by Dr. Bart DiLiddo
Friday, 07/31/2009
As noted last week, we went long in the Yellow Brick Road portfolio on Thursday, July 23rd, with selections from the "Explosive GRT & EPS Stocks" Strategy. It was a short, bumpy ride...we were back in cash within a week.
The portfolio soared 10.8% on Thursday, rose another 6.3% on Friday and skyrocketed 15.9% on Monday of this week. Then it plunged 11.8% as we sold nine stocks on Tuesday, either to take profits or to stop losses. We sold our last position on Wednesday with another loss of 1.4%. Overall the campaign ended with a net gain of 19.8% in five days, which is not bad at all. But I didn't like it. This is not what the YBR is all about.
The Yellow Brick Road strategy was envisioned to be one that could help Prudent investors make money in both up and down markets. It was meant to be easy to use, not demand a lot of time and could be done at night when the market is closed. Unfortunately, it appears that thousands of investors jumped into the market and bought stocks from the strategy I had selected to use. This is OK if you have learned how to anticipate what I'm going to do and didn't get caught in a traffic jam, but you're not going to get the best results if you wait to see what I did. The outstanding performance of the Explosive GRT & EPS Stocks as shown in the VectorVest RealTime Derby on Monday gave evidence that our subscribers were moving the market in these stocks.
To mitigate this problem in future YBR campaigns, I will use only strategies that specify the selection of stocks with Price > $10.00 per share and AvgVol > 1,000,000 shares per day. As a point of reference, the top 10 stocks from the Explosive GRT & EPS Strategy that we used last week, had an average price of $1.89 per share and an AvgVol of 621,090 shares per day. Even though I will be making this adjustment, it doesn't mean that you shouldn't feel free to use any strategy you wish in your next campaign with The Yellow Brick Road Portfolio.
RISING CI STEALTH STOCKS.
The Comfort Index, CI, is one of our most intriguing indicators. It was first introduced to our users on November 8, 2002 and was said to be a measure of the long-term price stability of a stock. Over the last seven years we have had an opportunity to watch its performance in both good times and bad. When the market is bullish, the Comfort Index of the best performing stocks climbs higher and higher and approaches 2.00 on a scale of 0 to 2.00. When the market is bearish, the Comfort Index of all but the strongest stocks tends to go lower.
A great way to buy good stocks at low prices is to find stocks that are flying beneath the radar, but whose Comfort Index has begun a steady rise from a bottom. I've done this in a variety of ways and today we are introducing an excellent new strategy that does just that. It's called, "Rising CI Stealth Stocks."
