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When Investing,
Think in Terms of Probabilities

We bought Switzerland's EMS-Chemie (EMS-Z) at SF5100 on January, 21, 1997. It dipped to 5030 and then took off. How did we know it was time to buy? At 5100, EMS-Z completed a "basing" pattern (technically called a Head & Shoulders Bottom). That put the odds heavily in our favour! Just the way we like it!

When investing, don't think in terms of absolutes, think in terms of probabilities. We want to do everything possible to "load the deck" to our advantage. Charts are the pros' secret weapon for doing exactly that. Charts allow us to minimize risk. While we do pay attention to fundamentals, (e.g., industry group, sales, earnings/share, return on equity, profit margins, geopolitics. etc.), they can't tell us when is the best time to "pull the trigger," nor when to take profits or cut losses. If you don't use charts, you're just guessing.

In our July '98 issue, we raised our profit-protecting stop-loss to 8200. The stop-loss was reached on August 28th. We took our profits and looked elsewhere for better opportunities.

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