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HISTORICAL GL's
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BASICS FUNDAMENTALS TECHNICALS ROLLING TC-2000 OPTIONS |
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Greetings, fellow Pro-fundity team members.
Guidepost for 01/16/04
YEAR-END REVIEW!
- Time to take stock, folks. How did our stock picks do during 2003? “Did we beat the market?” In this review lets look first at “watch-lists” for picks made on the first Friday in the 2003, one year ago.
Fig. 1 Pick performance, chosen 357 days ago. - During 2003 the S&P 500 returned over 20%, not a bad year (the S&P is the traditional index for market performance). Had we invested in all 20 picks that first week in January and just held on, we would have nearly tripled the S&P return! But look at the last pick in the list, EXAS. Negative 17%… what happened here? In the first place, 1 out of 20 losers is phenomenal! There will be losers, there will be losses, that is a given in any trading system. The key is to get rid of the losers fast and then wait for the winners to pay the bills.
What follows is a buy & hold result, showing where the stock prices are on 12/26/03 compared to where they were when selected. However, Pro-fundity provides a “wind to our backs” environment where trading strategies can give us even greater returns. For example, EXAS had a negative return in the previous watch-list. The price chart is shown here to give a flavor of profit possibilities. By exercising trading techniques, EXAS would not have been a loser. Likewise, other returns could be higher. That said, a buy & hold trader could benefit as the watchlists show. 
Fig. 2 Price chart for EXAS, showing this pick did not have to be a loser. - Performance in Fig. 1 is pretty astounding! OK, you say, what about the rest of the year? Picks for that one week alone does not a credible system make. In what follows we’ll cover picks made during other weeks in January as well as in each of the other 12 months. Hang on for a ride. The next figure shows picks chosen one week later.
Fig. 3 Pick performance, chosen 2nd week in January, 350 days ago. - This performance review bears out the "wind to our backs" approach, selecting volatile stocks with good fundamentals. Why else do these picks sustain continued growth over time? But again, with the positives shown in this Guidepost, applying technical analysis trading skills can make the results better, with higher returns than those shown.
Fig. 4 Pick performance, chosen 343 days ago. - Still in January, here are Quick-Picks made on January 24th.
Fig. 5 Pick performance, Quick Picks, chosen 336 days ago. - Finally, lets close last January’s review with picks from the final week.
Fig. 6 Pick performance, chosen the last day in January. - Notice the low price of many selections. Some traders will not touch a company with price lower than $30 or $20. As you will see through this review, many of our successful picks are under $10. Now let’s sample picks from each month going forward, first with stocks chosen on February 14th.
Fig. 7 Pick performance, Quick Picks, 315 days later. - March
Fig. 8 Pick performance, Quick Picks, 287 days ago. - April
Fig. 9 Pick performance, Main Picks, 245 days later. - May
Fig. 10 Pick performance, Quick Picks, 224 days later. - Notice the last pick on the list, IGLD. This turned in a disappointing negative 28% during the time-frame. Point: Had you used any of the money-management tricks we’ve labored on this past year, the worst-case loss here should have been about a negative 10%. That means the average performance result for the list of picks would have better than the +111.56% shown! Keep that in mind as the review continues.
- June
Fig. 11 Pick performance, Breakout Picks, 196 days ago. - July
Fig. 12 Pick performance, Quick Picks, 168 days later. - August
Fig. 13 Pick performance, Main Picks, 133 days later. - September
Fig. 14 Pick performance, Breakout Picks, 112 days later. - October
Fig. 15 Pick performance, 84 days in. - November
Fig. 16 Pick performance, Breakout Picks, 49 days later. - December pick performance is shown in the link Pick Performance on the page. There is one profound trading rule shown in these charts, called the “Real secret to short-term trading.” If you take nothing else away from this “data crunch” exercise it should be this:
The shorter your trading time-frame, the less money you will make. It takes time for profits to grow. Losing traders are generally those who want to trade in a very short time. This is perhaps due to the mythical “day-trading” mentality of big returns in short periods of time. However, limiting trades to a short time-frame automatically limits profit potential! - Read that side-bar again, carefully. Read this year-end pick performance review again, carefully. Let this lesson sink in as you prepare to take advantage of the greatest market on earth in 2004. Let Pro-fundity be your constant companion as you do.
Main Picks - ADSK,DFG,EMT,EVG,HAL,MNY,NOI,TBI,TKR,TNE
Breakout Picks - ACAS,CBB,IRGI,KEA,LGF,NXTP,SBTV,TEO,UCOMA,UNTD
Quick Picks - BYH,CHRB,DITC,ECIL,ENCY,ISSC,NANO,PMTI,TINY,TTF
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