______________________________________________________________________________
Issue No. 54 – November 28, 2005
Prescott, Arizona Systems@WiserTrader.com
______________________________________________________________________________
1.0
Trading
This is the 1 year
anniversary of the newsletter. Thanks for your participation and helping us
grow. Many changes have occurred over the past year, including new trading
system tools and advisory services. Several new watchlists have been added with
improved organization based on the extent to which stocks are oversold. With
this issue it is fitting to comment on the resumption of accepting stock
advisory subscriptions and how the stock advisory has changed.
1.1 Holding Period for Value Stocks
Since September of this
year, the newsletter has developed value stock filters that provide a higher
level of confidence for holding stocks for extended periods. As an options
trader, the average holding period for options contracts has averaged less than
10 days, including weekends. Except for a few months, it has worked fairly
well over this year, resulting in net capital increases ranging from 28% when
trading 10% of risk capital per trade to 98% when trading 20% of risk capital
per trade. But this short holding period is by no means optimum. It was more
a matter of not having confidence to hold positions longer. Several cases can
be identified where longer holding periods would have led to higher profits,
not only due to the option’s price appreciation but also due to fewer trades
and lower brokerage fees. The lack of confidence to hold positions for a
longer period is due to a lack of historical analysis data for the class of
growth stocks used in options trading. That will soon be corrected.
In the case of stock
trading, lower brokerage fees and a lower frequency of trading becomes more
important because the relative price change for a stock over a few weeks is much
lower than for its associated options contract. The more modest stock gain can
not cover brokerage fees for such a high trading frequency. The first version
of the stock advisory documents how easily broker fees can consume stock
trading profits for such a high trading frequency. A need to reduce the
frequency of trades, more than any other factor, was the motivation for the
value stock analysis published in the newsletter over the past few months.
© 2005 WiserTrader.com, LLC. Members of wisertrader.com are neither licensed
brokers nor licensed advisors. Trades discussed represent recommendations
made by the editor for the wisertrader.com portfolio. The newsletter and web
site are for information only and should not be considered as personal advice.
While it is believed that the posted information is factual, mistakes can be
made in transcription. Investors should trade stocks only after verifying all
information and consulting with a licensed broker or adviser. WiserTrader.commarkets third party trading systems but has no other affiliation
with trading system companies.
It was shown last week how
two new value filters allowed one to hold stocks over the past year with more
than a 25% average profit. Stop loss settings, of little consequence for the
then prevailing market conditions, are continuously being evaluated. With this
new level of confidence to hold stocks for longer periods, the value stock portfolio
review period has been reduced from weekly to once a month. This will reduce
the number of trades and brokerage fees. Other than this change and the move
from growth stocks to value stocks, the stock advisory is the same as before.
As promised a couple of
weeks ago, the new filters are being used to begin tracking stocks in a
watchlist. Value stocks that met the first round of expanded filter criteria
are listed in Table 1. Some of these stocks will be added to the value stock
portfolio, one at a time, as entry conditions develop. The absolute value
filter (the first 7 stocks) and the industry relative filter (the last 4
stocks) are repeated in Table 2. You are invited, at no cost, to find out more about the
companies in Table 1 and trade entry conditions used by the value stock
advisory beginning with the December bulletin.
Next week begins an
analysis of the impact of various stop loss settings for growth stocks that
have been screened using Dr. Stephen Cooper’s stock candidate filter.
Table 1
Value Stock
Advisory Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
|
ASI
|
11/21/05
|
1.1%
|
American
Safety Insurance Holdings, Ltd.
|
Financial
|
Insurance
(Property & Casualty)
|
0.3%
|
1.1%
|
|
BNSO
|
11/21/05
|
-2.9%
|
Bonso
Electronics International Inc.
|
Capital
Goods
|
Misc.
Capital Goods
|
-3.3%
|
-1.6%
|
|
CRC
|
11/21/05
|
-0.7%
|
Chromcraft
Revington, Inc.
|
Consumer
Cyclical
|
Furniture
& Fixtures
|
-0.7%
|
-0.7%
|
|
CRV
|
11/21/05
|
-2.8%
|
The Coast
Distribution System, Inc.
|
Consumer
Cyclical
|
Auto &
Truck Parts
|
-2.8%
|
-1.5%
|
|
LFG
|
11/21/05
|
-4.8%
|
LandAmerica
Financial Grp
|
Financial
|
Insurance
(Property & Casualty)
|
-4.8%
|
-3.6%
|
|
MHJ
|
11/21/05
|
2.2%
|
Man Sang
Holdings, Inc.
|
Consumer
Cyclical
|
Jewelry
& Silverware
|
-0.8%
|
1.6%
|
|
RUTX
|
11/21/05
|
2.6%
|
Republic
Companies Group, Inc.
