Attendees at our upcoming Two-Day Investment Seminar in Lynnwood, Washington are in for a special treat. They will be receiving a Friday night presentation on Firework Stocks. These stocks have been sensational performers in a very difficult market.

By definition, a Firework Stock is one that shoots up in price and goes on to double, triple or quadruple in a matter of weeks. The whole idea behind Firework Stocks was first described in my essay of July 1, 2005. A step-by-step procedure for finding these guys, at the lowest possible price, was given in my essay of July 8, 2005. I also noted that the procedure was somewhat complicated, so we created a WatchList Group called "Firework Stocks - 2005" and began sending the results of our searches to you. On July 15th, we began sending a WatchList called "FWS Favorites" to you. This is the mother lode and deserves your full attention. Let's see how they have performed.

Quick Test shows that the top 10 stocks ranked by VST in the 07/15/05 FWS Favorites WatchList gained an average of 36.41% from 07/15/05 through yesterday, 09/22/05. There were 8 winners and 2 losers. The Price of the VVC gained 0.18% over this same time period. The average annualized gain of the top 10 VST stocks in the 10 FWS Favorites WatchLists created since 07/15/05 was 55.26%. The average annualized gain for the Price of the VVC in this same series of tests was -20.59%.

I also ran a series of 10 back-tests on the FWS Favorites WatchLists using Portfolio Manager and AutoTester. In these tests, I bought the top 10 FWS Favorites stocks under $10.00, ranked by VST descending, sold on a 10% loss, and managed daily. (A similar test was shown as our Strategy of the Week on 07/29/05.) The average annualized gain for the ten tests was 84.90%. Not bad. These results are quite good actually, given the choppy market we've been in. Even so, I'm not suggesting that you blindly buy FWS Favorites stocks without paying attention to the direction of the market. It's much better to buy these guys when the market is going up, i.e., the Primary Wave is Up. When the Primary Wave is Down, as it is now, familiarize yourself with the graphs of these stocks. I always prefer to trade the stocks with the nice, smooth chart patterns.

If you are at all interested in buying low-priced stocks and watching them deliver triple digit gains, attend a seminar such as the one in Lynnwood, or at least re-read the essays cited above. Having said this, you should also be aware that past performance is not a guarantee of future profits. I like these stocks and will keep tracking and trading them. In a couple of months, I'll be sending you another Update on Firework Stocks.