The MAGNET method of investing : find, trade, and profit from exceptional stocks

305 Pages·2009·16.33 MB·English

by  Kimmel

—CONTINUED FROM FRONT FLAP— Praise for KIMMEL AN $60.00 USA / $72.00 CAN
ALMANAC
Drawing on the results of his own research over the past
The MAGNET® Method of Investing
twenty-fi ve years as well as his relationships with other INVESTOR
top money managers of this era, Kimmel shows you how T
h BOOK “Future top-performing stocks are like needles in a
The MAGNET® Stock Selection Process can put you in e
“ Rather than encouraging the scatter shot approach of broad diversifi cation, Jordan focuses on the M haystack. Find them by turning your portfolio into a
a better position to enhance the overall performance of
your equity portfolio. rifl e-shot MAGNET® method of identifying a limited number of quality stocks to improve your MAGNET magnet for pulling in these hidden gems.
chances of beating the market.” A ®® Th e name of the game is isolating these future
Method
The important lessons to be learned from The MAGNET® — Sam Stovall, Chief Investment Strategist, Standard & Poor’s Equity Research G The runaways, focusing your eff orts on really getting to
Stock Selection Process could not be made available
N know and understand them, and then concentrating
at a more opportune time. Survival and future success
“ Jordan Kimmel is one of the brightest market observers out there, and he is certainly a rising star your capital on these hidden values at the right time.”
will rely on following a sound investment discipline E
with strong fundamental, valuation, and technical that will be an important person to follow marketwise for many years.” —From the Foreword by Jeffrey A. Hirsch
T
underpinnings. During the current economic downturn —Michael Burke, Coeditor, Investors Intelligence, Inc. INVESTING
and beyond, The MAGNET® Method of Investing is the M® of Early on in his career, market strategist Jordan Kimmel
perfect guide to seeking out, identifying, and profi ting realized that an overemphasis on diversifi cation, asset
“ Jordan Kimmel’s Th e MAGNET® Method of Investing is an amazing, detailed, and intuitive book. I e
from the few truly superlative stocks. t allocation, and the use of modern portfolio theory
especially enjoyed Jordan’s insights into diversifi cation, the ineffi cient market, and identifying stocks
h yielded unacceptably mediocre returns and limited the
that are in their ‘sweet spot.’ Jordan’s writing style is also very straightforward and refreshing. He o
creation of wealth in a portfolio. With this in mind, he set
d
JORDAN KIMMEL has been the Portfolio Manager succeeds in taking complicated subjects and explaining them in an insightful way. Th is is simply an o out to fi nd a better way to invest and ended up creating
incredible book that is a must-read for both beginning and serious investors.” f The MAGNET® Stock Selection Process. Now, with

