______________________________________________________________________________
Issue No. 55 – December 5, 2005
Prescott, Arizona Systems@WiserTrader.com
______________________________________________________________________________
1.0
Trading
Resumption of the stock
advisory went well. This 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. This study will be used to set a level of
confidence in holding growth stocks for extended periods.
1.1 Growth Stocks
A group of 35 growth stocks
was screened from December 2004 data using a modified form of the Stephen
Cooper stock filter. The basic filter looks for optionable NASDAQ and NYSE
stocks having an EPS growth of 80%, a 26 week % rank relative strength of 90%
and within 5% of their 52 week highs. The minimum stock price for this study
was $4.
The S&P 500 gained
about 6.5% over the past year. Growth stocks that had actual gains (22 out of
35) comprised 62% of the group. The maximum gain was 226% and the maximum loss
was -60%. Overall the group had an average gain of 16.71% using no stop loss.
The optimum stop loss setting was -70%, where only 1 stock was stopped out in
the 6th month, resulting in an average gain of 17.1%.
To understand this behavior
one can look at the wavy shape of the S&P 500 over the past year. It had 4
successively higher highs with 2 intervening successively higher lows. Growth
stocks that declined at the lows eventually recovered and surpassed their
previous highs. For example, using a -25% stop loss, 26 of the 35 stocks would
have been stopped out after 5.1 months but the average number of months it took
stocks to reach their maximum values was 7.2 months. A -25% stop loss would
have resulted in a gain of only 4.7%.
We have seen similar, but
remarkably higher, gains for portfolios containing two groups of value stocks
studied recently that were screened based on 5 valuation metrics. The absolute
value filtered group had an average gain of 29.2% over the past year without a
stop loss. A total
© 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.
of 12 out of 14 stocks (85%) had
actual gains. Gains ranged from -42% to 137%. For this group a -35% stop loss
was optimum resulting in a gain of 31.9%. A -25% stop loss setting would have
reduced gains to 21%.
The industry relative
filtered group had an average gain of 29.8% over the past year without using a
stop loss. A total of 7 out of 9 stocks (78%) had actual gains. Gains ranged
from -37% to 114%. No stop loss setting was found that would have improved
results for the industry relative group. A stop loss setting of -25% would
have reduced gains to 13.9% for this group of value stocks over the past year.
These results were
surprising. Not only do they indicate that portfolios of the class of value
stocks discussed have outperformed portfolios of the class of growth stocks discussed
over the past year (29% gains versus 17% gains). It also implies that a wider
stop loss setting is justified for portfolios containing these classes of
stocks in a rising market. Of course, had the market been in an overall
decline over the past year, the results would have been very different. Until
the same study is repeated for a declining market, let’s agree not to hold long
positions for extended periods in a declining market.
1.2 OptionsXpress Autotrading
A number of options traders
have asked about autotrading WiserTrader.com Options Advisory alerts at
OptionsXpress. The way this works is the OptionsXpress customer service takes weekly
options alert recommendations and trades your account automatically according
to your prescribed size limits and guidelines. It’s a hands free way to trade
options and you don’t need to be an expert.
OptionsXpress provides
autotrading using a number of advisory services already based on customer requests.
If you wish to add the WiserTrader.com Options Advisory to the OptionsXpress
advisory list, it will be necessary for a sizeable number of account holders to
make such a request at the OptionsXpress web site from within their login
accounts.
The trading record of the WiserTrader.com
Options Advisory Service this year is summarized in Table 1 in terms of the
current account balance for an account starting with $3,000 on January 1, 2005.
Numbers in the table include brokerage fees of $9.99 per trade plus $1.25 per
contract and a monthly advisory fee of $60/month. The fees you actually pay
are probably lower. The average cost per options contract this year has been
$617.23.
Table 1
Starting with
$3,000 on 1/1/05 the Current Account Balance on 12/2/05 would be:
|
Contracts per Trade
|
1
|
2
|
3
|
4
|
|
Current Account Balance
|
$4,755
|
$8,409
|
$12,066
|
$15,720
|
|
% Profit
|
58.5%
|
180.3%
|
302.2%
|
424.0%
|
If this fits in with your trading
goals, ask your broker to add the WiserTrader.com Options Advisory Service to
their autotrading advisors list.
