|  NOV 1990

Stage Analysis by Thom Hartle

Stage Analysis by Thom Hartle Funds are invested in markets for various reasons. A high return on investment capital, of course, is the ultimate goal. Investment decisions, however, often are made with only limited amounts of careful thinking behind the decision to place capital at risk. The competitive nature of any market dictates that success over the long run will be directly correlated with the amount of effort advanced. The process of carefully thought-out investment begins with a thorough understanding of the market in question and a range of information sources. The typical first step is using the research reports and recommendations that brokerage houses generate. Subscribing to newsletters that have daily and weekly telephone trading ideas is usually the next step. Finally, to understand balance sheets, earnings, cash flows and valuation techniques, reading books on the subject come last. After all is said and done, a nagging question remains about the timing of the investment decisions. Purchasing software that collects price data is the next step in achieving better performance. This display of data requires interpretation much the way reading a map requires interpretation. The quest to understand this map is the study of technical analysis.

by Thom Hartle