|
Financial
|
Insurance
(Miscellaneous)
|
0.6%
|
4.1%
|
|
BTHS
|
11/21/05
|
0.2%
|
Benthos,
Inc.
|
Technology
|
Scientific
& Technical Instruments
|
-0.3%
|
0.5%
|
|
CAMP
|
11/21/05
|
-2.2%
|
CalAmp
Corp.
|
Technology
|
Communications
Equipment
|
-2.2%
|
-5.4%
|
|
CHAP
|
11/21/05
|
-0.2%
|
Chaparral
Steel Company
|
Capital
Goods
|
Construction
- Supplies and Fixtures
|
-0.2%
|
-2.1%
|
|
NCR
|
11/21/05
|
5.6%
|
NCR
Corporation
|
Technology
|
Computer
Services
|
5.1%
|
8.6%
|
Table 2
Valuation Metrics
to Minimize the Probability of Loss
|
Valuation Metric
|
Stock Value That
Reduced Risk of Loss *
|
Corresponding Ratio
of Stock Value to Industry Value *
|
|
Price to Earnings (PE)
|
(7) 10 to 15
|
0.5 to 0.75 (1)
|
|
Price to Book (PB)
|
< 1
|
0.5 to 0.75 (1)
|
|
Price to Sales (PS)
|
< 0.5 (1)
|
0.5 to 0.75 (1)
|
|
Return on Equity (ROE)
|
10 to 20
|
2 to 3
|
|
Price to Free Cash Flow (P-FCF)
|
< 5 (10)
|
(0.5) 0.75 to 1
|
|
* Numbers in parenthesis are to extend the range.
|
2.0 Market Analysis
Bullish sentiment continues
for the fifth straight weekly gain for the S&P 500 index. FOMC minutes
point to a discussion of nearing the end of rate tightening. This is bullish.
All major sectors gained this week across the board.
Key industry ETF’s in Table
2A are Biotech and Semiconductors which confirm the NASDAQ. Transportation
confirms the Dow Jones Industrial Average according to Dow Theory. Banking
and Financials are confirming indicators for the S&P 500. Gold and Real
Estate are respective indicators for the inverse health of the currency and the
capacity for consumer spending.
Table 2A
Indices, Key Industry
ETF’s and Sector SPDR’s
|
|
1 month
|
1 wk ago
|
2 wks ago
|
3 wks ago
|
4 wks ago
|
|
Dow Jones Industrials
|
5.1%
|
1.5%
|
0.8%
|
1.5%
|
1.2%
|
|
NASDAQ
|
8.3%
|
1.6%
|
1.1%
|
1.5%
|
3.8%
|
|
S & P 500
|
5.8%
|
1.6%
|
1.1%
|
1.2%
|
1.8%
|
|
Russell 2000
|
7.6%
|
1.7%
|
0.8%
|
1.3%
|
3.6%
|
|
GLD, GOLD
|
4.7%
|
2.0%
|
3.5%
|
2.8%
|
-3.6%
|
|
RKH, Banking
|
6.0%
|
2.4%
|
-0.6%
|
3.7%
|
0.4%
|
|
IYT, Transportation
|
12.1%
|
0.8%
|
1.7%
|
3.8%
|
5.4%
|
|
SMH, Semiconductors
|
12.5%
|
2.7%
|
1.4%
|
2.0%
|
5.9%
|
|
BBH, Biotechnology
|
10.2%
|
-0.3%
|
2.0%
|
2.3%
|
6.0%
|
|
IYR, Real Estate
|
7.1%
|
2.5%
|
1.2%
|
4.4%
|
-1.2%
|
|
OIH, Oil
|
9.4%
|
6.0%
|
4.9%
|
-4.7%
|
3.2%
|
|
XLE,
Energy
|
5.7%
|
4.0%
|
3.3%
|
-4.1%
|
2.5%
|
|
XLU,
Utilities
|
2.3%
|
1.9%
|
1.7%
|
-0.8%
|
-0.5%
|
|
XLB,
Materials
|
8.1%
|
1.4%
|
2.4%
|
2.7%
|
1.3%
|
|
XLI,
Industrial
|
6.6%
|
1.0%
|
2.5%
|
1.5%
|
1.5%
|
|
XLK,
Technology
|
8.2%
|
1.4%
|
1.9%
|
1.2%
|
3.4%
|
|
XLV,
Healthcare
|
3.3%
|
0.0%
|
0.6%
|
1.4%
|
1.3%
|
|
XLF,
Financials
|
7.1%
|
2.4%
|
0.3%
|
3.2%
|
1.1%
|
|
XLP,
Consumer Staples
|
2.7%
|
1.3%
|
-0.4%
|
1.4%
|
0.4%
|
|
XLY,
Consumer Discretionary
|
7.6%
|
1.5%
|
0.5%
|
1.4%
|
3.9%
|
3.0 Procedure
The following watch lists contain
stock candidates for consideration. They are not necessarily trades.