2.0 Market Analysis
The markets entered a mild
technical retracement this week and became a bit choppy after sizeable gains
over the past 4 weeks. An upward revision in third quarter GDP, moderation in
oil prices and a jump in consumer confidence left the market still in an upbeat
mood.
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
(inflation) 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
|
3.3%
|
-0.5%
|
1.5%
|
0.8%
|
1.5%
|
|
NASDAQ
|
4.8%
|
0.5%
|
1.6%
|
1.1%
|
1.5%
|
|
S & P 500
|
3.7%
|
-0.2%
|
1.6%
|
1.1%
|
1.2%
|
|
Russell 2000
|
4.9%
|
1.0%
|
1.7%
|
0.8%
|
1.3%
|
|
GLD, GOLD
|
10.6%
|
1.8%
|
2.0%
|
3.5%
|
2.8%
|
|
RKH, Banking
|
4.1%
|
-1.4%
|
2.4%
|
-0.6%
|
3.7%
|
|
IYT, Transportation
|
5.4%
|
-1.1%
|
0.8%
|
1.7%
|
3.8%
|
|
SMH, Semiconductors
|
10.3%
|
4.2%
|
2.7%
|
1.4%
|
2.0%
|
|
BBH, Biotechnology
|
3.6%
|
-1.2%
|
-0.3%
|
2.0%
|
2.3%
|
|
IYR, Real Estate
|
7.8%
|
-0.9%
|
2.5%
|
1.2%
|
4.4%
|
|
OIH, Oil
|
7.7%
|
1.6%
|
6.0%
|
4.9%
|
-4.7%
|
|
XLE,
Energy
|
3.3%
|
0.2%
|
4.0%
|
3.3%
|
-4.1%
|
|
XLU,
Utilities
|
2.2%
|
-0.9%
|
1.9%
|
1.7%
|
-0.8%
|
|
XLB,
Materials
|
8.2%
|
1.5%
|
1.4%
|
2.4%
|
2.7%
|
|
XLI,
Industrial
|
5.2%
|
0.2%
|
1.0%
|
2.5%
|
1.5%
|
|
XLK,
Technology
|
5.4%
|
0.9%
|
1.4%
|
1.9%
|
1.2%
|
|
XLV,
Healthcare
|
1.7%
|
-0.4%
|
0.0%
|
0.6%
|
1.4%
|
|
XLF,
Financials
|
4.9%
|
-1.3%
|
2.4%
|
0.3%
|
3.2%
|
|
XLP,
Consumer Staples
|
1.5%
|
-0.9%
|
1.3%
|
-0.4%
|
1.4%
|
|
XLY,
Consumer Discretionary
|
3.2%
|
-0.4%
|
1.5%
|
0.5%
|
1.4%
|
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
|
6.8%
|
-0.2%
|
6.7%
|
0.2%
|
4.3%
|
0.8%
|
1.2%
|
|
Cash Rich Companies
|
-0.3%
|
0.0%
|
0.6%
|
1.2%
|
0.5%
|
-0.1%
|
-0.8%
|
|
Growth Momentum Stocks
|
3.4%
|
0.9%
|
5.0%
|
1.4%
|
2.3%
|
3.3%
|
-1.9%
|
|
Lynch Stocks
|
9.7%
|
1.1%
|
7.3%
|
0.8%
|
2.5%
|
1.8%
|
2.0%
|
|
Buffett Stocks
|
22.5%
|
-0.3%
|
5.7%
|
1.8%
|
1.2%
|
1.5%
|
1.0%
|
|
Graham Stocks
|
21.0%
|
0.0%
|
6.8%
|
1.2%
|
2.4%
|
1.0%
|
2.2%
|
|
Templeton Stocks
|
11.2%
|
0.2%
|
3.6%
|
0.7%
|
2.5%
|
0.4%
|
-0.1%
|
|
Zweig Stocks
|
6.8%
|
-0.1%
|
3.2%
|
0.4%
|
0.6%
|
1.1%
|
1.1%
|
|
Average
|
15.1%
|
-0.2%
|
7.7%
|
0.3%
|
4.2%
|
2.3%
|
0.8%
|
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
|
|
REDE
|
12/02/05
|
0.0%
|
RedEnvelope,
Inc.
