Mark Crisp’s $6 Million System

I recently came across an article on Mark Crisp’s system by which he purportedly made $6 million.

His method is to find a stock that you believe will increase its price by 10x over the next few years.

1. Fundamental
   • Look for killer products, e.g. Crocs., try out the products yourself
   • Check that the company have new products that it can ramp out in the future.
   • Estimate the growth rate of earnings from this year to the next, based on historical trend and latest results.
   • Calculate the forward P/E ratio (using the estimated earnings growth rate to get the expected EPS) to see that it is reasonable.
   • Assume a PEG of 0.5, get the future P/E ratio, multiply that with the expected EPS  to get the future stock price.
   • The future expected stock price should be many times today’s stock price.
2. Timing
   • Use a slow stochastic, 14 days, with 3 day moving average.
   • Wait for a pullback of 20-30%, then wait to see the slow stochastic show < 20% and move upwards before you make the purchase.
3. Method of buying
   • Put all your capital into the company, don’t diversify.
   • After the price doubles, max up by buying more on margin.
   • After the price doubles again, max up with more margin again.

This looks like a high-risk strategy with no stop-loss. If you survive, yes, you can make a lot of money. If you don’t survive, well…