CHAPTER 5N = Newer Companies, New Products, New Management, New Highs Off Properly Formed Chart Bases

It takes something new to produce a startling advance in the price of a stock. It can be an important new product or service that sells rapidly and causes earnings to accelerate faster than previous rates of increase. Or it can be a change of management that brings new vigor, new ideas, or at least a new broom to sweep everything clean. New industry conditions—such as supply shortages, price increases, or the introduction of revolutionary technologies—can also have a positive effect on most stocks in an industry group.

In our study of the greatest stock market winners, which now spans the period from 1880 through 2008, we discovered that more ...

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