|
Services
|
Retail
(Catalog & Mail Order)
|
0.0%
|
-5.8%
|
-98
|
-77
|
|
MMLP
|
11/25/05
|
0.0%
|
Martin
Midstream Partners L.P.
|
Transportation
|
Water
Transportation
|
-3.4%
|
-1.7%
|
-57
|
-72
|
|
ULBI
|
12/02/05
|
0.0%
|
Ultralife
Batteries, Inc.
|
Technology
|
Electronic
Instruments & Controls
|
0.0%
|
-4.5%
|
-25
|
-69
|
|
ISO
|
10/07/05
|
32.1%
|
ISCO
International, Inc.
|
Technology
|
Semiconductors
|
-14.0%
|
-2.6%
|
-57
|
-67
|
|
TRMA
|
10/28/05
|
1.8%
|
Trico
Marine Services Inc
|
Energy
|
Oil Well
Services & Equipment
|
-4.2%
|
-1.7%
|
-89
|
-64
|
|
CRYO
|
11/25/05
|
0.0%
|
CryoCor,
Inc.
|
Health
Care
|
Medical
Equipment & Supplies
|
-5.3%
|
-5.3%
|
-62
|
-62
|
|
CLRT
|
11/18/05
|
4.9%
|
Clarient,
Inc.
|
Technology
|
Scientific
& Technical Instruments
|
-8.5%
|
-3.7%
|
-61
|
-61
|
|
XGEN
|
11/25/05
|
0.0%
|
Xenogen
Corporation
|
Technology
|
Scientific
& Technical Instruments
|
-6.2%
|
0.0%
|
-65
|
-56
|
|
MBRX
|
10/14/05
|
1.2%
|
Metabasis
Therapeutics, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
-12.0%
|
-1.2%
|
-61
|
-41
|
|
MTRX
|
10/14/05
|
7.0%
|
Matrix
Service Company
|
Capital
Goods
|
Construction
Services
|
-4.2%
|
5.6%
|
-37
|
-32
|
|
AUXL
|
12/02/05
|
0.0%
|
Auxilium
Pharmaceuticals, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
0.0%
|
14.3%
|
-25
|
-27
|
|
MEAD
|
09/30/05
|
2.3%
|
Meade
Instruments Corp.
|
Technology
|
Scientific
& Technical Instruments
|
-2.5%
|
1.1%
|
0
|
-26
|
|
PCTY
|
09/16/05
|
30.3%
|
Party City
Corporation
|
Services
|
Retail
(Specialty Non-Apparel)
|
-0.1%
|
0.5%
|
-3
|
-18
|
|
VSTA
|
10/21/05
|
8.6%
|
VistaCare,
Inc.
|
Health
Care
|
Healthcare
Facilities
|
-1.0%
|
2.2%
|
-4
|
-12
|
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
|
|
WSC
|
07/01/05
|
-0.7%
|
Wesco
Financial Corporation
|
Conglomerates
|
Conglomerates
|
-1.1%
|
-0.6%
|
-55
|
-50
|
|
KEYN
|
11/25/05
|
0.0%
|
Keynote
Systems, Inc.
|
Technology
|
Computer
Services
|
-0.6%
|
2.9%
|
-30
|
-37
|
Since the capital rich
companies table is normally sparse, Table 3D was added to contain companies
having a low price to free cash flow (P-FCF) less than 5. Companies having
P-FCF less than 10 are typically capable of financing the purchase of all their
outstanding shares of stock.
Table 3D - Price to Free Cash Flow
Companies Check List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
F
|
11/11/05
|
2.3%
|
FORD MOTOR
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
-4.5%
|
-2.0%
|
-47
|
-69
|
|
PCW
|
11/11/05
|
5.7%
|
PCCW Ltd.
