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."

I love going to trade shows. I have a lot of fun working with the crowds surrounding our booth. I shock them by saying they can become stock market wizards in just a few minutes. Typically, nobody says a word, but their eyes get larger. Then I ask if someone would like to give me a stock to analyze.

Given the name or ticker symbol of the stock, I find it in Stock Viewer. Stock Viewer is a daunting screen for most people, so I carefully begin to explain the column headings, going from left to right. The first critical moment comes when we compare Price to Value. Most of the audience has never seen a stock's intrinsic value before, so I quickly explain what it is and why it's important to know.

Next, I go on to explain RV, RS and RT. I ask my listeners not to worry...all they need to know at this point is that a number above 1.00 is good and a number less than 1.00 is bad. Besides, all of these terms are explained in our Stock Analysis reports, which I show them. Finally, VST ties it all together, the higher the better!

Next, we look at the Comfort Index, CI. (In my computer I have CI placed right beside VST.) I use CI to describe what the stock's price performance has been like for the past year. It blows their minds when they see a graph showing exactly what I described. I explain that we prefer to own stocks with smooth patterns of rising prices, as reflected by high CI values, instead of stocks with wild, up and down price patterns and low CI's. I believe a stock's price pattern is like its DNA...its past behavior reveals what you should expect in the future. Once my listeners learn this bit of wisdom, they are well on their way to knowing how to pick winners from losers.

Finally, we take a test with another stock. Is Price above or below Value? Is the long-term price appreciation potential favorable or unfavorable? Does the company have a consistent, predictable financial track record? Is the stock's price trending higher or lower? Is the stock rated a Buy, Sell or Hold? As we answer these questions, the crowd begins to realize that they can learn a whole lot about a stock in just a matter of a few seconds...even if they had never heard of it before. They have become Stock Market Wizards.

VECTORVEST 101.
Mr. Steve Chappell gives us an elegant "Strategy of the Week" presentation this week which is remarkable for its simplicity and power. Everyone should see it. Visit the VectorVest University to see "VectorVest 101."