Andy Dunn was nice enough to send me a copy of his new book, Great Companies, Great Charts, to review. In the book Andy explains the trading system he developed after his portfolio took a beating during the recent bear market. His system, which has some similarities to CANSLIM, is very simple — buy great (fundamentally sound) companies with great (technically sound) charts.
Andy uses online stock screening tools to find his potential investments. He walks the user through the process of setting up their the screens at various sites. One of the things I always like to see in books about the market is a discussion of money management, and this book does not disappoint in that area. A good portion of the book focuses on trade entry and exit techniques, position sizing and risk management.
Andy’s system is yet another example of how simple investing can be. I have to admit that initially I was taken aback at small size of the book. But after reading it I realized that it didn’t need to be lengthy — the system is just that simple. I won’t say that I agree with every aspect of Andy’s system, because there are a couple of things that I would tweak. But that’s the whole point of investing — you have to do what makes you comfortable. And Andy even says in the book the book that whether or not you agree with his methodology the important thing is to have a well thought out plan and follow it. Anyone thinking about creating an investing program should take a look at this book.
I would go into more detail about the book but I don’t think that’s necessary because Andy has posted portions of it on his weblog and/or you can browse it at iUniverse.. Enjoy.
