How Proper Timing Brings Big Profits

August 21, 2008

Taking a Profit Ladder Approach

But the Holly story doesn't end there. Only when I saw a new and better buying opportunity did I decide to replace Holly on my Emerging Growth Buy List. A stock has to be highly ranked according to my stringent Quantitative Rankings and it has to pass our test of eight critical Fundamental Variables. In other words, it's pretty hard to make it on to our Buy List. When we choose our investments it's almost like Army Ranger School for stocks. Actually, it's even harder because only one in every 300 stocks makes to out Buy List.

So what stock was good enough to replace Holly? It was Graham Corp. (GHM), which is a New York-based company that makes vacuum and heat transfer equipment. Not the most exciting business, but in the past 12 months since I added Graham to out Buy List, the stock is up 249% for us! Sales and earnings are growing as a breakneck pace and the shares are still very reasonably priced. A few weeks ago, the company reported earnings that beat Wall Street's forecast by over 40%, and I expect this growth to continue through the second half of 2008.

And Holly? It's now down -54% from when we sold it. As I said, it's all about timing.
Taken together, my subscribers have made over 1,800% in less than four years in our pair of investments in Holly and Graham. Now that's climbing the profit ladder!