Categories include check lists for insider buying and cash rich companies, as
well as, filters that employ stock picking methods used by master traders.
Current stock rankings are
based on the degree to which stocks are overbought or over sold based on the
Williams %R for the past two trading days. Two columns are labeled “%R1”
and “%R2” with “%R2” indicating the Williams %R for the most recent trading
day. Of course, values more negative than -80 are oversold and those less
negative than -20 are overbought.
A column labeled “Weekly %
Gain” was added to show the inverse relationship between price action over the
past week and the Williams %R.
One should keep in mind
that oversold stocks are not necessarily ready to move upward. They could very
well be in a condition of continuous decline. The lists are meant to serve as
a starting point for further due diligence.
The “Reference” is the date
that a stock passed the indicated filter and was first added to or returned to
the list. The “% Change” is how the price has changed since the reference date.
Stocks that are down 10% or more after being listed are removed. The “% from Max”
is the percentage the price has declined from the maximum price reached since
the reference date. Stocks that are down 8% from their highs after being
listed are flagged in yellow. Stocks that are down 15% from their highs after
being listed are removed. More information on filters is available on the web
site.
A performance summary of
filtering techniques for check lists and master trader selection methods is
given in Table 3A.
Table 3A
Stock Filter Summary
|
Filter
|
Avg. % Change Since Listed
|
Avg. % Change Friday
|
Past Month
|
Past Week
|
2 weeks Ago
|
3 Weeks Ago
|
4 Weeks Ago
|
|
Net Insider Buying
|
9.6%
|
0.0%
|
5.4%
|
3.6%
|
-0.8%
|
0.9%
|
2.2%
|
|
Cash Rich Companies
|
-0.1%
|
0.9%
|
1.3%
|
0.5%
|
-0.1%
|
-0.8%
|
1.8%
|
|
Growth Momentum Stocks
|
9.7%
|
0.4%
|
9.7%
|
2.6%
|
1.6%
|
1.9%
|
3.2%
|
|
Lynch Stocks
|
18.8%
|
-1.0%
|
4.8%
|
0.8%
|
0.8%
|
1.3%
|
1.8%
|
|
Buffett Stocks
|
20.4%
|
0.2%
|
9.6%
|
2.3%
|
0.9%
|
1.5%
|
4.7%
|
|
Graham Stocks
|
10.3%
|
0.2%
|
3.9%
|
2.5%
|
0.4%
|
-0.1%
|
1.1%
|
|
Templeton Stocks
|
6.4%
|
0.1%
|
4.9%
|
0.6%
|
1.1%
|
1.1%
|
2.1%
|
|
Zweig Stocks
|
15.7%
|
0.4%
|
13.6%
|
4.1%
|
2.3%
|
1.3%
|
5.4%
|
|
Average
|
11.4%
|
0.2%
|
6.7%
|
2.1%
|
0.8%
|
0.9%
|
2.8%
|
Key
|
Passed
Recent Filter
|
|
Price
declined by half of stop loss setting
|
|
Oversold
based on Williams %R (%R2 is most recent)
|
|
Overbought
based on Williams %R
(%R2 is most recent)
|
Companies that have
experienced net insider buying within the past 6 months of 5% or more of issued
stock are listed in Table 3B. These stocks should also appear in one of the master
trader screens or meet additional screening criteria before being given serious
consideration. This list is a mixture of stocks that are optionable and those
that are not.
Table 3B
Net Insider Buying Check List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
CRYO
|
11/25/05
|
0.0%
|
CryoCor,
Inc.
|
Health
Care
|
Medical
Equipment & Supplies
|
0.0%
|
0.2%
|
-94
|
-93
|
|
MBRX
|
10/14/05
|
2.4%
|
Metabasis
Therapeutics, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
-11.0%
|
-4.3%
|
-77
|
-73
|
|
MMLP
|
11/25/05
|
0.0%
|
Martin
Midstream Partners L.P.
|
Transportation
|
Water
Transportation
|
0.0%
|
2.1%
|
-79
|
-61
|
|
XGEN
|
11/25/05
|
0.0%
|
Xenogen
Corporation
|
Technology
|
Scientific
& Technical Instruments
|
0.0%
|
7.1%
|
-82
|
-58
|
|
TRMA
|
10/28/05
|
3.5%
|
Trico
Marine Services Inc
|
Energy
|
Oil Well
Services & Equipment
|
-2.5%
|
1.1%
|
-68
|
-49
|
|
REDE
|
09/02/05
|
25.7%
|
RedEnvelope,
Inc.
|
Services
|
Retail
(Catalog & Mail Order)
|
-1.0%
|
1.4%
|
-39
|
-48
|
|
CLRT
|
11/18/05
|
8.9%
|
Clarient,
Inc.
