I got a call several weeks ago from a long-term VectorVest subscriber asking if I would be willing to make a "Retirement Strategy" presentation at the facility where he lives in Sarasota, FL. He said it was the most wonderful place he has ever lived and all of the residents were very well to do. Nevertheless, he was so pleased with his experience with VectorVest that he wanted them to learn how they, too, could benefit from its use. After some discussion, I agreed to make a presentation and put together a talk entitled, "How to Make Substantial Income While Living a Life of Leisure."

The whole idea was to illustrate how VectorVest could, in a few hours a week, help Prudent Investors generate significant current income, at least 10 %/yr., and capital appreciation, 10 %/yr., with relatively low risk. I referred to my "Retirement Essays and Strategies" as the basis for the presentation. Mr. Dan Misch, VectorVest Instructor and Product Consultant, and I gave the talk last Monday, April 19th.

I thought the presentation was well received and several very interesting questions were asked. Several attendees asked if we managed money using VectorVest. The answer was yes and no. Yes, we use it for our own accounts and for the company's accounts. No, we do not manage money for others. One gentleman asked if we would teach his daughter how to invest with VectorVest. Our answer was yes, of course, that's what we do.

This whole experience got me thinking. Here I was, a dirt-poor, first generation American, making a presentation on investing to a group of rich guys. How could this happen? I went to college and gained the knowledge I needed to figure out how to make money in the stock market. I graduated with degrees in Chemical Engineering, but it was the math and modeling skills that allowed me to create VectorVest. Had I remained an engineer, I probably would be scrimping and scraping to live the lifestyle I desired, even though I rose to a high executive position. It was the stock market that put real money into my pocket and I was so lucky to learn how to make money that way.

Yes, we will teach your daughter, son, nieces, nephews and grandchildren how to make money in stocks. Think about it. If you get them to invest with VectorVest, you will be doing them The Biggest Favor.

SYNTHETIC LONG STOCK POSITIONS.
Dan and I met with the Sarasota User Group on Monday evening, and it was great fun. I spoke about Retirement Strategies and Dan gave a presentation on VectorVest RealTime. I ended my talk by advocating the use of Covered Calls to lower risk and generate extra income from optionable dividend paying stocks when a gentleman asked me what my favorite option trade was? I said it was to buy Calls and sell Puts to create synthetic long stock positions on high priced stocks such as BIDU, GOOG and AAPL. I used AAPL to illustrate what I meant.

Apple had closed at $247.07/share on Monday, so it would cost me $24,707 plus commissions to buy 100 shares of stock at that price. The Options Pricing Model said that it would cost me $8.23/share or $823.00 plus commissions to buy one AUG 250 Call Option Contract, which controls 100 shares of stock. So I had a choice. I could spend $24,707 to own 100 shares of Apple stock or I could spend $823.00 to buy one AAPL Aug 250 Call Contract. Well, I knew that I would make money if AAPL's price went up, but AAPL's price would have to be at least $258.23/share by the August Expiration date just for me to break even. I didn't like that, so I said I would sell one AAPL Aug 250 Put Contract for $11.03/share or $1,103 less commissions to offset the cost of the Call Contract. In fact, I would more than offset the cost of the Calls, I'd be about $280 to the good. So what's wrong with this picture?

By selling the Puts, I'd be incurring $25,000 worth of downside risk. But I was buying the Calls because AAPL was on a roll and I think I have enough sense to get out of the position if it went against me. Just in case you didn't know it, AAPL released sensational earnings after the close on Tuesday and the stock is now trading at $271 per share. The July 250 Call is trading at $27.80 per share and the July 250 Put is trading at $6.30 per share. (There are no Aug Contracts.) Nevertheless, you'd be up about $2,400 or about 10% on 100 shares of stock or up about $2,430 on your option trade in which you had a net credit. That's why I like Synthetic Long Stock Positions.

THE CAROLINA COCKTAIL.
The questions started coming fast and furious when Dan Misch spoke about the VectorVest RealTime Derby last Monday night. It is such a fantastic tool and we want you to benefit from it, even if you can't trade during the day. So we have been listing the top five 5-Day Derby Winners in the "Strategy" Section of the Views each day because these Strategies have been performing the best. Logically, one would think they're good Strategies to use to look for hot stocks. If you did nothing more than run the Strategies in UniSearch and cherry-picked stocks from the graphs, you'd find a ton of great winners. I specifically remember talking about the beautiful graph for ROHI we found Monday night with Timsons Tigers. The stock closed at $1.80 on 04/19. It's at $3.45, up 91.7% in four days, as I write this.

Man, if you don't like looking at graphs; then learn how to create killer searches. Here's an idea for you. Build a WatchList of the top 10 stocks found by the five 5-Day Winners listed every Friday. Then sort the WatchList by VST/Actual Price. I call this The Carolina Cocktail. The performance of the top ten stocks in these WatchLists since February 12th has been amazing. If you want to see how to make a Carolina Cocktail, join Mr. David Thornton, Director of Sales and Marketing, at the VectorVest University to see this week's celebratory "Strategy of the Week" presentation: "The Carolina Cocktail."