The old traditional way to do it is to set the model firmly on a solid, flat surface (being careful to set it absolutely upright and with the intended waterline parallel to the surface), mount a pencil on a block of wood in such a way that the pencil point is at the precise height of the waterline, and scribe carefully around the hull. It's sometimes easier (assuming you're doing this job early enough in the proceedings) to mount the hull upside down.
A modern tool that can come in handy for this job is a laser level. Such a tool projects an absolutely straight, horizontal, bright red line at any surface in front of it. Just set the laser at the right height, turn it on, and mark along the line with a pencil. I bought my laser level from Sears four or five years ago for about $35.00; I imagine similar tools can be had for less money now. It comes in handy for lots of other stuff: aligning masts, hanging pictures in the living room, etc., etc.
Youth, talent, hard work, and enthusiasm are no match for old age and treachery.