|
Technology
|
Scientific
& Technical Instruments
|
8.9%
|
8.9%
|
-58
|
-29
|
|
MTRX
|
10/14/05
|
1.4%
|
Matrix
Service Company
|
Capital
Goods
|
Construction
Services
|
-9.3%
|
1.7%
|
-60
|
-14
|
|
MEAD
|
09/30/05
|
1.1%
|
Meade
Instruments Corp.
|
Technology
|
Scientific
& Technical Instruments
|
-3.2%
|
2.7%
|
-53
|
-13
|
|
PCTY
|
09/16/05
|
29.7%
|
Party City
Corporation
|
Services
|
Retail
(Specialty Non-Apparel)
|
1.1%
|
1.1%
|
-25
|
-8
|
|
ISO
|
10/07/05
|
35.7%
|
ISCO
International, Inc.
|
Technology
|
Semiconductors
|
8.6%
|
11.8%
|
-33
|
40
|
|
VSTA
|
10/21/05
|
6.3%
|
VistaCare,
Inc.
|
Health
Care
|
Healthcare
Facilities
|
3.9%
|
9.7%
|
-38
|
113
|
Companies with net cash
positions that comprise at least 40% of their share price are listed in Table 3C.
These stocks should also appear in one of the master trader screens or meet
additional screening criteria before being given serious consideration. Again
this list is a mixture of stocks that are optionable and those that are not.
Table 3C
Capital Rich Companies Check List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
KEYN
|
11/25/05
|
0.0%
|
Keynote
Systems, Inc.
|
Technology
|
Computer
Services
|
0.0%
|
-0.2%
|
-76
|
-22
|
|
WSC
|
07/01/05
|
-0.1%
|
Wesco
Financial Corporation
|
Conglomerates
|
Conglomerates
|
-0.2%
|
1.1%
|
-56
|
-5
|
For the screen in
Table 3D, the number of selections is reduced by selecting only optionable
stocks having P/E’s less than 30.
Table 3D
Growth Momentum Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
HCC
|
10/21/05
|
15.0%
|
HCC
Insurance Holdings, Inc.
|
Financial
|
Insurance
(Property & Casualty)
|
-4.8%
|
-1.9%
|
-8
|
-99
|
|
VTIV
|
11/11/05
|
-2.1%
|
Ventiv
Health, Inc.
|
Services
|
Business
Services
|
-4.0%
|
-0.7%
|
-36
|
-85
|
|
UNH
|
04/15/05
|
29.0%
|
UnitedHealth
Group Inc.
|
Financial
|
Insurance
(Accident & Health)
|
-1.3%
|
-1.3%
|
0
|
-33
|
|
LM
|
08/12/05
|
15.5%
|
Legg
Mason, Inc.
|
Financial
|
Investment
Services
|
1.4%
|
4.7%
|
-46
|
-18
|
|
ET
|
10/21/05
|
8.9%
|
E*TRADE
FINANCIAL Corporation
|
Financial
|
Investment
Services
|
0.3%
|
1.5%
|
-38
|
-17
|
|
SYT
|
04/08/05
|
2.8%
|
Syngenta
AG (ADR)
|
Basic
Materials
|
Chemical
Manufacturing
|
-2.1%
|
-0.9%
|
-31
|
-16
|
|
BHP
|
09/09/05
|
3.6%
|
BHP
Billiton Limited (ADR)
|
Basic
Materials
|
Metal
Mining
|
-4.5%
|
2.2%
|
-3
|
-11
|
|
ADTN
|
11/25/05
|
0.0%
|
ADTRAN,
Inc.
|
Technology
|
Communications
Equipment
|
0.0%
|
4.0%
|
-15
|
5
|
|
CTX
|
11/18/05
|
2.6%
|
Centex
Corporation
|
Capital
Goods
|
Construction
Services
|
2.6%
|
2.6%
|
-2
|
10
|
|
WSO
|
11/25/05
|
0.0%
|
Watsco,
Incorporated
|
Capital
Goods
|
Misc.
Capital Goods
|
0.0%
|
4.0%
|
-9
|
10
|
|
BEN
|
11/04/05
|
7.5%
|
Franklin Resources
|
Financial
|
Investment
Services
|
2.2%
|
2.6%
|
-17
|
19
|
|
ENDP
|
11/18/05
|
2.7%
|
Endo
Pharmaceuticals
|
Health
Care
|
Biotechnology
& Drugs
|
2.7%
|
2.7%
|
31
|
28
|
|
OSK
|
03/12/05
|
13.1%
|
Oshkosh
Truck Corporation
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
-0.3%
|
1.6%
|
-23
|
38
|
|
AMTD
|
10/28/05
|
16.6%
|
Ameritrade
Holding Corp.
|
Financial
|
Investment
Services
|
4.6%
|
6.2%
|
-1
|
50
|
|
BJS
|
11/04/05
|
7.7%
|
BJ
Services Company
|
Energy
|
Oil Well
Services & Equipment
|
6.5%
|
6.5%
|
-30
|
54
|
|
CHE
|
05/06/05
|
31.9%
|
Chemed
Corporation
|
Services
|
Business
Services
|
3.4%
|
7.9%
|
-56
|
189
|
For the Peter Lynch screen
in Table 3E, the number of selections is reduced by selecting only optionable
stocks having P/E’s less than 30.
