Tables for the Chapter on Big Gainners

Table 1: Performance Summary.

No.	Avg. Return	Avg. Annualized	Avg. Holding Period
21	50%	111%	211 days

Table 2: Source of the stocks:

Sources	Web & publication	Deeply valued	Acquire candidates	Misc. screens	Short squeezed
No.	4	3	3	10	1
Annualized Return	75%	53%	204%	115%	164%
Stocks	ADM,BSX, C, EMN	CSCO, CSCO, MSFT	CAMP, FFCH, ADES	ACAT,BIIB,CUZ,DGI,NSIT,STRZA,USNA,OMX,DLTR	DECK

Web and Publication.

There are four (from a total of 21) stocks are selected from my articles off the web, magazines and newspaper. When I was convinced that there was great appreciation, I bought that stock without any further evaluation. I was lazy and you should do some evaluation. Need to distinguish whether the authors are pumping-and-dumping the stocks they recommended.

Deeply-valued stocks.

Three of the stocks were quite deeply valued. I placed an order with prices about 5% lower than the market prices betting they are still on its way down a little. Three out of six orders were successfully executed. 

I doubled my normal bet on most of these stocks (CSCO about 4 times) and the stocks with high fundamental metrics. As of 5/2013, these deeply-valued stocks have not realized its potential values and they’re the under-performers in the group. However, the average 53% annualized return is nothing to ignore!

Candidates to be acquired.

There are quite a few candidates that would be acquired by other (usually larger) companies in the early recovery of the market cycle (a phase defined by me). However, with plenty of easy money around due to low interest rates and the high corporate cash reserves, it extends the acquisition craze to 2013. This phase will end when the Fed begins to tighten the money supply. These stocks represent the better return from the group and I should have doubled bet on all of them even they normally are smaller and unknown companies.

The potential candidates to be acquired are usually smaller companies with a technological edge and/or a good customer base.

Miscellaneous screens.

A screen consists of criteria in searching stocks such as P/E < 20. There are 10 stocks from miscellaneous screens (same as searches). The performance of each screen is further analyzed.  It is better to use the screens that had better performances most recently.

Short squeeze.

The short squeeze happens when the stocks that have been over-sold by the shorters (Chapter 56: Fundamental Metrics and Chapter 62: Selling Short). When the stock is over-sold, those seeking a short position cannot find the extra shares lent to be shorted and sometimes the shorters are forced to cover their shorts due to the high expenses of shorting that stock (interests and dividends).

If the company is not heading towards bankruptcy, any good news would boost the stock price. This is the typical situation, but it does not work all of the time. TSLA was a recent example as of 5/2013 that works for short squeeze. However, I bet TSLA will fall again from its unjustified high price of over $100 per share. Only time can tell.

Increase stocks for better appreciation potential

The confidence in my predictions for CSCO's future is so secure that I have set aside four times my typical investment, and then 2x for BSX and STRZA. All scored high in my scoring system described in my other book Scoring Stocks. I would never set aside more money for potential laggards!

Table 3: Score (using the score system in my book Scoring Stocks:

Avg. Score	Foreign Country	Insider Purchase
3.00	0	1

The average score of 9 stocks is 3 and it is the passing grade. Some of the stocks have not been analyzed and hence have not been scored as described before. The stocks that have not been scored usually have good appreciation potential, deeply-valued for first impression, and / or recommended by convincing articles. The scoring system is a guide line and we do not have to follow it religiously. The scoring system is based on my book Scoring Stocks (from amazon.com).

There is not a single foreign stock in this group. I usually do not trust the financial statements of the smaller, foreign countries. The next chapter will tell you to skip most of them.

Insider Purchase (Chapter 56) is only 1 out of 21. The data base is too small for any conclusion. From my past data, Insiders’ Purchases with purchase prices close to the market prices is a good predicator.

Table 4: Sectors:

Sector	Tech	Mine	Health Care, equip and drug	Consumer goods	Finance	Retail	Misc.
No.	6	0	4	3	3	2	3
Annual	77%		230%	102%	60%	57%	78%
Stocks	CAMP, CSCO,CSCO, DGI,MSFT,NSIT		BIIB,BSX, USNA,ADES	ACAT,ADM DECK	C,FFCH, BANR	OMX, DLTR	CUZ,STRZA EMN