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by Doug GerlachPresident, ICLUBcentral Inc.
April 2011
} This presentation was given April 5, 2011 as part of the Toolkit 6 User Group Webinar.◦ Free monthly webinar presented by Doug Gerlach of
ICLUBcentral for all Toolkit 6 users.◦ For information, visit:
http://www.iclub.com/clubs/webinar_information.asp} View archived video of this presentation at:
http://www.iclub.com/webinars/webinar_tk6.asp
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} Maintain optimal levels of risk and reward.} Sell stocks of companies with declining
fundamentals.◦ Protect portfolio from damage done by poorly
performing companies.} Sell stocks that are overvalued or that don’t
provide necessary returns.◦ Pro-actively remove companies with limited upside.
} The Portfolio Evaluation Review Technique (PERT) Report: key tool provided by BetterInvesting to track portfolio fundamentals.◦ a.k.a. “Portfolio Review Report” in Toolkit 6.
} Enhanced in Toolkit with shading, colored alerts.
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} PERT-A Worksheet (a.k.a. Quarterly Trend Analysis).
} Intended to help see small trends in company performance before they become big problems.
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} Offense & Defense strategies are foundation of portfolio tools.
} Portfolio Overview & Alerts replace PERT-A Worksheet and PERT Report.
} Allow you to focus on 2 critical tasks:1. Sell fundamentally underperforming stocks.2. Sell overvalued stocks.
} Reports still available for more detail & analysis.
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} “Rule of 5” -- 1 out of 5 stocks will underperform your expectations.
} Occasionally due to unpredictable circumstances.
} More often due to fundamental problems.} Defense is protecting portfolio from damage
from that 1 in 5 stock with fundamental problems.
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} Offense is proactively improving performance of your portfolio by replacing fine but overpriced companies.
} Relates strictly to stock's price.} Overvalued stocks can no longer produce
desirable return in future.
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} Always update data and prices before evaluating portfolio:◦ Click Update Data and Update Prices from Home
Page.◦ Or update each company manually.
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} Items highlighted in red require attention.
} Double-click to begin working with a portfolio.
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Double-click portfolio to display Overview
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Click Alerts button from Overview to display.
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} Choose “Trailing 12 Mos.” data (see trend).} Highlight stock & click “Check Trends” to
launch Quarterly Trends Graph.} Mark “Sell” or “Hold” as appropriate.
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} Compare:◦ % change for Sales, PTP, and EPS.◦ More analysis if growth doesn't meet expectations.
} Analyze:◦ Determine if marked trends exist.◦ Refine list of sale candidates.
} Decide:◦ Use online research to determine reasons for failure.◦ Sell ASAP stocks with low prospects for strong, steady
growth.
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} Click “Thresholds” to change alert values.} Click “Challenge” to launch Challenger.} Mark “Sell” or “Hold” as appropriate.
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} Check Risk and Reward:◦ Select companies whose RV, Rwd/Rsk Ratio, and TR
indicate they are overpriced.} Reevaluate:
◦ Review SSG for each, making sure that EPS growth and forecast high PEs are reasonable.
} Challenge:◦ Replace companies whose return and risk remain
unsatisfactory with companies of equal/better quality & better potential returns.
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} Set Challenge Parameters:
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