Table 3E
Peter Lynch Value Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
BTI
|
08/12/05
|
8.3%
|
British
American Tobacco (ADR)
|
Consumer
Non-Cyclical
|
Tobacco
|
-5.9%
|
-3.9%
|
-55
|
-137
|
|
PKX
|
04/29/05
|
9.7%
|
POSCO
(ADR)
|
Basic
Materials
|
Iron &
Steel
|
-12.5%
|
-1.5%
|
-46
|
-104
|
|
KOF
|
04/29/05
|
10.9%
|
Coca-Cola
FEMSA, S.A. (ADR)
|
Consumer
Non-Cyclical
|
Beverages
(Non-Alcoholic)
|
-11.6%
|
0.5%
|
-53
|
-63
|
|
SKM
|
02/07/05
|
0.9%
|
SK Telecom
Co., Ltd. (ADR)
|
Services
|
Communications
Services
|
-12.1%
|
0.1%
|
-3
|
-24
|
|
TM
|
12/13/04
|
31.0%
|
Toyota
Motor Corporation (ADR)
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
-1.1%
|
-0.4%
|
-4
|
-7
|
|
CHL
|
03/18/05
|
44.9%
|
China Mobile (Hong Kong) Limited
|
Services
|
Communications
Services
|
-1.4%
|
1.1%
|
0
|
8
|
|
TMX
|
06/03/05
|
25.6%
|
Telefonos
de Mexico, S.A. (ADR)
|
Services
|
Communications
Services
|
3.1%
|
9.8%
|
-28
|
195
|
The filter for Warren
Buffet style stock picking in Table 3F is for the intermediate to long term.
Two requirements were added. One was to include only optionable stocks in
order to find LEAPS opportunities. The other requirement was to include only
those stocks having a PE of 17 or less.
Table 3F
Warren Buffett Value Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
EASI
|
09/09/05
|
18.1%
|
Engineered
Support System
|
Capital
Goods
|
Misc.
Capital Goods
|
-3.5%
|
-3.4%
|
-22
|
-141
|
|
FNF
|
10/21/05
|
3.6%
|
Fidelity
National Financial
|
Financial
|
Insurance
(Property & Casualty)
|
-4.2%
|
-0.2%
|
-78
|
-81
|
|
ACS
|
04/29/05
|
16.4%
|
Affiliated
Computer Services, Inc.
|
Technology
|
Computer
Services
|
-2.1%
|
-2.1%
|
-7
|
-76
|
|
ABFS
|
04/29/05
|
32.7%
|
Arkansas
Best Corporation
|
Transportation
|
Trucking
|
-1.8%
|
-0.4%
|
-30
|
-48
|
|
PGR
|
12/27/04
|
44.1%
|
The
Progressive Corp.
|
Financial
|
Insurance
(Property & Casualty)
|
-1.2%
|
0.2%
|
-16
|
-35
|
|
LNCR
|
12/27/04
|
4.6%
|
Lincare
Holdings Inc.
|
Health
Care
|
Healthcare
Facilities
|
-4.2%
|
0.0%
|
-41
|
-28
|
|
DSPG
|
02/07/05
|
5.3%
|
DSP Group,
Inc.
|
Technology
|
Communications
Equipment
|
-0.9%
|
-0.2%
|
-27
|
-12
|
|
RCII
|
10/21/05
|
20.7%
|
Rent-A-Center,
Inc
|
Services
|
Rental
& Leasing
|
1.3%
|
1.8%
|
-29
|
-1
|
|
THO
|
04/15/05
|
32.5%
|
Thor
Industries, Inc.
|
Capital
Goods
|
Mobile
Homes & RVs
|
-1.3%
|
2.4%
|
-32
|
4
|
|
NUE
|
04/15/05
|
35.0%
|
Nucor
Corporation
|
Basic
Materials
|
Iron &
Steel
|
0.6%
|
4.0%
|
-1
|
9
|
|
RS
|
04/15/05
|
69.2%
|
Reliance
Steel & Aluminum
|
Basic
Materials
|
Misc.
