Summary
Phil Anderson outlines his personal stock selection strategy, derived from page 67 of Gann’s Truth of the Stock Tape (1923), centred on identifying breakouts and riding strong trends. He illustrates the approach with a live trade example on ASX-listed MAD (a mining services company), and emphasises that disciplined stop-loss execution is the hardest but most critical element of the strategy.
Key Claims
- The core breakout strategy comes directly from page 67 of Gann’s Truth of the Stock Tape (1923) — confidence: high
- The strategy works fastest and most effectively in bull market years; bearish years like 2022 require modification — confidence: high
- The strategy applies better to US markets than Australian markets due to Australia’s dividend imputation tax system, which forces companies to distribute most earnings and suppresses price momentum — confidence: high
- Gann identified specific methods to anticipate when a strong trend is likely to end; Anderson claims this signal is in TTST and is largely unrecognised by modern analysts — confidence: medium
- At the moment of a breakout, the chart pattern on a computer-driven platform will not look like the textbook ideal; traders must recognise it in real time — confidence: high
- Taking the stop loss when a trade fails to continue is described as the single hardest discipline Anderson has had to learn — confidence: high
- RCA (Radio Corp) is cited as a historical example: broke out at 400 by 1929 — confidence: high
Mex Pete References
None.
Stock Picks / Signals
- ASX: MAD (mining services — drilling and digging sector)
- Signal: Breakout buy, identified in 2021
- Stop loss: Yes — explicitly stated; exit taken if trend does not continue
- Price target: None specified
- Additional context: Referenced as a live/actual trade; also mentioned in Gann emails #7 and #8
Predictions / Forecasts
None explicitly made. Anderson notes more pattern-hunting emails are forthcoming.
Notable Quotes
“The most important thing that makes this work for me is that I take the stop when the trade doesn’t continue. And truth be told, that’s the hardest thing I have ever learnt to do.”
“Gann identified ways to see when a strong trend might likely stop… It’s so simple it defies belief. And I’m not aware of anyone in the world that has picked this up – and yes, it’s in TTST.”