📖William Gann
Catalyst-Aware Stock Picking
Identify specific catalysts that will unlock value.
Look for investments where a specific catalyst will unlock value. Without a catalyst, even cheap stocks can remain undervalued indefinitely.
🏠 Everyday Analogy
📖 Core Interpretation
In Catalyst-Aware Stock Picking, W.D. Gann focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Catalysts transform undervaluation into realized gains.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Crash of 1983—87 Bull Market Reversal (1987)
An investor rides the strong 1980s bull market, but unlike peers, applies Gann’s rules: pyramids cautiously, sets stops, and watches time and price cycles.
✨ Outcome：Capital mostly preserved in October 1987 crash; limited drawdowns and quick recovery enabled by disciplined exits.
2
Pre-Crash Distribution Pattern (1929)
Gann observes repeated geometric and cyclical signals of exhaustion in leading industrials before the 1929 crash, aligning with his natural law timing cycles and price angles.
✨ Outcome：Reduces long exposure and initiates short positions, profiting significantly as the market collapses into 1932.
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