Fabricated Products
|
1.3%
|
4.2%
|
-4
|
11
|
|
ASH
|
10/28/05
|
5.8%
|
Ashland
Inc.
|
Capital
Goods
|
Construction
Services
|
2.2%
|
2.9%
|
-46
|
16
|
|
NKE
|
09/23/05
|
8.5%
|
NIKE, Inc.
|
Consumer
Cyclical
|
Footwear
|
0.2%
|
0.6%
|
-44
|
18
|
|
DHI
|
10/21/05
|
18.1%
|
D.R.
Horton Inc.
|
Capital
Goods
|
Construction
Services
|
4.7%
|
5.2%
|
-8
|
21
|
|
CECO
|
09/30/05
|
3.5%
|
Career
Education Corp.
|
Services
|
Schools
|
1.7%
|
4.7%
|
-36
|
39
|
|
HDI
|
10/14/05
|
12.0%
|
Harley-Davidson,
Inc.
|
Consumer
Cyclical
|
Recreational
Products
|
0.5%
|
2.9%
|
-1
|
43
|
|
RI
|
09/02/05
|
13.7%
|
Ruby
Tuesday, Inc.
|
Services
|
Restaurants
|
4.0%
|
5.0%
|
-58
|
85
|
|
MIK
|
10/14/05
|
23.9%
|
Michaels
Stores, Inc.
|
Services
|
Retail
(Specialty Non-Apparel)
|
11.0%
|
13.4%
|
-40
|
169
|
Stocks from Benjamin
Graham’s style of utility investing are listed in Table 3G. A requirement was
added to include only those stocks having a PE of 17 or less.
Table 3G
Benjamin Graham Utility Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
CPK
|
05/06/05
|
19.2%
|
Chesapeake Utilities
|
Utilities
|
Natural
Gas Utilities
|
-11.9%
|
-0.7%
|
-96
|
-102
|
|
WPS
|
02/07/05
|
4.9%
|
WPS
Resources Corp
|
Utilities
|
Electric
Utilities
|
-9.3%
|
0.3%
|
-86
|
-83
|
|
ATG
|
10/21/05
|
8.9%
|
AGL
Resources Inc.
|
Utilities
|
Natural
Gas Utilities
|
-0.9%
|
0.5%
|
-71
|
-43
|
|
SRE
|
01/10/05
|
20.3%
|
Sempra
Energy
|
Utilities
|
Natural
Gas Utilities
|
-8.4%
|
2.7%
|
-68
|
-29
|
|
KEP
|
01/10/05
|
35.4%
|
Korea
Electric Power Corporation (ADR)
|
Utilities
|
Electric
Utilities
|
-8.8%
|
0.4%
|
-6
|
-18
|
|
PNW
|
01/10/05
|
-2.8%
|
Pinnacle
West Capital
|
Utilities
|
Electric
Utilities
|
-9.7%
|
0.0%
|
-26
|
-6
|
|
OKE
|
11/11/05
|
4.2%
|
ONEOK,
Inc.
|
Utilities
|
Natural
Gas Utilities
|
0.5%
|
1.7%
|
-65
|
6
|
|
UU
|
06/10/05
|
-3.9%
|
United Utilities
PLC (ADR)
|
Utilities
|
Electric
Utilities
|
-6.1%
|
1.5%
|
-9
|
10
|
|
PGN
|
01/10/05
|
2.2%
|
Progress
Energy, Inc.
|
Utilities
|
Electric
Utilities
|
-1.5%
|
1.7%
|
-24
|
36
|
|
ATO
|
04/01/05
|
0.7%
|
Atmos
Energy Corporation
|
Utilities
|
Natural
Gas Utilities
|
-8.9%
|
2.7%
|
-66
|
90
|
|
CV
|
10/14/05
|
24.3%
|
Central
Vermont Public Services Corp.
|
Utilities
|
Electric
Utilities
|
15.2%
|
16.2%
|
-4
|
202
|
Optionable stocks from John Templeton’s style of
investing are listed in Table 3H.
Table 3H
John Templeton Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
EASI
|
06/03/05
|
13.3%
|
Engineered
Support System
|
Capital
Goods
|
Misc.
Capital Goods
|
-3.5%
|
-3.4%
|
-22
|
-141
|
|
CHD
|
11/18/05
|
-1.0%
|
Church
& Dwight Co., Inc.
|
Consumer
Non-Cyclical
|
Personal
& Household Products
|
-1.0%
|
-1.0%
|
-82
|
-88
|
|
HHS
|
10/28/05
|
1.8%
|
Harte-Hanks,
Inc.
|
Services
|
Printing
& Publishing
|
-1.7%
|
-1.6%
|
-18
|
-57
|
|
KRON
|
10/28/05
|
5.8%
|
Kronos
Incorporated
|
Technology
|
Software
& Programming
|
-2.3%
|
-2.3%
|
-37
|
-53
|
|
JNJ
|
05/27/05
|
-7.8%
|
Johnson
& Johnson
|
Health
Care
|
Major
Drugs
|
-7.8%
|
-0.6%
|
-53
|
-49
|
|
AMSG
|
10/14/05
|
3.3%
|
AmSurg
Corp.
