O'Reilly logo

Fundamental Analysis and Position Trading: Evolution of a Trader by Thomas N. Bulkowski

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 1

Introduction to Buy-and-Hold

I started dabbling in the markets by researching companies using their annual reports. I pored over the numbers and checked the ratios to make sure the company would not fold anytime soon.

In those days, I learned to love cash dividends and stock dividends as well. They added to the bulge in my wallet and slowly increased my net worth one share at a time. During the bull market of the 1980s, I had a win/loss ratio of 63 percent and made an average of 39 percent per trade. I achieved that without knowing what I was doing.

For example, I bought a stock called Sparton Corp. This was a wonderful stock that never heard of going up while I owned it, but it paid a huge dividend. That is, until they stopped paying it! I bought it three times and lost 23 percent, 39 percent, and 53 percent of my money.

I grew to mistrust the method of holding a stock forever (well, 3.6 years was my average hold time for stocks bought in the 1980s). I was tired of seeing a stock like ASA Holdings (acquired by Delta), which I bought four times in the late 1990s at an average price of 23.36, more than double to 51 and then drop to 34 before I sold it.

Nevertheless, I still like investing, which is a synonym for buy-and-hold. You can make a lot of money with little work. The hardest part is ignoring the daily rollercoaster movements of the market.

As I mentioned in Trading Basics, Chapter 2, under “Hold Time: My Trades,” my best hold time is between three and four years. ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required