kh,
You'll know when you've made enough cuts when all the sharpie is gone,it may take a few cuts but just keep marking the com with your sharpie until the markings are all gone in one single pass,actually I use a dry erase marker but a sharpie pen works just as well.One notch on your lathe should equal 1/1000's.Go here and it will explain and show you in detail about cutting your com.
http://www.motortuningsecrets.com/