Newsletter-12-23-10
Tradingourway
Volume 3, Issue 17 Dec 23, 2010		 Tradingourway Logo

I want to wish all of you a Happy Holiday   and hope that your trading/Investing next year will be very successful.
I decided to extend the reduced price offer to the new year as we have had quite a few new members sign up lately.

 Many times we have wanted, just one training course that taught you all needed to know to become successful at trading the markets. "The Complete Trading Process" Seminar CD does exactly that. Most stock trading educational CD's only cover  one small portion of the total process and then require you to purchase multiple products,
we hold nothing back, no come-ons, nothing to buy later, you get it all up front for one low price.

The Seminar CD contains 28 videos, over 1,100 minutes, a directory with some of great trading tools, 3 trading strategies. Plus email support at support@tradingourway.com should  you have questions.  You owe it to yourself to at least watch the Intro Video which is 17 minutes. Just watching the video you can pick up several key points about the trading process. If you like what you saw and heard click the "Buy Now button" below to purchase the Seminar CD at the reduced price of only $97.  

Finding Top Performers in order to plan next Quarter investments
Is it Time to Jump Back into the Market? - Our local newspaper had an article in the business section  on this question on Dec 16th, 2010. While the article did not make any startling revelations I thought it was practical information that was worth repeating. These are comments from the Legendary Vanguard Group founder Jack Bogle about overconfident investors making four mistakes in this market for 2011. Below is the reprint of the article.
Chasing past performance
It seems obvious, but markets can change direction in a hurry. And too many investors ignore what Bogle calls the "reversion to the mean" the pervasive law of gravity that prevails in the financial markets." Eventually, a bull market turns bearish, or the reverse. Or stocks of small companies perform better than large company stocks for a couple years, only to switch positions the next two years. Yet, it's easier to put more money into a fund when stocks are rising in value and sell when they're falling. "Investments are better than investors," he says.
Underestimating costs

Are your returns really going to differ much if you pick a fund charging 0.9 percent instead of 0.2 percent? They will if you're in it for the long haul, he says, because they drag on returns year in and year out. He points to a wealth of independent studies underscoring the importance of expenses to returns. Sooner or later, every fund manager has a bad streak, or is replaced, and any performance edge the fund had is eroded by the higher fees it's likely to charge compared with an index fund.
Getting careless about risk

Recent gains led to overconfidence that the market will keep rising, he says. He's not predicting a crash, he expects stocks will return around 7 to 8 percent next year. But he isn't expecting the double digit gains some are forecasting. He figures the stock market must eventually reflect the eco­nomic risks from running a record federal deficit. He also worries that China's real estate boom will go bust, which could ripple throughout the global economy. "Don't get carried away, and don't have too much in stocks," he says.
Focusing on the now

You need a long-term strategy that reflects your tolerance for risk. If you can't stand to see your portfolio fall each time the market hiccups, add investments with steadier returns. And don't panic during volatility, Those who do have a plan are often inclined to shelve it when stocks hit a volatile patch, and investors move en masse in or out of stocks. Remember, stocks revert to their mean. 'The old rule used to be 'Don't just stand there, do something.' But for an investor," he says, "often the best rule is 'Don't do something, just stand there,"

All we really have to go by is the past performance

I, truly, believe that past performance is the best indicator of how a given stock will perform in the future. However, it is certainly no guarantee as there are so many things that affect stock prices. Most of them have to do directly with the individual stock and how its company is performing. But there many factors that affect a sector or the entire market. That is why even savvy investors have to stay on top of their position. The days of buy and forget are long gone.

I got the following question from Debra who had recently purchase my Seminar CD which is what prompted this particular newsletter.  

Hopefully, we can all benefit from Debra's asking

Good Morning Kermit,

I hope this day finds you well.  I had another question that doesn’t appear in your Seminar and it has to do with Worden and finding top Industry groups.  You mention that Worden has a way to do this, but I can’t seem to find it.  Could you explain further please?

