After attending the Las Vegas MoneyShow for more than 15 years, this was our best experience, by a long shot. The mood and sentiment of the attendees was upbeat and the feeling of confidence was back in the air. It was so nice to have so many satisfied customers visit our booths, hear our presentations and come to our reception.

The success stories I heard were most gratifying. Several customers told me how they got out of the market when we warned of the long bear market on November 2, 2007, and many others were raving about their gains since the March 9th bottom. One gentleman showed me a "real money" portfolio that was up 187%. Another showed me a portfolio that was up 242%. Still another said he bought Jail Break options on our C/Up signal in March, and he's up 525%.

A relatively new customer said, "VectorVest saved his life." He lost his job last December and began trading silver and gold futures to make some money, but he was losing his shirt. Then he discovered VectorVest and put Jail Break to work when we nailed the bottom. He gave his testimonial before 450 people at one of my presentations and showed everyone an equity chart of his portfolio which was going at a 45 degree angle. Do we appreciate this kind of feedback? You bet we do, and we gratefully say Thank You From Las Vegas.

PARADOX OF THE PEAKS.
Mr. Warren Buffett said it best, "The time to be fearful is when everyone is greedy and the time to be greedy is when everyone is fearful." Intuition, however, tells us to do just the opposite--we like to buy stocks when the market is soaring and back-off when the market is falling. Indeed, VectorVest advocates buying rising stocks in rising markets and selling falling stocks in falling markets. So who's right, Mr. Buffett or Mr. VectorVest?

Both: Mr. Buffett likes to buy stocks at bargain prices and he knows that stocks are at low prices when the market is at five-year lows. Mr. VectorVest also likes to buy stocks at bargain prices and he knows that stocks are at low prices when his Market Timing indicators are exceptionally low. In both cases, people are fearful when the market is low. Indeed, the Investor's Intelligence Indicator of Investment Advisors Sentiment hit an all-time low of 21.3% Bullish Advisors on October 31, 2008. (Please see the Investment Climate Graph.) The trick to making this approach to bargain hunting work, however, is to know when the market has stopped going down. Mr. Buffett makes no claims in this regard. Mr. VectorVest has done it time after time.

Currently, the market has risen dramatically from the March 9th bottom and Mr. VectorVest has become more fearful as the Price of the VectorVest Composite has gone higher and higher. Many of our Users have noted that our key Market Timing Indicators had risen to extremely high levels, thereby suggesting Bullish conditions. Inexperienced Users may have believed that was a good time to be greedy, but it was not. It was a time to become fearful. That's the lesson of the Paradox of the Peaks.

How would you like to pick stocks like Mr. Warren Buffett does? You're not alone. USA TODAY featured a cover story yesterday on 47 books with Mr. Buffett's name in their titles. I'm happy to say I ingested Mary Buffett's excellent book, Buffettology, many years ago.

Here's what I wrote on February 6, 1998: "Want to know how Warren Buffett turned $37,000 into $20 billion? Read Mary Buffett's book, Buffettology. Want to know how VectorVest really works? Read Mary Buffett's book, Buffettology."

Yes, the similarities between the VectorVest system of stock analysis and Mr. Buffett's methodology are striking. But it's not a coincidence. Both seek to identify safe, undervalued stocks. Both are based upon the valuation fundamentals of Graham and Dodd. Both employ the comparison of earnings yield to interest yield and both favor stocks of companies with consistent, predictable earnings growth. When Prudent Investors buy high Relative Value, high Relative Safety stocks, they are using VectorVest to implement the concepts of "Buffettology."

With the famous words of Mr. Buffett, "To be fearful when others are greedy and greedy when others are fearful," still ringing in my ears, how can I build a stock portfolio that would make Mr. Buffett proud and still not read all 47 books? Simple, I'll just create a VectorVest search to find all the stocks in our database having RV > 1.00 and RS > 1.00 and sort them by RV*RS*GRT*MC Desc. I'll call it the "Best of the Biggies."