and President of MAGNET Investment Group since 1997. I
— Louis G. Navellier, Chairman and founder, Navellier & Associates, Inc. N The MAGNET® Method of Investing, Kimmel shares his
He graduated from Bronx High School of Science and
V FFIINNDD insights into this effective approach with you.
holds a BA in economics and an MS in urban policy E ,,,,,
sciences. Kimmel appears regularly on CNBC, ABC, “Th e MAGNET® Method of Investing examines investing from a diff erent perspective than many S
The MAGNET® Stock Selection Process uses conven-
and Fox News, and hosts his own radio show, Magnet investors often see, off ering a unique alternative to diversifi cation. Jordan Kimmel has analyzed the T TTRR AA DDEE,,,,,,,,
I tional technical and fundamental factors within a theo-
Investing with Jordan Kimmel, on the VoiceAmerica methods of the best investors through time and introduces his robust stock selection process.” N
retically sound framework—and follows a clear set of
Business Network. As a frequently requested speaker, G PPRROOFFIITT
— David M. Darst, CFA, Managing Director and Chief Investment Strategist, AAAAAAAAAAAAANNNNNNNNNDDDDDDDDDD practical rules—to select a limited number of stocks
Kimmel is known as a straight shooter unafraid to expose
Morgan Stanley Global Wealth Management Group
expected to outperform broad market averages such
Wall Street’s shortcomings. FF FF
“ We welcome Jordan’s book as a valuable perspective on investing. Th e Wall Street Transcript applauds ROMROM ININ FFFFFFFFRRRRRRRRROOOOOOOOMMMMMMMM astsr attheeg yS c&hPa ll5e0n0g easn tdh eR puospseullla r2ly0 0h0e ldin bdeelxieefs o. fW phaisles ivtheilsy
JEFFREY A. HIRSCH is Editor in Chief of the Stock DD EE XXCCEEPPTTIIOONN AA LL
money managers like Jordan who explain their philosophies clearly, support them with research, and EE ,, holding a large number of diversifi ed securities, its ability
Trader’s Almanac and Almanac Investor newsletter.
XXTT to identify superlative stocks during the early stages of a
He started with the Hirsch Organization in 1990 as a back them up with performance data. Th is is a great addition to any investing reading list.” CCRR
SSTTOOCCKKSS company’s greatest growth phase has allowed investors
market analyst and historian under the mentorship of —Andrew Pickup, Publisher and CEO, The Wall Street Transcript EEAA
PPDD to capture profi ts for over two decades.
his father, Yale Hirsch. He regularly appears on major TTEE
news networks such as CNBC, CNN, Fox News, “Th e MAGNET® Method of Investing takes on the important issue of diversifi cation, which has been IOIO, , AA Throughout these pages, Kimmel skillfully discusses
and Bloomberg, and is widely quoted in many major oversold to Main Street. Th is is yet another example of the need to ‘go against conventional thinking’ NN NDND his proven strategy—from conception to application—
newspapers and fi nancial publications. Hirsch also AA
if you want to achieve superior results.” PP and outlines the entire process of focusing on fewer
writes numerous fi nancial columns. —Stan Weinstein, Editor and Publisher, Global Trend Alert LLSS RORO stocks to gain greater returns in straightforward and
accessible terms:
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KK J O R D A N K I M M E L Acceleration of earnings, revenues, and margins
SS Growth must exceed current valuation
New product or management may be the driver
Emerging industry or product creates great opportunity
Timing needs to be right
JEFFREY A. HIRSCH
FOREWORD BY , Editor in Chief, Stock Trader’s Almanac
HedgeMetrics
WITH AN INTRODUCTION & BACKTEST BY
—CONTINUED ON BACK FLAP—
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More Praise for
The Magnet Method of Investing
“Investors have long been sold diversification as the Holy
Grail. Jordan Kimmel pushes investors to see a different
light. He knows the big money is often made in just a few
moves. Investors should embrace his big-picture wisdom.”
— Michael W. Covel
Author, Trend Following and The Complete TurtleTrader
“Whether you are a novice or an experienced investor, you
owe it to yourself to absorb how the MAGNET method takes
a unique look into the brightest minds on Wall Street—
and highlights why they ignore the call to widely diversify.”
— Doug Trenary
Author, The SuccessMind
“If you are simply seeking average returns, do not bother
with The MAGNET Method of Investing—invest in a low
cost index fund. However, if you want to learn the secret
to generating exceptional returns, this book is a must-read.
Inside, Jordan Kimmel reveals his MAGNET method for
finding the truly exceptional stocks in the stock market.”
— Nicholas Maturo
CEO, Global Investor Services, Inc.
“A clear and entertaining manual on how to profit from
sensible risk-taking in the market without blowing up.”
— Aaron Brown
Author, The Poker Face of Wall Street, and
Risk Manager, AQR Capital Management
(formerly of Morgan Stanley)
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The MAGNET®
Method of Investing
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The Hirsch Organization was founded by Yale Hirsch, creator of
the Stock Trader’s Almanac (providing historical information to
investors since 1967). His son, Jeffrey A. Hirsch, is the current
president of the Hirsch Organization and has worked with Yale for
over 20 years. Jeffrey also edits the Hirsch Organization’s monthly
Almanac Newsletter and is a consulting editor on the
Almanac Investor series.
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The MAGNET®
Method of Investing
FIND, TRADE, AND PROFIT
FROM EXCEPTIONAL STOCKS
JORDAN KIMMEL
Foreword by Jeffrey A. Hirsch,
Editor-in-Chief, Stock Trader’s Almanac
John Wiley & Sons, Inc.
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Copyright © 2009 by Jordan Kimmel. All rights reserved.
Foreword copyright © 2009 by Jeffrey A. Hirsch. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, scanning, or otherwise, except as permitted under Section 107 or 108 of
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have
used their best efforts in preparing this book, they make no representations
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or fitness for a particular purpose. No warranty may be created or extended
by sales representatives or written sales materials. The advice and strategies
contained herein may not be suitable for your situation. You should consult with
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The Magnet® Stock Selection Process is a registered trademark of Jordan Kimmel.
Library of Congress Cataloging-in-Publication Data:
Kimmel, Jordan
The magnet method of investing : find, trade, and profit from exceptional stocks /
Jordan Kimmel ; foreword by Jeffrey A. Hirsch.
p. cm. — (Almanac investor series)
Includes bibliographical references and index.
ISBN 978-0-470-27929-8 (cloth)
1. Investment analysis. 2. Portfolio management. 3. Stocks. I. Title.
HG4529.K5633 2009
332.63’22—dc22
2009008847
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
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To all those investors who desire above-average
returns and who are willing to go the extra
mile to generate them.
To my wife and boys, who have been so patient
with me while I took time away from them
while I worked on this book.
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