Our experience with the current C/Up Yellow Brick Road campaign is much better than the one we had starting on January 9, 2009. What was done differently?

First of all, we took steps to prepare you better for your entry into the market when we got the C/Up signal. For example, I wrote an essay on "Avoiding the Stampede" on March 13th, well before we actually got the C/Up signal on March 26th. Then I wrote another essay on March 20th, called "Off to See the Wizard." This essay explained that we would be suggesting several strategies for you to consider when going long on the C/Up signal because we knew that our subscribers would move-the-market if too many tried to pile into the same stocks at the same time. So we reiterated our guidance on avoiding the stampede and suggested five additional Strategies that were described in our "Strategy of the Week" presentation called, "The YBR Express Lane." Therefore, we suggested six Strategies on March 26th, when the C/Up signal arrived.

We also said, "Please do not buy any stocks tomorrow unless the market is moving higher and please use limit orders." I can't emphasize enough how important it is to buy rising stocks only when the market is rising. Well, the market did not rise the next day. In fact, it got hammered for the next two trading days and the Primary Wave went from Up to Dn. So we sat tight. Finally, on April 1st, the Primary Wave turned to Up again, and we alerted the "Yellow Brick Roaders" to prepare for entry. We went long with "Explosive GRT & EPS Stocks" on April 2nd.

Now, the fun began. It turns out that the suggested Exit criteria for the Yellow Brick Road Strategy was a 50% Gain or 30% Loss. I found that I liked the 50% Gain, but I became increasingly uncomfortable with the 30% Loss. Some of these stocks, such as ALTI, soared early on but came down sharply shortly thereafter. I didn't like that. Why should I be using a 30% Stop-Loss when the stock had soared nearly 36%? Normally, I would raise my Stop so that I could capture most of the gain. Moreover, I'd be a damn fool if I ended up losing 30% on the stock. So I tightened my exit criteria and I began using a Ratchet Stop when I thought the market was getting toppy.

The VectorVest Ratchet Stop is defined as, "the highest Stop-Price reached while the stock was in your portfolio." In the case of ALTI, this would have been $1.09, one cent below our purchase Price of $1.10 per share. The Model Portfolio shows that ALTI was sold at $1.10 per share on April 28th. Subsequently, I began using a 20% Ratchet Stop to exit positions. These Stops are usually higher than the VectorVest Ratchet Stops.

Nevertheless, I ran a back-test this morning just to see what the affect of using a Ratchet Stop instead of the 30% Stop-Loss would have been on this portfolio's performance. As of yesterday's close, the Ratchet Stop portfolio was up 35.71% and the 30% Stop-Loss portfolio was up 40.01%. Our actual gain since April 1st is 36.94%. Not bad in any case. Even though the 50/30 G/L portfolio had the best performance, I still prefer using a combination of 50% Gain and the VectorVest Ratchet Stop.