As of yesterday, 10/23/08, this search found 474 stocks with mighty Exxon Mobil ranked at the top. I also saw names like Microsoft, Apple and Google high on the list. But seven out of the top 10 stocks were in the Petroleum Business Sector. While these are all great companies, I still want to pick stocks Warren would love and I also want to diversify my selections. What should I do?

I know, I'll use Portfolio Manager. It will allow me to limit how many stocks I get from any single Business Sector or Industry Group and it will also allow me to sort and rank them however I want. A complete click-by-click procedure of how to create a 100 stock portfolio using the "Best of the Biggies" search is presented in the Strategy section, shown below. The portfolio is called "Blue Chip Bargains" because the RV and RS criterion assures me that all of these stocks are undervalued and have above average financial track records.

The "WatchList View" feature within Portfolio Manager allows me to analyze, sort, screen and rank all 100 stocks however I want. First, I'll sort them alphabetically just to see what I have. Wow, what a list of great names, starting with ABB Ltd., at the top and finishing with Westpac Banking. Some of the more familiar names include Anheuser Busch, Caterpillar, Hewlett-Packard and Lockheed Martin. Some of the less familiar names include Alcon, Danaher, Hologic and Sasol.

Next I'll rank these 100 stocks by VST-Vector Desc. This indicator brings the stocks with the best combination of Value, Safety and Timing to the top of this list. Guess what? Mighty Exxon Mobil is ranked highest with a VST of 1.24 and it has an "H" recommendation. The stock with the lowest VST, 0.92, is Google with an "S" rating. I wouldn't worry about the "S" rating at this point because we're bottom-fishing and just about all of these stocks have an "S" rating. To be sure, Google should have been sold last January when VectorVest gave it an "S" rating at $617 per share.

One more thing I like to do is sort by YSG-Vector, i.e., Dividend Yield, Safety, Growth Vector. I see that Banco Sandantar and PetroBras are at the top of the list with juicy dividend yields of 9.93% and 7.35%, respectively. If you think that's good, read my essay of August 29, 2008 on how you can double or triple your cash income on these stocks even if their prices go nowhere.

The next thing I would do is look at a five-year graph of each of these stocks, taking special note of those with the smoothest, most consistent earnings (EPS) patterns. Take a look at Alcon, ACL, for example. Yes I know it got killed yesterday, but this company knows how to make money. Also look at Schlumberger, truly a great company. It, too, has gotten killed. My oh my, just look at the great stocks in this list, selling at bargain basement prices.

OK, so how would I go about building a portfolio from this list of stocks? I'll re-read my "Guide to Worry-Free Investing." It says to: (1) Buy high VST-Vector "B" rated stocks, (2) Diversify in What and When you buy, and (3) Use Stop-Sell Prices. I would be in no hurry to buy these stocks right now. I'd wait at least until the Price of the VectorVest Composite goes up for two consecutive weeks; then I would begin to nibble at the list and I would buy Leaps instead of stocks unless I wanted the cash from dividends and I'd sell Covered Calls against my positions to reduce cost and risk. That's what I would do with these Blue Chip Bargains.

MAKE MONEY FOR A LIFETIME.
I took a call yesterday morning in which the caller wanted to know whether I had purchased the Contra ETF's we had written about Wednesday evening. I didn't answer his question directly, but asked whether the market was going up or down. As I remember it, he said he wasn't sure. Then I suggested we take a look at the Yahoo!Finance homepage. It was just before 11:00 AM and we saw immediately that the Dow and S&P were up, but the NASDAQ was down. Obviously, the market was mixed, so we could not conclude that it was going down. Therefore, I had not purchased the Contra ETF's.

As we talked I suggested he click on the "Read more" link located in the lower left hand corner of the Yahoo!Finance homepage. A neat summary of market activity appeared on the screen which showed trading volume, number of advancing and declining issues and so on. The Dow and S&P began taking off as we spoke, but there were far less advancing issues than declining issues. I said it looked like a sucker rally to me. Sure enough, the Dow peaked at 8,779 exactly at 11:00 AM and started to move lower. So what did I do? I started thinking about buying some Contra ETF's.

