The Profit Magic of Stock Transaction Timing

by J.M. Hurst

Can a $10,000 investment yield $1,000,000 in a year? In five years? If so, what is the risk involved?

These are the kinds of questions to which this work is addressed. Such fantastic results are possible in the stock market. Individual issues fluctuate widely enough and often enough to permit this and more. Techniques are presented here that put an average yield on invested capital of 10% per month, well within the realm of possibility. Compounding profits at this rate, such a yield can return $1,000,000 on a $10,000 investment within 50 months.

An actual trading experiment will be described using these principles which produced an 8.9% yield per transaction--every 9.7 days. Such a yield, if continued, compounds $10,000 to $1,000,000 in 15 months. If such results can be attained in the market -- why isn't everyone doing it?

The answer is complex, but the elements are simple: effort, knowledge and psychological barriers. Any goal this worthwhile requires time and effort. Most investors, amateur and professional do not have the kind of analytical background needed to shear through rumor, opinion, and adage to get at the basis of why stock prices change. And finally, even with knowledge in hand, many investors lack training in the emotion-logic balance required for success.

Nevertheless, all of these obstacles can be overcome. It is the purpose of this book to provide you with the essentials. The results are yours if you care to apply yourself with sufficient intensity. Investment operations will be presented here in a deliberately unorthodox manner. We will turn our backs firmly on all cliches, adages, and market lore that will not withstand critical scrutiny. Where necessary, we will not hesitate to form new ones that do fit the facts.

You will find here that the big money in investing stems from the principle of "profit compounding:---of short-term trades. It is further shown that this potential cannot be exploited in an optimum manner without a large improvement in transaction-timing capability that cannot be achieved using tradional investment methods.

You will be exposed to: a concept of profit maximization; a model of stock price motion with prediction implications; an explanation of why chart patterns form---and how to use this knowledge to your profit; step-by-step methods for using the price-motion model to generate definite "wait," "buy," "hold," "sell," "sell short," "cover short," and "protect profit" signals; an explanation of why moving averages work and how to design your own for use in transaction timing; a complete trading method: how to select issues, how to analyze them for action signals, and how to improve your chances of turning and keeping a profit; the extent to which you should be concerned by chance factors, whether or not you should sell in case of war or financial crisis; the reasons why psychological considerations can affect your profits and what you can do about it; an introduction to numerical analysis and spectral analysis, upon which the results on the book are based.

The problems of trading techniques and methods are dealt with directly. Enough methods and references are included to permit further research if desired.

Genres: Finance

223 pages, Paperback

First published January 1, 1970

Reviews

[Matheus Sevaroli · Rating 4 out of 5]

These highlights reflect the passages that stood out to me personally, capturing moments that resonated, challenged, or intrigued me.

"Rules to Maximize Your Profits

However, achieving 100% profit is not guaranteed. The following are elements of a profit-optimizing investment philosophy:

Trading (as opposed to investing)
Maximization of percent per year yield on each trade
Maximization of percent of time invested
Minimization of the trading interval
Optimization of transaction time
Fast and simple issue selection
Fast and simple transaction-timing analysis
Accurate and timely stock price tracking

The purpose of the remainder of this book is to combine these elements into a practical method of extracting the profit magic from stock transaction timing!

Foreseeable fundamental events influencing investor thinking regarding industry groups and specific issues account for 75% of the price motion of stocks. 23% of all price motion is oscillatory in nature and semi-predictable!"

[Greg · Rating 4 out of 5]

This was not an easy book to read, and it's got a silly title, and reading the description it sounds like it should be a 'get-rich-quick' type of book. But I saw it referenced a few times and there is a part of me that is curious to read what I think might be marketing crap over real work. This probably falls into the real work even though I'm not sure if just following what is in this book is really going to be able to time the market as well as Hurst claims that it will. I read this one twice trying to figure some of it out, but I'm not sure if there really is a lot to take away from the details, but the overall idea of cycles that he presents makes much more sense to me than something like Elliot Wave Theory.

[Arvind Balasubramaniam · Rating 4 out of 5]

This is an intense book. I had shelved it 8 months back and now I find myself coming back to it and learning more. It's not an easy read, but I find his viewpoints on cyclicality to be a useful tool in my arsenal. I have not yet completed it and I will likely re-read this a few more times.