Greetings, fellow Pro-fundity team members -
12-22-00 Page Background music:

A. This weeks picks (remember the basis of our stock picks: a) sound fundamentals, b) supportive technicals, c) possible near-term buy, and d) positive news):

• (ABFS) [Transportation] Arkansas Best
• (ARXX) [Aerospace/defense] Aeroflex Inc
• (BPFH) [Banking] Boston Private Fincl Hld
• (CHIC) [Retail/apparel] Charlotte Rusee Hldg Inc
• (DCOM) [Banking] Dime Community Bancshare
• (FLEX) [Electronics] Flextronics Internat Ltd
• (LIN) [Retail/home furnishings] Linens'n Things Inc
• (MINI) [Manufacturing/metal fab] Mobile Mini Inc
• (ROAD) [Transportation/trucking] Roadway Express Inc
• (TIER) [Computer Software & Services] Tier Technologies Inc

B. Quick Picks

We have added five low-cost price charts for subscriber interest. These have good technicals and have passed the news scan, but the subscribers must do their own fundamentals research.

C. 100 Optionable Possible’s

The link on the home page to 100 OPTIONABLE POSSIBLES provides a list of tickers with interesting price patterns, all optionable between $5.00 and $15.00, that merit your consideration. Any fundamental, technical or news screens are left to the subscriber.

D. This Week's Guidepost

A Year’s End Review and Fireside Chat

1. As this week’s offering (12/22/00) was coming together, I reflected on the three years we’ve been putting up the Pro-fundity Page and marveled at our success and all the lessons learned during that time. Every week, for over 150 weeks, a dedicated staff has done the research and study to provide a value-added product for our subscribers. The subscribers, who make this possible, have given us all the drive and focus each week to “do it again!” We appreciate your feedback, positive and negative, and encourage your continued participation to make the Pro-fundity Page even better going forward.

2. We began this effort strictly as a “Rolling Stocks” offering, seeking tickers with rolling patterns where we could select buy and sell points with GTC (good til cancelled) orders with our brokers. That meant we would capitalize on the volatility of the market, where it abides in abundance, with pre-determined orders to our broker. What could be easier? All we had to do was sit on the porch and watch the money roll in. After months of struggling with rollers that didn’t, with tickers that shot up without us or down with us, I tried to find a better way. Many of our picks became 10 baggers and all we could do was watch  . Take a look at the following chart of one of our picks offered on 6/18/99. On that Friday, the closing price was $13.00 after a couple of good rolls between about $13.00 and $16.00. Buying at $13.00 on that Friday placed us in a good position to sell at the $16.00 a few days later. The problem; the price rose to over $28.00 while we watched.

   

3. Here’s another example, a pick offered on 9/24/99 with the price on that Friday at $11.25. The volley of purchases during July began another rolling pattern we tried to capitalize on. The pattern seemed to turn up a few days later as expected and looked like a good rolling pick.

   

4. The next chart shows where the price pattern went, pretty flat until the end of October.

   

5. Sure, we were able to sell at our predetermined price of $13.00 making a buck and a half profit. But look what we sacrificed, with the price rising over $132! That bothers me a lot. The greatest minds on Wall Street unanimously chorus the phrase, “Let your profits run!” We were selling with the price going up! The other part to the Wall Street phrase is to “Cut your losses short.” By setting a buy price on “support” side of the rolling channel, we buy with the price going down. Helloooo! The next chart illustrates the issue.

   

6. We offered this pick on 10/8/99 at the bottom of the roll with the price at $6.00. This looked like a good buy point. Had we bought the stock on that date, the next chart shows the folly of buying just because the price reaches some predetermined buy point.

   

7. Owning shares of this ticker at $6.00 destines us to a long wait hoping the price will get back up to at least a breakeven point. Or, we could sell for a loss at some other loss-cut point. But all is not as bleak as it seems. We did make money on rolling stocks, as the following ticker offered 9/24/99 demonstrates.

   

8. The point of this dialog is to demonstrate common difficulties in making money with rolling stocks, using the conventional “Resistance/Support” philosophy. I believe the root of the problem lies in the simplicity of the Rolling Stocks strategy. It is very attractive because it is so easy to understand. But the Devil, they say, is in the details. From the outset of our Pro-fundity offering we have stressed the importance of market fundamentals, a feature you won’t find on any other rolling stock offering. That is part of our frustration. All of our picks have undergone extensive fundamentals research. Our picks all have good fundamentals. That is why they are likely to go up, to move out of the rolling channel. We believe a stock is more likely to increase in price if the company has demonstrated growth in earnings and sound financial management.

9. So where does that leave us? As we prepared this weeks offering I thought it was time to look at the Page from the viewpoint of a subscriber and relate how its many features can help tilt the table in our favor. I shall continue from this point as a subscriber who uses the Page as a dynamic tool to further his financial goals. Stay tuned for a continued fireside chat on this most important issue and how we have countered each problem discussed in this guidepost.

All the staff here at Pro-fundity wish you and yours the greatest happiness available, glowing from the season upon us.

It is our intent to help our subscribers understand market strategies well enough to make informed decisions and understand the risks.

TC-2000 tutorials are available on the home page.

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