Before doing that, however, I had to make sure the market was trending lower. So I checked VectorVest RealTime and waited until the Price of the VectorVest Composite had fallen by at least 2.00% and the Advance/Decline ratio of all the stocks in our RealTime database was less than 0.50. This happened shortly after 1:00 PM, so we began to buy the top five Contra ETFs ranked by VST with AvgVol > 100,000. If you do not have VV RealTime, you could have waited until all three major indexes shown by Yahoo!Finance were in the red and the NASDAQ was down at least 2.00%. Moreover, the NASDAQ would have to have more than 1,000 declining issues. This also happened shortly after 1:00 PM.

Had I been looking to go long, I would have waited until 10:30 AM; then checked to see if the Price of the VVC was up at least 2.00%, the Advance/Decline ratio was above 2.00, and the Price of the VVC was trending higher before making any purchases. If you do not have VV RealTime, you could have waited until 10:30 AM; then checked to see if all three major indexes were in the green and the NASDAQ was up at least 2.00%. Moreover, the NASDAQ would have to have more than 1,000 advancing issues and be trending higher.

So why don't we just send out an email blast telling everyone what we're doing? Simply because it would move the market and you would be hurt in the process. When we first began "Riding-the-Wave," I wanted to make it oh so simple. We would say exactly what we were going to do the next day and which strategy we were going to use. This approach caused some severe problems. For example, we felt compelled to follow the plan regardless of what the market did the next day. When the market went against us, we would lose a lot of money. We and our subscribers lost money even when the market went our way because the stocks we were going to buy or sell had been marked up or down, as much as 50% in some cases, by the rush of orders that had come in prior to the open. We had to change our ways.

The two big changes were to make our commitment to trade conditional upon the market moving in a favorable market direction the next day and we listed several strategies we might use instead of one we would use. Our results improved dramatically but we now had the job of teaching you how to do what we would do. We have done this on an ongoing basis. To learn more about Riding-the-Wave, read my essays of 01/11/08 and 12/23/05, or click on Search Views at the top of your screen and type Best Strategies in the text box. You can also search our blog at www.vectorvest.com using the term, Best Strategies.

A man once said, "If I give you a fish, you will eat for a day. If I teach you to fish, you will eat for a lifetime." So learn to do what we do and you will Make Money For A Lifetime.

Last week I warned about listening to the geniuses on CNBC who say, "Buy, buy, buy," no matter what the market's doing. Well, they were at it again this morning, big time. They had a runner at the bottom of the screen with the traditional, "Time to Buy Stocks?," question for guys like me who usually have the Mute button on. Nevertheless, I turned it off and listened to the conversation. Two pretty good money managers, Mr. Mark Prado and Mr. John Dorfman, both said now was a good time to buy stocks. Surprise. Surprise.

CNBC then quoted Mr. Warren Buffett who had published an Op-Ed piece in the New York Times today, saying, "Buy Stocks. Cash is Trash." His optimism is based upon the credo to be fearful when others are greedy and greedy when others are fearful. He also said that cash is a terrible long-term asset...it pays virtually nothing and is certain to depreciate in value. Wisely, Mr. Buffett made no claims regarding what the market would do today, tomorrow or three years from now. He's just buying value for the long-term. Smart guy he is, indeed.

Finally CNBC brought in Mr. Sam Stovall, a veteran investor. He said this tough market reminds him of the late sixties, but he is buying stocks now. Mr. Stovall didn't elaborate, but the market was pretty hot in the mid-sixties and the Mighty Dow went above 1,000 for the first time. Inflation and interest rates went up in the late sixties and stock prices, of course, moved lower. Although it wasn't a happy time for investors, the market got worse in the seventies.

The Arab oil embargo of October 1973 triggered skyrocketing inflation and interest rates, causing a recession, and the stock market crashed. The Mighty Dow was crushed and it wasn't until August 1982 that it got above 1,000 and stayed there. Can a long, drawn-out dry-spell like that happen again?

You bet it can. The Arab oil embargo was a life changing event and its affects are still being felt to this very day. The current credit crisis is another such event and is also changing the way we live. The Arab oil embargo was not good for America and so far the credit crisis hasn't been either. So how can one imagine that now is a good time to buy stocks?