(ADR)
|
Services
|
Communications
Services
|
-0.2%
|
0.8%
|
-50
|
-41
|
|
VTS
|
12/02/05
|
0.0%
|
Veritas
DGC Inc.
|
Energy
|
Oil Well
Services & Equipment
|
0.0%
|
-0.7%
|
-20
|
-35
|
|
PBR
|
11/25/05
|
6.4%
|
Petroleo
Brasileiro S.A. (ADR)
|
Energy
|
Oil &
Gas - Integrated
|
0.0%
|
6.4%
|
-3
|
-5
|
|
PLNR
|
11/25/05
|
2.4%
|
Planar
Systems, Inc.
|
Technology
|
Electronic
Instruments & Controls
|
0.0%
|
2.4%
|
-2
|
0
|
For the creen in
Table 3E, the number of selections is reduced by selecting only optionable
stocks having P/E’s less than 30.
Table 3E - Growth Momentum Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
HCC
|
10/21/05
|
11.8%
|
HCC
Insurance Holdings, Inc.
|
Financial
|
Insurance
(Property & Casualty)
|
-7.5%
|
-2.8%
|
-90
|
-92
|
|
LM
|
08/12/05
|
11.7%
|
Legg
Mason, Inc.
|
Financial
|
Investment
Services
|
-3.4%
|
-3.4%
|
-48
|
-66
|
|
BEN
|
11/04/05
|
3.9%
|
Franklin Resources
|
Financial
|
Investment
Services
|
-3.4%
|
-3.4%
|
-66
|
-66
|
|
ENDP
|
11/18/05
|
1.6%
|
Endo
Pharmaceuticals
|
Health
Care
|
Biotechnology
& Drugs
|
-3.4%
|
-1.1%
|
-32
|
-56
|
|
CTX
|
11/18/05
|
0.1%
|
Centex
Corporation
|
Capital
Goods
|
Construction
Services
|
-2.9%
|
-2.4%
|
-55
|
-55
|
|
ADTN
|
11/25/05
|
0.0%
|
ADTRAN,
Inc.
|
Technology
|
Communications
Equipment
|
-2.1%
|
-2.1%
|
-20
|
-40
|
|
VTIV
|
11/11/05
|
-1.8%
|
Ventiv
Health, Inc.
|
Services
|
Business
Services
|
-3.6%
|
0.4%
|
-96
|
-24
|
|
AMTD
|
10/28/05
|
16.4%
|
Ameritrade
Holding Corp.
|
Financial
|
Investment
Services
|
-0.4%
|
-0.2%
|
-33
|
-23
|
|
BHP
|
09/09/05
|
4.7%
|
BHP
Billiton Limited (ADR)
|
Basic
Materials
|
Metal
Mining
|
-3.5%
|
1.0%
|
-24
|
-18
|
|
CHE
|
05/06/05
|
32.3%
|
Chemed
Corporation
|
Services
|
Business
Services
|
0.0%
|
0.3%
|
-15
|
-16
|
|
ET
|
10/21/05
|
12.0%
|
E*TRADE
FINANCIAL Corporation
|
Financial
|
Investment
Services
|
0.0%
|
2.8%
|
-16
|
-12
|
|
WSO
|
11/25/05
|
4.9%
|
Watsco,
Incorporated
|
Capital
Goods
|
Misc.
Capital Goods
|
0.0%
|
4.9%
|
-19
|
-11
|
|
PCU
|
12/02/05
|
0.0%
|
Southern
Copper Corporation (USA)
|
Basic
Materials
|
Metal
Mining
|
0.0%
|
7.5%
|
-6
|
-11
|
|
BJS
|
11/04/05
|
12.2%
|
BJ
Services Company
|
Energy
|
Oil Well
Services & Equipment
|
0.0%
|
4.2%
|
-1
|
-10
|
|
SYT
|
04/08/05
|
6.6%
|
Syngenta
AG (ADR)
|
Basic
Materials
|
Chemical
Manufacturing
|
0.0%
|
3.7%
|
-1
|
-5
|
|
UNH
|
04/15/05
|
32.9%
|
UnitedHealth
Group Inc.
|
Financial
|
Insurance
(Accident & Health)
|
0.0%
|
3.0%
|
-6
|
-5
|
|
OSK
|
03/12/05
|
14.8%
|
Oshkosh
Truck Corporation
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
0.0%
|
1.5%
|
-3
|
0
|
For the Peter Lynch screen
in Table 3F, the number of selections is reduced by selecting only optionable
stocks having P/E’s less than 30.
