Summary & Discussion of My Trading History of Circus Circus Enterprises (CIR) in 1999 Based on the Triangle Pattern

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New World Technologies, Inc.
www.nwtai.com

Michael Fouche
mfouche@nwtai.com

Table of Contents

Introduction. 3

CIR Trading Executive Summary. 4

Discussion, Charts, & Results. 5

Original Return on Investment. 6

Alternative Return on Investment. 8

Conclusions. 9

Appendix – Transaction Receipts. 10

 

 

 

 

 

 

 

 

 


 

Introduction

 

In 1989 I was introduced to Ted Warren’s book, “How to Make the Stock Market make Money for You” (originally published in 1966) – his claim was that one could discern specific patterns in stock histories to predict future performance (this is also called “Technical Analysis”).

In order to validate his claims, I studied many stock charts from the local library in 1990 – interestingly I found that the same type of patterns that Warren had used as examples from the 1950s and 1960s, were also present in the stocks that I’d studied from the 1970s and 1980s. 

Thus the next step was to begin investing - which is where the “rubber meets the road” so to speak, using the techniques that he had described in this book. 


During the early, mid, and late 1990s, I was successful for the most part, in selecting and investing in good stocks based on specific patterns – my primary downfall was in not being patient enough to wait for the stock to meet its full potential.

This document discusses the details of one of thirty documented stock investments which were made based on the patterns discerned from that particular historical stock profile.


 

CIR Trading Executive Summary


The following is a synopsis for this stock investment. 

Return on Investment (ROI)

117.3% in 6 months

 

 

Potential ROI if I’d been patient

Up to 514.1% in 66 months

 

 

Reason for Purchase

Classic triangle pattern

 

 

Time Frame When Purchased

1999

 

The next two sections include more details on the reasons for the trade, the trading history, and the maximum potential ROI. 

Copies of the original stock transaction receipts, for each of the trades (buy and sell), are included in the appendix at the end of this document.

 


 

Discussion, Charts, & Results

 

CIR had the classical triangle pattern, as shown in below in Figure 1. 

 

 

Figure 1 -  Observed Pattern, and Buy / Sell History

 

 

 

 

 


 

Original Return on Investment

 

In this case I got in at the bottom – well after it had broken through (downwards) the lower support line.  Given that it was 50% below the lower support line, I believed it to be a solid point to jump in – 6 months later I exited with a 117% ROI as shown below in Figure 2.

 

 

Figure 2 – Observed Pattern, and Buy / Sell History



 

 

 

 

 

 

The transaction summary is shown below in Figure 3.  Note that this does not account for transaction costs.

 

 

Figure 3 – Transaction Summary

 

 

 


 

Alternative Return on Investment

 

The company was renamed “Mandalay Bay Resorts” in 1999.  In June 2004, the company was acquired for $71 per share - https://en.wikipedia.org/wiki/Mandalay_Resort_Group.

I don’t have historical chart of the stock price profiles up until the company was acquired – however the known data point is that it was sold for $71 per share in 2004.  Thus if I’d held the stock for 66 months (approximately 5 ½ years), the ROI would have been 514%.  The assumption is that the stock could have been sold at a lower ROI sometime before that time frame as well.  Thus 100% and 200% ROI values were possible sometime in the next few years.

A projected transaction summary of the “maximum projected ROI” of 514.1% (assuming that I’d sold out at the maximum ROI percentage) is shown below in Figure 4.  Note that this does not account for transaction costs.

 

 

 

Figure 4 – Transaction Summary

 

 

 

 

 

 


 

Conclusions

 

This stock had a classic triangle pattern and paid off handsomely.  While the 117% ROI in 6 months was phenomenal, the payoff could have been much higher had I been more patient.

 

 

 


 

Appendix – Transaction Receipts

The records of the purchase and sell transactions are shown below.

 

Stock Purchase Receipt

 

 

Stock Sell Receipt