Preface xi
Acknowledgments-How This Book Came to Pass xv
The Anatomy of a Super Stock
Get Rich with the "Glitch" 3
Analyzing Super Stocks-In Search of "The Perfect Glitch"
What Makes the Glitch Twitch? 17
Tough Times Separate the Men from the Boys: A Warning First
They'll Bitch at the Glitch
"Success Has a Thousand Fathers, but Failure Is a Bastard."
Some Companies Make It-Some Don't
Valuation Analysis
Conventional Approaches to Stock Valuation-The Riddle: Ten Times Earning's Is too High and a Thousand Times Is Too Low 31
The Problem: If Left Field and Right Field Don't Work, Get Out of the Stadium
Earnings-Based Methods: The "Underpriced, Low P/E" School
The Growth Stock School of Thought
The Ben Graham Approach-"Remarkable but Not Enough."
The Solution
Pricing Is Everything-Use Price Sales Ratios 39
Bulls, Bears, and Turkeys
Understanding Price Sales Ratios (PSRs)
What Does the Relationship between Price and Sales Mean? A Case in Point: The Datapoint
A Super Stock Is a Super Company Bought at a Low PSR Relative to the Company's Size
What Is a Low PSR, What Is a High PSR, and Why? Studying the Solution
Getting the Right Slant on Stocks
Swimming Upstream as You Grow
A Fear of Heights
The Threshold of Never-Never Land
The Economics of Going Public
Price Research Ratios-The Cost of a Good Set of Brains 61
The Problem-Landing a Whale
What is the Price Research Ratio? Research Is Just aCommodity
Market Research Wags Technical Research: The Solution
Rules for Using PRRs
Problems with PRRs
Applying Price Sales Ratios to Nonsuper Stocks 75
PSRs, the Broader Concept
Lessons of the Past-PSRs in the Bull Market of the 1960s and Early 1970s
PSRs and the Great American Smokestack Stock
Use PSRs as THE Stock Market Timing Device
Fisher's Rules for Timing the Stock Market
PSRs in the "Garbage Dump" of the Stock Market
Fortunes from Failures-The Myth of the 1930s 95
Through the Time Warp
IBM Not a Growth Stock? Spectacular Profits with Low-PSR Stocks
What about All Those Great Companies?
Fundamental Analysis
Super Companies: The Business Aspects-Stalking Excellence 109
Basic Business Traits
Growth Orientation
Marketing Excellence: Quanta-Ray: "Underpromise; Overperform"-Customers Are the Best Salesmen
Is Management in Control of Marketing? How Are Sales and Service Handled? Find the Unfair Advantage: Does the Customer Get the "Best Bang for the Buck"? Labor Relations Are Critical
Financial Controls-Question the Answers
Avoid Risk-Avoid Competition 127
David and the Anteaters
Avoid the Places Anteaters Hang Out
The Japanese Zap Large Markets-Sometimes
Small (and Different) Is Beautiful
Remember Your Teddy Roosevelt-Walk Softly but Carry a Strong Balance Sheet
Who Stands behind the Financials? Who Has Controlling Interest?
Margin Analysis-All I Really Want in Life Is an Unfair Advantage 135
The Problem
Some Definitions
Look for Clues from the Past: Who Kicked the Sleeping Dog? When in Doubt, Ask! From Rags to Riches
Something Rather Unique Must Be Done
All I Really Want in Life Is an Unfair Advantage: High Market Share Can Be an Unfair Advantage
Relative Market Share Is More Powerful Still
Margin Analysis Continued-Formulas and Rules 149
A Forecasting Formula for Margin Analysis: Some Examples
Rules for Margin Analysis
No One Is Perfect-You Don't Have to Be
Dynamics
Into Action-There's Method to the Madness 159
Where Is the Magic Key? Opportunities Are Seldom Labeled: Scan for Low PSRs
Scan for Money-Losing Companies
Scan for Qualitative Assessments of Superior Companies
The Best Research Facilities Cost Nothing to Use
Take an Important Side Step in Time
The Key to Esoteric and Little-Known Publications
Avoid Competition from Wall Street
Visit the Company: Getting Your Foot in the Door
Contact Customers, Competitors, Suppliers, and Investment Professionals
It's Time to Reach a Conclusion
Bringing It All Back Home-When to Sell 179
When Is the Bloom off the Rose? Beware of Heights: There Is Nothing Like a Good Long Ride
After You've Sold, You've Reached the End of the Line
Verbatim Corporation-Disco Baby 183
Early History: The President Is Gone
A Competitor by Comparison
The Stock and the PSR: Taking the Plunge
The Competitive Nappers Wake Up
Smiling All the Way to the Bank
California Microwave-Ride the Wave 209
Early History
This Company Was Worth Further Investigation
Oops! The Other Shoe Drops
Taking the Plunge
Riding the Wave
New Blood
Everybody Loves a Happy Ending
Appendixes
Appendix 1 235
Appendix 2 239
Appendix 3 241
Appendix 4 245
Appendix 5 249
Appendix 6 253
Index 263