Table 3F - Peter Lynch Value Watch
List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
TM
|
12/13/04
|
30.4%
|
Toyota
Motor Corporation (ADR)
|
Consumer
Cyclical
|
Auto &
Truck Manufacturers
|
-3.0%
|
-0.5%
|
-32
|
-74
|
|
BTI
|
08/12/05
|
9.8%
|
British
American Tobacco (ADR)
|
Consumer
Non-Cyclical
|
Tobacco
|
-4.6%
|
1.4%
|
-69
|
-53
|
|
SKM
|
02/07/05
|
4.0%
|
SK Telecom
Co., Ltd. (ADR)
|
Services
|
Communications
Services
|
-9.4%
|
3.0%
|
-2
|
-40
|
|
KOF
|
04/29/05
|
13.3%
|
Coca-Cola
FEMSA, S.A. (ADR)
|
Consumer
Non-Cyclical
|
Beverages
(Non-Alcoholic)
|
-9.7%
|
2.2%
|
-4
|
-18
|
|
TMX
|
06/03/05
|
25.5%
|
Telefonos
de Mexico, S.A. (ADR)
|
Services
|
Communications
Services
|
-0.4%
|
0.0%
|
-28
|
-16
|
|
CHL
|
03/18/05
|
51.7%
|
China Mobile (Hong Kong) Limited (ADR)
|
Services
|
Communications
Services
|
0.0%
|
4.7%
|
-2
|
-8
|
The filter for Warren
Buffet style stock picking in Table 3G 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 3G - Warren Buffett Value Watch
List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
HDI
|
10/14/05
|
9.6%
|
Harley-Davidson,
Inc.
|
Consumer
Cyclical
|
Recreational
Products
|
-3.4%
|
-2.2%
|
-59
|
-75
|
|
FOSL
|
12/02/05
|
0.0%
|
Fossil,
Inc.
|
Consumer
Cyclical
|
Jewelry
& Silverware
|
0.0%
|
-2.5%
|
-39
|
-61
|
|
ABFS
|
04/29/05
|
30.7%
|
Arkansas
Best Corporation
|
Transportation
|
Trucking
|
-3.2%
|
-1.5%
|
-52
|
-59
|
|
EASI
|
09/09/05
|
19.8%
|
Engineered
Support System
|
Capital
Goods
|
Misc.
Capital Goods
|
-2.2%
|
1.4%
|
-39
|
-38
|
|
DHI
|
10/21/05
|
17.8%
|
D.R.
Horton Inc.
|
Capital
Goods
|
Construction
Services
|
-1.0%
|
-0.3%
|
-31
|
-35
|
|
FNF
|
10/21/05
|
4.9%
|
Fidelity
National Financial
|
Financial
|
Insurance
(Property & Casualty)
|
-3.0%
|
1.3%
|
-41
|
-32
|
|
LNCR
|
12/27/04
|
4.5%
|
Lincare
Holdings Inc.
|
Health
Care
|
Healthcare
Facilities
|
-4.3%
|
-0.2%
|
-29
|
-29
|
|
NKE
|
09/23/05
|
7.8%
|
NIKE, Inc.
|
Consumer
Cyclical
|
Footwear
|
-0.7%
|
-0.7%
|
-85
|
-27
|
|
ASH
|
10/28/05
|
7.0%
|
Ashland
Inc.
|
Capital
Goods
|
Construction
Services
|
-1.0%
|
1.1%
|
-3
|
-23
|
|
ACS
|
04/29/05
|
18.3%
|
Affiliated
Computer Services, Inc.
|
Technology
|
Computer
Services
|
-0.5%
|
1.6%
|
-18
|
-21
|
|
RS
|
04/15/05
|
72.0%
|
Reliance
Steel & Aluminum
|
Basic
Materials
|
Misc.
