While it seems like a lifetime ago, it was only on June 9, 2006 that I wrote an essay called "Summer Hiatus." It described a strategy of rebalancing high VST-Vector stocks that produced a phenomenal gain of 911.9% from January 5, 1996 to June 8, 2006 with 66.1% winners and a maximum drawdown of only 21.43%. I said I would use this strategy to invest $100,000 of my own money starting on October 6, 2006 and the following week I described how I would do it in an essay called, "My Game Plan."

Well, October 6, 2006 is here, so it's time to get started. In accordance with My Game Plan, I'm going to buy the top five VST-Vector stocks on Monday which were shown as of today's close. I don't know what stocks they will be, but I will make sure that no more than two are assigned to the same Business Sector. If the stocks are optionable, I will buy the 9-month, at-the-money Call Options instead of the stocks. To help defray the cost of the options, I may sell out-of the money Puts on the underlying stock to create synthetic long-stock positions. I'll repeat this process in each of the next three weeks so that I'll have 20 positions in all. I will hold these positions until July 6, 2007 when I'll sell all 20 positions.

For your information, we will establish a $100,000 portfolio in our corporate account which will hold the same 20 stocks but no options. This will allow you to see exactly what happens to the all-stock portfolio. It will make its first appearance on Monday and be called Summer Hiatus - 2006.