How to make money investing in high-quality, low-risk stocks Purple Chips presents a unique stock-picking method based on identifying great companies based on simple visual examinations of financial health, applying three basic criteria to distinguish high-performing purple chip stocks from mere blue chip investments. The book also delves into the psychology of investing, arguing that most investors are better suited to winning small gains often and losing occasionally, rather than taking small losses often and winning big from time to time. In seven succinct chapters that feature plenty of helpful examples, graphs, and charts, author John Schwinghamer presents a simple and effective way to win with stocks. For more information, please visit PurpleChips.com.

How to make money investing in high-quality, low-risk stocksPurple Chips presents a unique stock-picking method based on identifying great companies based on simple visual examinations of financial health, applying three basic criteria to distinguish high-performing purple chip stocks from mere blue chip investments. The book also delves into the psychology of investing, arguing that most investors are better suited to winning small gains often and losing occasionally, rather than taking small losses often and winning big from time to time. In seven succinct chapters that feature plenty of helpful examples, graphs, and charts, author John Schwinghamer presents a simple and effective way to win with stocks. For more information, please visit PurpleChips.com.

Acknowledgments xiIntroduction 1My Background 3Chapter 1: The Psychology of Investing 7Singles and Doubles Are Better 7Tune Out the Noise 10EPS Explained 11Chapter 2: Purple Chips versus Blue Chips 17Finding the Purple Chips 18Minimum Seven Years of Positive and Growing EPS 18Smooth and Predictable Growth in EPS 19Minimum Market Capitalization of $1 Billion 23Purple Chips versus Common Blue Chips 24Dilution is a Value Killer 28Dividends, or Getting Paid While You Wait 31Purple Chips Make Money for Investors 31Keeping It Simple: The Purple Chips Model versus Ratio Analysis 35Con Edison versus Entergy 36Wendy's versus McDonald's 37General Mills versus Kraft Foods 39Google versus Yahoo! 41Chapter 3: Understanding and Seeing Valuation 43The Normal Curve: An Odds-Based Approach 43The Shifting EPS Line: A Quick Gauge of Value 45Valuation Reset 49Chapter 4: What Else You Need to Know 55Earnings Trend 55Value Traps 59Valuation Trend 62The P/E Ratio and Growth 69How to Build a Portfolio of Purple Chips 71Diversification 71Position Size 72Stop Loss Orders 73No More Anchoring 74Market Crashes 76Do It Yourself 76Chapter 5: When to Buy and Sell 79Step 1: Draw the EPS Line 79Step 2: Set the Buy and Sell Targets 82Step 3: Adjust the Buy and Sell Targets 83Buying Checklist 84Selling Checklist 84Chapter 6: Practice Case Studies 91Case Study: Abbott Labs 93Summary 106Case Study: AutoZone 108Summary 117Case Study: Johnson & Johnson 118Summary 127Case Study: General Dynamics 129Summary 136Chapter 7: Purple Chips Summarized 137Endnotes 141Index 143About the Author 149