Fabricated Products
|
-1.0%
|
1.7%
|
-2
|
-19
|
|
NUE
|
04/15/05
|
39.5%
|
Nucor
Corporation
|
Basic
Materials
|
Iron &
Steel
|
-1.0%
|
3.3%
|
-7
|
-18
|
|
PGR
|
12/27/04
|
46.9%
|
The
Progressive Corp.
|
Financial
|
Insurance
(Property & Casualty)
|
-0.1%
|
2.0%
|
-9
|
-18
|
|
MIK
|
10/14/05
|
21.5%
|
Michaels
Stores, Inc.
|
Services
|
Retail
(Specialty Non-Apparel)
|
-1.9%
|
-1.9%
|
-17
|
-17
|
|
DSPG
|
02/07/05
|
8.4%
|
DSP Group,
Inc.
|
Technology
|
Communications
Equipment
|
0.0%
|
3.0%
|
-17
|
-14
|
|
RCII
|
10/21/05
|
23.8%
|
Rent-A-Center,
Inc
|
Services
|
Rental
& Leasing
|
0.0%
|
2.6%
|
-2
|
-13
|
|
CECO
|
09/30/05
|
8.1%
|
Career
Education Corp.
|
Services
|
Schools
|
-0.1%
|
4.5%
|
-8
|
-11
|
|
THO
|
04/15/05
|
43.6%
|
Thor
Industries, Inc.
|
Capital
Goods
|
Mobile
Homes & RVs
|
-1.0%
|
8.3%
|
-2
|
-10
|
|
RI
|
09/02/05
|
14.5%
|
Ruby
Tuesday, Inc.
|
Services
|
Restaurants
|
0.0%
|
0.7%
|
-15
|
-8
|
Stocks from Benjamin
Graham’s style of utility investing are listed in Table 3H. A requirement was
added to include only those stocks having a PE of 17 or less.
Table 3H - Benjamin Graham Utility
Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
PNW
|
01/10/05
|
-3.5%
|
Pinnacle West
Capital
|
Utilities
|
Electric
Utilities
|
-10.3%
|
-0.7%
|
-21
|
-76
|
|
PGN
|
01/10/05
|
1.0%
|
Progress
Energy, Inc.
|
Utilities
|
Electric
Utilities
|
-2.7%
|
-1.2%
|
-41
|
-75
|
|
OKE
|
11/11/05
|
2.9%
|
ONEOK,
Inc.
|
Utilities
|
Natural
Gas Utilities
|
-1.4%
|
-1.2%
|
-42
|
-65
|
|
KEP
|
01/10/05
|
35.0%
|
Korea
Electric Power Corporation (ADR)
|
Utilities
|
Electric
Utilities
|
-9.0%
|
-0.3%
|
-4
|
-57
|
|
ATO
|
04/01/05
|
-0.5%
|
Atmos
Energy Corporation
|
Utilities
|
Natural
Gas Utilities
|
-10.0%
|
-1.2%
|
-36
|
-55
|
|
UU
|
06/10/05
|
-4.5%
|
United
Utilities PLC (ADR)
|
Utilities
|
Electric
Utilities
|
-6.7%
|
-0.6%
|
-55
|
-45
|
|
ATG
|
10/21/05
|
8.5%
|
AGL
Resources Inc.
|
Utilities
|
Natural
Gas Utilities
|
-1.2%
|
-0.3%
|
-38
|
-26
|
|
SRE
|
01/10/05
|
23.2%
|
Sempra
Energy
|
Utilities
|
Natural
Gas Utilities
|
-6.2%
|
2.4%
|
-23
|
-14
|
|
WPS
|
02/07/05
|
6.9%
|
WPS
Resources Corp
|
Utilities
|
Electric Utilities
|
-7.5%
|
1.9%
|
-4
|
-7
|
|
CPK
|
05/06/05
|
20.1%
|
Chesapeake Utilities
|
Utilities
|
Natural
Gas Utilities
|
-11.2%
|
0.7%
|
-68
|
0
|
|
CV
|
10/14/05
|
34.3%
|
Central
Vermont Public Services Corp.
|
Utilities
|
Electric
Utilities
|
0.0%
|
8.0%
|
-2
|
0
|
Optionable stocks from John Templeton’s style of
investing are listed in Table 3I.