|
Health
Care
|
Healthcare
Facilities
|
-2.5%
|
0.2%
|
-40
|
-48
|
|
CAKE
|
10/21/05
|
3.5%
|
The
Cheesecake Factory Inc
|
Services
|
Restaurants
|
-1.8%
|
2.0%
|
-25
|
-13
|
|
SNV
|
05/27/05
|
-3.2%
|
Synovus
Financial Corp.
|
Financial
|
Regional
Banks
|
-5.4%
|
0.7%
|
-16
|
-7
|
|
LOW
|
11/18/05
|
1.2%
|
Lowe's
Companies, Inc.
|
Services
|
Retail
(Home Improvement)
|
-0.4%
|
1.2%
|
-13
|
-6
|
|
MTB
|
05/27/05
|
7.6%
|
M&T
Bank Corporation
|
Financial
|
Regional
Banks
|
-1.3%
|
0.9%
|
-36
|
-3
|
|
SFG
|
05/27/05
|
40.6%
|
StanCorp
Financial Group, Inc.
|
Financial
|
Insurance
(Life)
|
1.1%
|
2.1%
|
-15
|
13
|
|
CPS
|
05/27/05
|
8.7%
|
ChoicePoint
Inc.
|
Services
|
Business
Services
|
-0.4%
|
1.4%
|
-40
|
30
|
|
DGX
|
08/19/05
|
0.8%
|
Quest
Diagnostics Incorporated
|
Health
Care
|
Healthcare
Facilities
|
-2.1%
|
2.5%
|
-39
|
51
|
|
WSM
|
09/02/05
|
15.5%
|
Williams-Sonoma,
Inc.
|
Services
|
Retail
(Specialty Non-Apparel)
|
5.6%
|
5.6%
|
-62
|
130
|
Optionable stocks from
Martin Zweig’s style of investing are listed in Table 3I.
Table 3I
Martin Zweig Watch List
Ranked According to the Most
Oversold Using the Williams %R
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
ZIGO
|
11/11/05
|
-5.2%
|
Zygo
Corporation
|
Technology
|
Semiconductors
|
-5.2%
|
-0.9%
|
-69
|
-80
|
|
COP
|
10/28/05
|
1.2%
|
ConocoPhillips
|
Energy
|
Oil &
Gas - Integrated
|
-6.1%
|
2.8%
|
-73
|
-58
|
|
ESI
|
11/04/05
|
3.3%
|
ITT
Educational Services
|
Services
|
Schools
|
-2.2%
|
-1.6%
|
-10
|
-50
|
|
CRDN
|
08/19/05
|
48.5%
|
Ceradyne,
Inc.
|
Capital
Goods
|
Aerospace
and Defense
|
-1.7%
|
1.0%
|
-5
|
-31
|
|
CAE
|
06/10/05
|
21.5%
|
Cascade
Corporation
|
Capital
Goods
|
Misc.
Capital Goods
|
-0.4%
|
0.1%
|
-16
|
-22
|
|
EXP
|
10/28/05
|
10.8%
|
Eagle
Materials, Inc.
|
Capital
Goods
|
Construction
- Raw Materials
|
-2.8%
|
-1.8%
|
-38
|
-20
|
|
SM
|
10/21/05
|
17.0%
|
St. Mary
Land & Exploration Co.
|
Energy
|
Oil &
Gas Operations
|
-0.2%
|
4.9%
|
-33
|
-12
|
|
MCO
|
07/29/05
|
25.4%
|
Moody's
Corporation
|
Services
|
Business
Services
|
0.5%
|
2.0%
|
-14
|
2
|
|
SUN
|
11/04/05
|
10.4%
|
Sunoco,
Inc.
|
Energy
|
Oil &
Gas Operations
|
5.6%
|
5.9%
|
0
|
4
|
|
POOL
|
06/10/05
|
16.3%
|
SCP Pool
Corporation
|
Consumer
Cyclical
|
Recreational
Products
|
0.9%
|
3.2%
|
-53
|
7
|
|
CTX
|
10/28/05
|
19.2%
|
Centex
Corporation
|
Capital
Goods
|
Construction
Services
|
2.6%
|
2.6%
|
-2
|
10
|
|
BEN
|
10/28/05
|
13.2%
|
Franklin Resources
|
Financial
|
Investment
Services
|
1.2%
|
2.6%
|
-17
|
19
|
|
DHI
|
11/18/05
|
5.2%
|
D.R.
