deliberately unorthodox manner. We will turn our backs firmly on all cliches, adages, and maritet lore that will not withstand critical scrutiny. Where necessary, we will not hesitate to form new ones that do fit the facts.

The results discussed were derived using the most modern available methods of computerized data analysis and were researched for nine years before making their debut here. However, the presentation is directed to all kinds of investors. The techniques involved are simple, are not overly time-consuming, and do not presuppose extensive academic background. The work involved on your part is concerned with the need to grasp and integrate an understanding of why stock prices change with the mechanical transaction-timing techniques described.

You will find here that the big money in investing stems from the principle of "profit compounding-of short-term trades. It is further shown that this potential cannot be exploited in an optimum manner without a large improvement in transaction-timing capability, that cannot be achieved using traditional investment methods.

You will be guided through a plausible introduction to the basic tenets of price change, an understanding of which is essential to the success of your operations in the market. You will find that one particular element of the price change concept is ideally suited to the improvement of transaction timing.

You will see demonstrated dramatic new transaction methods which can result in startling potential. These are simple to apply and can be handled by anyone who will take the time to learn what they are and why they work.

You wDl be exposed to:

• A concept of profit maximization.

• A model of stock price motion with prediction implications.

• An explanation of why chart patterns form-and how to use this knowledge to your profit.

• Step-by-step methods for using the price-motion model to generate definitive "wait," "buy," "hold," "sell," "seU short," "cover short," and "protect profit" signals.

• An explanation of why moving averages work and how to design your own for use in transaction timing.

• A complete trading method: how to select issues, how to analyze them for action signals, and how to improve your chances of turning and keeping a profit.

• The extent to which you should be concerned by chance factors; whether or not you should sell in case of war or financial crisis.

• The reasons why psychological considerations can affect your profits and what you can do about it.

• An introduction to numerical analysis and spectral analysis, upon which the results in the book are based.

The problems of trading techniques and methods are dealt with directly. As a side benefit (and confined chiefly to the Appendix), enough in the way of methods, results, and references is included to permit those so inclined to repeat and carry forward the research on which the book is based.

Good luck, and large and consistent profits!

J. M. Hurst

Acknowledgments

Til is book is a strange entity-almost an afterthought. For the real effort involved was not in the writing, but in the years of experience and research that went before. As a result of those years, the book almost wrote itself, It is only natural, therefore, that the authors obligations stem mostly from "before-and are literally beyond ful-niling. l-rom the host of those that shaped background, firmed ideas, and lent moral support, a few can be singled out, however.

Wli:it value an understanding wife? How can thanks be expressed to mine for the patience and fortitude required through endless evenings and weekends when I was not there to share life, but was lost in intricate manipulations of numbers, ideas, and other intangibics of seemingly dubious work-a-day value? To Pat also go thanks for the midnight typing sessions which ultimately resulted in not only a finished manuscript but also in my graduation from the "single finger" to the "two finger" stage of expertise.

Along the way there were also several who contributed hard-wrested time from family affairs, laboriously collecting data to be later digested by computer, or slaving under ;i ilraftingHght with slide-rule in hand. Dutch Fink and Wally Dunn will recognize the cli;ir;Jcterization.

S(;nt Levine read and constructively criticized the manuscript in its most embryonic form-and still had words of encouragement to offer.

Bart, Eric, Gordon, John, and Juanita all shared the excitement, labor, and tension of the "trading experiments-while Fred Kayne and Tim Buginas never faltered in their moral (and other) support. When photo work was required, it was Doug and Slicri Edwards who came to the rescue.

was Gian Rende who endured the stress and strain of the final critical review of the niamiscript, which resulted in a number of significant and worthwhile alterations.

To each and all, heartfelt thanks!