Table 3I - John Templeton Watch
List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
JNJ
|
05/27/05
|
-9.2%
|
Johnson
& Johnson
|
Health
Care
|
Major
Drugs
|
-9.2%
|
-1.5%
|
-79
|
-97
|
|
AMSG
|
10/14/05
|
-3.7%
|
AmSurg
Corp.
|
Health
Care
|
Healthcare
Facilities
|
-9.0%
|
-6.7%
|
-97
|
-93
|
|
MTB
|
05/27/05
|
6.6%
|
M&T
Bank Corporation
|
Financial
|
Regional
Banks
|
-2.1%
|
-0.9%
|
-57
|
-54
|
|
SNV
|
05/27/05
|
-3.5%
|
Synovus
Financial Corp.
|
Financial
|
Regional
Banks
|
-5.7%
|
-0.3%
|
-47
|
-49
|
|
SFG
|
05/27/05
|
40.0%
|
StanCorp
Financial Group, Inc.
|
Financial
|
Insurance
(Life)
|
-0.8%
|
-0.4%
|
-11
|
-39
|
|
EASI
|
06/03/05
|
14.9%
|
Engineered
Support System
|
Capital
Goods
|
Misc.
Capital Goods
|
-2.2%
|
1.4%
|
-39
|
-38
|
|
CPS
|
05/27/05
|
8.2%
|
ChoicePoint
Inc.
|
Services
|
Business
Services
|
-0.8%
|
-0.4%
|
-12
|
-31
|
|
CAKE
|
10/21/05
|
8.0%
|
The
Cheesecake Factory Incorporated
|
Services
|
Restaurants
|
-0.2%
|
4.4%
|
-21
|
-24
|
|
KRON
|
10/28/05
|
8.3%
|
Kronos
Incorporated
|
Technology
|
Software
& Programming
|
-0.8%
|
2.4%
|
-22
|
-22
|
|
CHD
|
11/18/05
|
0.4%
|
Church
& Dwight Co., Inc.
|
Consumer
Non-Cyclical
|
Personal
& Household Products
|
0.0%
|
1.4%
|
-40
|
-20
|
|
DGX
|
08/19/05
|
1.6%
|
Quest
Diagnostics Incorporated
|
Health
Care
|
Healthcare
Facilities
|
-1.4%
|
0.8%
|
-4
|
-16
|
|
WSM
|
09/02/05
|
16.6%
|
Williams-Sonoma,
Inc.
|
Services
|
Retail (
Non-Apparel)
|
0.0%
|
0.9%
|
0
|
-16
|
|
HHS
|
10/28/05
|
4.8%
|
Harte-Hanks,
Inc.
|
Services
|
Printing
& Publishing
|
0.0%
|
2.9%
|
-41
|
-15
|
|
LOW
|
11/18/05
|
2.9%
|
Lowe's
Companies, Inc.
|
Services
|
Retail
(Home Improvement)
|
0.0%
|
1.6%
|
-4
|
-6
|
Optionable stocks from
Martin Zweig’s style of investing are listed in Table 3J.
Table 3J
Martin Zweig Watch List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
Weekly % Gain
|
%R1
|
%R2
|
|
CRDN
|
08/19/05
|
44.2%
|
Ceradyne,
Inc.
|
Capital
Goods
|
Aerospace
and Defense
|
-7.2%
|
-2.8%
|
-13
|
-81
|
|
BEN
|
10/28/05
|
9.4%
|
Franklin Resources
|
Financial
|
Investment
Services
|
-3.4%
|
-3.4%
|
-66
|
-66
|
|
ZIGO
|
11/11/05
|
-7.1%
|
Zygo
Corporation
|
Technology
|
Semiconductors
|
-7.1%
|
-2.1%
|
-20
|
-59
|
|
CTX
|
10/28/05
|
16.4%
|
Centex
Corporation
|
Capital
Goods
|
Construction
Services
|
-2.9%
|
-2.4%
|
-55
|
-55
|
|
COP
|
10/28/05
|
-1.4%
|
ConocoPhillips
|
Energy
|
Oil &
Gas - Integrated
|
-8.5%
|
-2.5%
|
-42
|
-54
|
|
POOL
|
06/10/05
|
14.0%
|
SCP Pool
Corporation
|
Consumer
Cyclical
|
Recreational
Products
|
-1.9%
|
-1.9%
|
-51
|
-39
|
|
DHI
|
11/18/05
|
4.9%
|
D.R.