Horton Inc.
|
Capital
Goods
|
Construction
Services
|
5.2%
|
5.2%
|
-8
|
21
|
|
SFY
|
10/14/05
|
13.8%
|
Swift
Energy Company
|
Energy
|
Oil &
Gas Operations
|
5.6%
|
5.9%
|
-33
|
40
|
|
CDIS
|
11/04/05
|
13.7%
|
Cal Dive
International, Inc.
|
Energy
|
Oil Well
Services & Equipment
|
9.0%
|
9.0%
|
-2
|
66
|
|
CERS
|
11/18/05
|
19.5%
|
Cerus
Corporation
|
Health
Care
|
Biotechnology
& Drugs
|
19.5%
|
19.5%
|
-57
|
72
|
|
CMTL
|
07/01/05
|
33.6%
|
Comtech
Telecomm. Corp.
|
Technology
|
Communications
Equipment
|
-0.6%
|
9.6%
|
-7
|
106
|
4.0
Trading Results
This section highlights
performance of options trades. Only a summary is provided here to save space.
Detailed lists of closed trades can be found on the portfolio page of the
website.
Options Trading
|
Options Trading Estimation Model -
Minimum Suggested Initial Capital is $3,000
|
|
Number of trades in 2005 =
|
70
|
70
|
70
|
(1.5 trades per week)
|
|
Number of contracts per trade =
|
1
|
2
|
3
|
|
|
Avg. Premium Cost per trade =
|
$620.40
|
$1,240.80
|
$1,861.20
|
|
|
Total Premiums =
|
$43,428.00
|
$86,856.00
|
$130,284.00
|
|
|
Gross Profit =
|
$3,904.81
|
$7,809.62
|
$11,714.43
|
(9.5%)
|
|
Broker Commission (Etrade) =
|
-$1,573.60
|
-$1,748.60
|
-$1,923.60
|
|
|
Subscription Cost to date =
|
-$660.00
|
-$660.00
|
-$660.00
|
|
|
Net Profit After Expenses =
|
$1,671.21
|
$5,401.02
|
$9,130.83
|
(Avg.
holding period 7.7 days)
|
5.0 Conclusion
Net Growth of Total Capital in
2005
|
Options
Advisory (trading 2 contracts)
Aggressive, 20% of risk capital per trade
Moderate, 15% of risk capital per trade
Conservative, 10% of risk capital per trade
|
+ 88.1%
+ 66.1%
+ 44.0%
|
|
Major Indices Year to Date
11/26/05
|
|
DOW
|
+1.4%
|
|
NASDAQ
|
+4.0%
|
|
S&P500
|
+4.6%
|
|
Russell
2000
|
+4.9%
|
Appendix - Investment Conference
Schedule
Below are links to
conference registration sites where you can sign up.
- 11-27-05 San Francisco, CA "Gold and Precious Metals Conference"
Both
professional and sophisticated private investors meet with the world's
leaders in gold, silver, precious metals, copper and oil and gas
exploration and production. The Natural Resource industry's newest
opportunities are presented, together with educational seminars, executive
panels and investment workshops led by top finance specialists, economic
analysts and newsletter editors. Admission is complimentary with
pre-registration.
- 01-30-06 Miami, Florida "IIR’s 19th Annual
Private Placements Industry Forum" is the pre-eminent gathering for the latest developments in
originating, buying and structuring private debt placements. Join us in
sunny Miami, Florida in January as the industry’s leading decision makers
discuss new market trends, including: project finance, cross border deals
and the impact of pre-designated investor counsel. Plus, enjoy over 6 hours of networking opportunities including our two hour Rooftop Dessert and Cordial Suite. Don’t delay, register for
the Institute for International
Research's 19th Annual Private Placements Industry Forum today!
- 02-07-06 Cape Town, South Africa "Investing in African
Mining Conference" Africa's most important
mining event and the world's leading gathering of global policy makers and
international finance, the Mining INDABA has raised billions of dollars
and introduced the international investment community to mining interests
throughout Africa. The Mining Indaba has become an institution
throughout Africa, attracting over 2,000 delegates from fifty countries
and hosting over 100 exhibitors.
American Association of
Individual Investors Local Chapter Meetings:
|
|
November 29
|
New Jersey
|
John E. Deysher
President and Portfolio Manager, Pinnacle Value Fund
"What's New in Small-Cap Investing"
|
|
|
|
|
November 30
|
Long Island
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Lance Wallach, CLU, CHFC, CIMC
VEBA, Estate & Financial Planning Speaker
"How to Use Annuities and Insurance to Earn Positive Stock Market
Returns"
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December 1
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San Diego
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Kelley Wright
Editor, Investment Quality Trends
"Dividends Don’t Lie"
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December 5
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Denver
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Jon Jares, CFA
Co-Manager, Dreyfus Founders Balanced Fund
"Market Debate 2006: Which Way for Stocks?"
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December 7
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Connecticut
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Barbara Marcin
Portfolio Manager, The Gabelli Blue Chip Value Fund
"Dividends: Critical to Building Wealth"
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