Last Friday, the Price of the VectorVest Composite closed at $18.59 per share, its lowest level since August 28, 2003. Buying stocks at a five-year low is not a bad time to go bargain hunting. Apparently a lot of investors thought so and the Price of the V V C soared a phenomenal $1.85 per share on Monday. It dipped a little on Tuesday and crashed to a lower low of $18.58 on Wednesday. Yesterday, Thursday, it opened to the downside and moved to an intraday low of $18.01. Then the big boys came back from lunch and stock prices took off. It was a beautiful reversal day and the Price of the V V C closed at its high of $19.23 per share. Last Friday's bottom was tested successfully, our ProTrader graph showed that a perfect Hammer formation had been formed, and the Primary Wave was Up.

As for today, the market opened to the downside, rallied well into positive territory; then pulled back, ending slightly in the red. So the Price of the V V C is up for the week and I believe it's Time to Buy.

FOR BARGAIN HUNTERS ONLY.
You can use either the search function in these Views or go to our blog at www.vectorvest.com to see what I have written on the subject of bargain hunting. Now's the time to do some homework.

I received an email this week chastising me for laughing at the morons on CNBC. I apologize for saying that...but only because I should have been crying. It really saddens me to see how CNBC's "Wall Street" approach to investing has hurt their viewers in this bear market. But CNBC is not alone in this regard, the conventional wisdom teaches us bad practices.

I began investing in stocks about fifty years ago and I've probably made every mistake in the book. My worst mistake was selling all my stocks in December 1974, at the very bottom of the '73-'74 bear market. I was very discouraged because I hadn't made a dime after 15 years of buying and selling stocks. I won't call it investing, but I wasn't a Trader either. Nevertheless, I was so dumb I was lucky I didn't lose my shirt. Yes, I had a broker from Merrill Lynch. Yes, I belonged to an NAIC stock club. Yes, I read books on investing, including Benjamin Graham's Intelligent Investor. Yes, I read Barron's and Forbes and the Wall Street Journal. Yes, I used Value Line. But it didn't do any good because my techniques were bad and I couldn't tell the difference between a Bull market and a Bear market.

For example, my ex-broker always called me when he saw a stock going down in price. He was the expert, so I usually bought it. You know what? It usually kept going down and I was stuck with it. One of my pet peeves with CNBC is that even on the worst down days, they ask, "Is this a buying opportunity? What are you buying now?" It appalls me to see Cramer go into his act, saying, "'Mon back, mon back," urging his listeners to buy, buy, buy on a pullback. Boo-yah, baby...until the falling knife goes through your heart. The bottom line: Never buy stocks on the way down.

Another pet peeve of mine is this business of buy and hold. On June 28, 2008, an article written by Mr. Larry Light appeared in the Wall Street Journal. It was entitled, "What to Do to Survive This Market." It said, "There's a decent argument to be made for buy and hold. Aside from the absurdity of liquidating an entire equity portfolio - the tax headaches would be epic - investors ultimately end up better off than if they had tried to sell at the top and buy at the bottom." Really? I think I'm going to call this guy and introduce him to the "Yellow Brick Road."

Your top priority right now must be to preserve capital. If you haven't already sold your stocks and gone into cash by this time, I don't think you should do it now. But you should learn how to protect your portfolio. Please see my June 29, 2007 essay on Portfolio Protection. Learn how to use Option Collars. If you do, you'll have the money to buy stocks when this bear market ends, producing bargain prices. This is the silver lining. So survive now and be ready to look for The Silver Lining.

PLANNING YOUR RE-ENTRY.
We were hoping to go long two weeks ago, on Friday September 26th, when stock prices went down instead of up. They got crushed the following Monday and havoc has reigned supreme ever since. So why didn't we go short and make a lot of money? Simply because the Buy/Sell Ratio, BSR, closed at 0.09 on Monday, September 29th, and our experience has shown that it's not a good idea to go short when the BSR is below 0.20. In fact, it's the time to think about going long and that's what we've been doing. But we're not going long until we see solid signs of a sustainable recovery. First I want to see an explosive rebound. Then I want to see a good follow-up day. Finally I want to see the Primary Wave flash an Up signal.