Horton Inc.
|
Capital
Goods
|
Construction
Services
|
-1.0%
|
-0.3%
|
-31
|
-35
|
|
ESI
|
11/04/05
|
4.3%
|
ITT
Educational Services
|
Services
|
Schools
|
-1.2%
|
1.0%
|
-34
|
-30
|
|
SFY
|
10/14/05
|
13.6%
|
Swift
Energy Company
|
Energy
|
Oil &
Gas Operations
|
-0.9%
|
-0.1%
|
-25
|
-30
|
|
CERS
|
11/18/05
|
20.2%
|
Cerus
Corporation
|
Health
Care
|
Biotechnology
& Drugs
|
-2.2%
|
0.6%
|
-12
|
-27
|
|
MCO
|
07/29/05
|
27.1%
|
Moody's
Corporation
|
Services
|
Business
Services
|
-0.5%
|
1.4%
|
-14
|
-25
|
|
CMTL
|
07/01/05
|
35.6%
|
Comtech
Telecomm. Corp.
|
Technology
|
Communications
Equipment
|
-1.2%
|
1.5%
|
-6
|
-21
|
|
BR
|
12/02/05
|
0.0%
|
Burlington
Resources Inc.
|
Energy
|
Oil &
Gas Operations
|
0.0%
|
1.6%
|
-9
|
-12
|
|
SM
|
10/21/05
|
18.1%
|
St. Mary
Land & Exploration Co.
|
Energy
|
Oil &
Gas Operations
|
0.0%
|
0.9%
|
-25
|
-8
|
|
CDIS
|
11/04/05
|
15.1%
|
Cal Dive
International, Inc.
|
Energy
|
Oil Well
Services & Equipment
|
0.0%
|
1.2%
|
-3
|
-8
|
|
SUN
|
11/04/05
|
13.7%
|
Sunoco,
Inc.
|
Energy
|
Oil &
Gas Operations
|
0.0%
|
3.0%
|
-7
|
-4
|
|
EXP
|
10/28/05
|
17.1%
|
Eagle
Materials, Inc.
|
Capital
Goods
|
Construction
- Raw Materials
|
0.0%
|
5.7%
|
0
|
-3
|
|
CAE
|
06/10/05
|
25.5%
|
Cascade
Corporation
|
Capital
Goods
|
Misc.
Capital Goods
|
0.0%
|
3.3%
|
-7
|
-1
|
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 =
|
71
|
71
|
71
|
(1.4 trades per week)
|
|
Number of contracts per trade =
|
1
|
2
|
3
|
|
|
Avg. Premium Cost per trade =
|
$617.23
|
$1,234.45
|
$1,851.68
|
|
|
Total Premiums =
|
$43,823.00
|
$87,646.00
|
$131,469.00
|
|
|
Gross Profit =
|
$4,002.02
|
$8,004.05
|
$12,006.07
|
(9.6%)
|
|
Broker Commission (Etrade) =
|
-$1,596.08
|
-$1,773.58
|
-$1,951.08
|
|
|
Subscription Cost to date =
|
-$720.00
|
-$720.00
|
-$720.00
|
|
|
Net Profit After Expenses =
|
$1,685.94
|
$5,510.47
|
$9,334.99
|
(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
|
+ 90.2%
+ 66.6%
+ 45.1%
|
|
Major Indices Year to Date
12/03/05
|
|
DOW
|
+0.9%
|
|
NASDAQ
|
+4.5%
|
|
S&P500
|
+4.4%
|
|
Russell
2000
|
+5.9%
|
|
|
|
|
|
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It is not a short
term trading system although it can be applied to "low priced"
stocks and performs very well in the short-term.
It is a long-term
trading system based more on money management than anything else. As such it
lends itself to long term holdings in blue chip companies and is PERFECT for trading index funds,
Ishares, sector funds, gold or any price traded equity that cannot go to
zero.
That's all for now. Check it out today.
Would you like
to get the buy and sell signals well in advance of the trading opportunities?
PCA is the way.
The Position Cost Averaging
Stock Investing System Is...
Guaranteed To
Buy Low & Sell High
Every Time!
Buy One Now For Yourself...
&
Give One As A Gift Free!
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Appendix - Investment Conference
Schedule
Below are links to
conference registration sites where you can sign up.
- 01-30-06 Miami, Florida <