This is my answer to Debra:

The simplest way is to bring up the Morningstar industry groups Watchlist and do a custom sort on whatever time period you are looking to cover.

Or you can build PCFs to cover a time period, such as Sept 1, 2010 to Nov 29, 2010

This PCF calculates the percentage change from the low of 9/1/10 to the high of 11/29/10

((H'11/29/10' - L'09/01/10') / L'09/01/10') * 100

Or if you want the percentage change over the last 90 days

((MAXH90 - MINL90) / MINL90) * 100

Watch this video http://forums.worden.com/default.aspx?g=posts&t=51 and this one http://forums.worden.com/Default.aspx?g=posts&t=263

You can find hundreds of videos here http://forums.worden.com/Default.aspx?g=topics&f=2

By the way, you do not have to be a Worden Brothers subscriber to watch these videos. That is true for most of the training videos put out by Worden Brothers. I think it is a great way of find out if you want to use the product.

In the first video, Craig refers to “Media General” in the video. It is now known as Morningstar since Morningstar bought out Media General a few years back. Otherwise everything else in the video is the same. The image below shows the Morningstar industry groups that performed the best over the 1st QTR the last 2 years.


Morningstar Performance


 I have for the last several years had in my Worden Brothers’ Telechart software watchlist tab columns showing how a stock, index or in the case above Industry groups. performs by quarter. I believe the watchlist tabs and customizing the columns is one of the least used but great features of Worden Brothers Telechart.

 Most folks don’t realize you can also install Telechart on multiple machines and set each one for a different style of trading or investing. The only drawback is you can’t have multiple platnium Telechart’s running at the same time. 

 I have one of my Telechart machines setup with 2 Watchlist tabs to show the price change by quarter for 2002 thru 2010. This allows me at a glance to see how a stock, ETF or Index has done over the last 8 years in each Quarter. One of the side benefits of this setup is I can tell immediately if a stock has less than 8 year of trading history and in what which quarter of the first year it was listed. I know right away if it is a newly issue stock and should be avoided until it has some price history. 

 For those of you that have Telechart you might consider doing something of this nature. It isn’t that difficult. You need to create a PCF for the time period you are interested in, such as the first quarter of 2010 PCF I use. I used Closing Price but you can use open, high or low which ever interest you the most. This PCF provides you the percentage of price change from Jan 1, 2010 to March 31, 2010. To create PCFs for other time periods just change the dates.

  ((C'03/31/10' - C'01/01/10') / C'01/01/10') * 100

 
 

The next newsletter, which will be next year, will be the final report on the Dividend stocks I have discussed in the last several newsletters.  I have finish putting together a  Trading Strategy on how to best invest and trade these stocks. Sorry, it has taken me so long but I wanted to get it right.

Those who have purchased my Seminar CD prior to the 2011 will receive the Trading Strategy for free. For others it will be available for $29 as a PDF in January 2011.
 

As always, I want to hear your thoughts on the newsletter, trading tips and any subjects. Please feel free to send an email with your suggestions, complaints or comments to kermitp@tradingourway.com
I have listed some useful products below that I feel are beneficial to any trader. Please take the time to learn about them and see if they can help you in your trading and investing goals.

Thank you for taking the time to read Trading Our Way newsletters and good trading to all,
Kermit Prather
Worden Brothers Telechart and StockFinder Software
 
 Worden Brothers' now produces 3 products. Each product in itself is a really good software package. Together they make for a great set of stock market analysis software. Checkout Telechart StockFinder Freestockcharts
I will share some of my work with anyone who purchases the StockFinder or Telechart product via links on this newsletter. If you let me know purchased either or both and I will glad to provide you assistance with the products and share some of my layouts. Just send me an email at Kermitp@tradingourway.com and provide me your Worden Brothers' user name. If you want to talk one on one about the products or any other subject include your phone number and a best time to talk.
Check it out on the order and Pricing page or you can compare the products on the features page