strategic investing

Strategic Investing

Sacramento/El MaceroSeptember 13, 2011

2

DisclaimerThe content of this presentation is for the edification of the audience and has not been endorsed, nor approved of, by any of the persons, companies, nor websites mentioned herein, or during the course of this presentation.

The author and/or speaker has attempted to verify all information but does not take any responsibility for any action which a member of any audience (both in person or in a subsequent venue) makes of the information which is presented herein.

Results obtained in prior years are no guarantee of results either this year or in the future.

You and you alone are responsible for any decisions you make based upon the information obtained during the course of this presentation.

Stephen Cole.

3

Acknowledgements• We gratefully acknowledge the data provided by various sources in this

presentation and have identified on each chart the source from which the charts were obtained, including Tom Ellis and Fred Richards.

• Special thanks to StockCharts®, Investors Business Daily®, MarketSmith®, High Growth Stocks®, Market News International® and Haver Analytics®.

• Current Agriculture data courtesy of ProFarmer®.

4

5

MarketSmith Weekly Chart

6

MarketSmith Daily Chart

7

8

9

10

2 Ways to prospect using MarketSmith

• IBD 50

• IBD 85/85

11

Strategic Investing Filters

Conservative Aggressive• Acc/Dist = A• EPS >= 90• RS >=90• EPS + RS >= 190• Composite Rating >=

90• Price >= $6• Volume > 100,000• Top 50 Industry

Groups

• Acc/Dist >= B• EPS >= 85• RS >= 85• EPS + RS >= 180• Composite Rating >=

80• Price >= $10• Volume > 1,000,000• Top 100 Industry

Groups

12

13

IBD 50• IBD 50• Select column list you have created• Export to Excel• Copy to template, save as IBD50 2011 9 2• Sort on ROE>15%• Eliminate <15%• Eliminate <300,000 ADV and <$15/share• Save as I50 ROE 15 300• Sort on ROEPTM and eliminate those<25%• Save as I50 ROE15ROEPTM25• Sort on accel 2 qtrs• Insert row so accel 2 qtrs are separate• Save as I50 ROE 15 acel 2 q• Sort on remaining, on EPS last quarter• Eliminate those <25%• Delete blank row and save as I50 ROE 15-30 accel 2 qtrs EPS 25

14

IBD 50• Sort on symbol (to get alpha listing)• Save • Copy symbols only back to MarketSmith in new list,

such as 9 2 Watch (select Friday before)• Go through MarketSmith list and annotate, such as

with base count.• When you come across first stock you’re willing to

buy, annotate with Buy Point (BP), save that stock to new list, such as BuyWatch 8 5.

• Create alert from all stocks in BuyWatch with the buy point, in your brokerage trading program

15

85/85 Modified• Run the Screen• Found 41 stocks• Export to Excel• Calculate EPS + RS• Eliminate stocks <

180

16

85/85 Modified

• Similar procedure to IBD 50 but using 85/85.• Sort on EPS+RS and eliminate <180• Sort on symbol• Copy to new MarketSmith list such as Watch 85 8-

5-11• Same procedure as IBD 50.

17

Next Step?Note IBD or eIBD Market Pulse

Consult your Buy Rules