Entry Point
Chapter 3: Beautiful Upsides - Price Upsides Are Winners

Four price upside examples show why the upside is so profitable.

Ten-Year Upside Produces 93 Percent Winners

Danaher (DHR), a large conglomerate that manufactures and markets industrial and consumer products, is on a long-term price upside.

From January 2, 1997 through February 12, 2007 DHR has completed 3,219,453 daily close buy and sell combinations of which 92.30 percent made money. Both short-term traders and buy-and-hold investors have made lots of money with this stock.

Six-Year Upside Produces 93 Percent Winners

A prolonged upside produces a very high percentage of profitable investments as seen with Caremark Rx (CMX), a pharmaceutical services provider For the 1,500,778 buy and sell combinations from May 13, 2000 through February 9, 2007, 1,399,719 (93.27 percent) made money. Even purchases at local highs were profitable, if they were held long enough.

The unprofitable investments occurred for investments bought at local highs and then sold within a few days, weeks or months.

Steep Upside Results In 96 Percent Winners

Hansen Natural (HANS), a maker of natural beverages, provided investors with many profitable entry points on its price upside that lasted from January 2, 2004 through May 10, 2006. For the 200,028 upside buy and sell combinations, 192,672 (96.32 percent) made money.

Homes Prices Are On a Long-term Upside

The median sale price of new homes sold in the United States is on a long-term price upside. From June 1963 through December 2006 home prices have increased from $17,200 to $235,000. Note: Price data are from the U.S. Census Bureau.

As the upside proceeded, sale prices fluctuated month to month but they exhibited extended declines in only three periods (red lines on chart): June 1969 through October 1970, May 1990 through May 1992 and May 2006 through December 2006.

For the entire 528 month period, 136,497 (98.11 percent) of 139,128 possible monthly buy and sell combinations made money. For the same period, the S&P 500, a measure of the broad United States stock market, produced 128,938 (92.68 percent) profitable monthly buy and sell combinations.

Cover Contents Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6

Posted February 22, 2007.

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