Our team at the Calgary Financial Forum had a ball last week playing the "The Birthday Game." They won virtually every time, especially with the Canadian stocks.

You may recall from last week's essay that "The Birthday Game" is one in which we ask a visitor to our booth for the month and day on which they were born. We then use that information to select the top ten stocks ranked by VST descending from Stock Viewer a year ago. Our bet is that this portfolio of stocks went up in price from the selection date to the current time. If the portfolio didn't make money, the visitor won a prize. Based upon my experience, I said last week that we won about 80% of the time. Well, I was too modest.

We ran a series of tests last week in which we started on Friday, June 2, 1995 and advanced the starting date each subsequent Friday, creating 544 unique 10 stock portfolios. Using Quick Test, we found that these portfolios made money 95% of the time. Does this sound too good to be true? Prove it to yourself. Simply select any Friday you want and use Quick Test to see how the top 10 stocks in Stock Viewer performed to the current date. Chances are that the portfolio went up in price. The average gain for these 544 portfolios was 80.9%, and the average annual rate of return was 21.0%.

Is there something magic about a ten stock portfolio? No, not at all. We also tested 5, 15 and 20 stock portfolios. The results were remarkably similar. As far as the performance of individual stocks is concerned, an average of 66% of the stocks went up. So what do we have here? We have a way of picking a portfolio of stocks which is highly likely to appreciate in value with very little effort. But it just can't be that easy. Everybody knows that we all would feel guilty if we didn't work like dogs trying to pick good stocks. And even if we did use VectorVest to make a portfolio of the top 10 stocks, we'd need to be in there watching it like a hawk, wouldn't we?

Not according to what I've seen. I've been running high VST performance tests for over fifteen years now and I'm still amazed by what they show. Read my essay called, "The Test of Time," in the March 15, 2002 edition of the Views. In it, I tell how the four portfolios of the top ten VST stocks in the March, 1992 issues of the VectorVest Stock Advisory each gained over 600% in ten years. That's not bad, but there's a lot more to using high VST stocks than the simple buy and hold strategy indicated above.

I had run some of these variations a long time ago and found the results to be very interesting. Those studies took a lot of time and effort to conduct, so I got away from them. We have some new tools to work with now, so I intend to show you a whole lot more about making money with High VST Stocks.

Our team working at the Calgary Financial Forum is going to have a lot of fun this weekend. They are going to play "The Birthday Game."

So what's "The Birthday Game?" It's a game that's aimed to illustrate the power and efficacy of the VectorVest System of stock analysis. Here's how it works. We ask visitors to our exhibitor's booth if they would like to win a prize such as a Free Five Week Trial to VectorVest. If they say yes, we ask them for the month and the day on which they were born. We then use that month and day to select the top ten stocks sorted by VST descending in Stock Viewer in a prior year. We then use Quick Test to check the performance of those stocks to the current date. For example, I was born on March 5th. When I tested the ten top VST stocks in Stock Viewer from 03/05/04 to 11/17/05 using Quick Test, I saw a gain of 22.06% with six winners and four losers. If I went back to 03/05/03, I'll see a gain of 140.48% with nine winners and one loser. So, I guess I should always buy high VST-Vector stocks on my birthday. Seriously, however, these top ten VST stock portfolios have shown a gain about 80% of the time.

Having watched this demonstration over and over again, all with different starting dates, the skeptic will say, "Of course the stocks went up. That's because the market went up." We say, "OK, let's pick the worst ten stocks priced greater than $1.00, ranked by VST ascending and see what happens." These portfolios usually lose money. (If you allow penny stocks to enter the test, you'll often find one stock with an extraordinarily high gain which results in a gain for the portfolio, even though there would be many more losers than winners.)

So why do high VST stocks tend to go up and low VST stocks tend to go down? The skeptic doesn't know, but frequently says, "You must have it rigged some way." Our answer is, "Of course we do. We rigged the system by giving high VST ratings to stocks having the best combinations of Value, Safety and Timing. These stocks have real earnings, acceptable financial performance and are going up in price. Low VST stocks usually have no earnings, terrible financial performance and are going down in price. So how would you expect them to perform over time?"

In case you happen to be a skeptic, please read my essay of March 5, 2004. Do what is suggested there. Prove our claim for yourself. High VST-Vector stocks tend to go up and low VST-Vector stocks tend to go down. It happens because of the way VectorVest is Rigged.

"Perchance he for whom this bell tolls may be so ill, as that he knows not it tolls for him." - John Donne, 1623.

It is said that no one rings a bell when something major is about to happen on the stock market. Maybe so, but something akin to that may have happened last Tuesday when Toll Brothers Inc., a luxury home builder, cut its earnings guidance for the current fiscal year. The company said orders rose only 1% in its fiscal fourth quarter ended October 31. Some analysts expected an increase of 22%.

The curious thing about this announcement is that Chief Executive, Mr. Robert Toll, had been busy promoting a bullish outlook for home builders for the last six months even as he was selling shares of his own stock. He was not alone in this endeavor. Several of his home building colleagues also appeared on TV outlining grandiose plans for robust growth for years to come. How could they? Have they not heard that the consumer is being tapped out? Interest rates have been rising and the "housing bubble" is about to burst?

Of course they have, over and over again. Yet they have forged ahead, making more and more money each year. So why should it be any different this time? I don't know. But why did Mr. Toll sell so much of his own stock? Perhaps he knows For Whom the Bell Tolls.

THURSDAY'S RALLY.
With news of a $66.1 billion September trade deficit, the market opened on a sour note Thursday and muddled through the morning. Stock prices rose sharply in the afternoon, however, after the last leg of the government's $44 billion bond auction appeared to draw record demand from foreign central banks. Why was this so important?

Concern has been growing that foreign investors may begin backing away from funding America's voracious spending appetite. Foreign demand has been the major reason for keeping bond yields low. Should this source of money dry up, long-term interest rates would rise sharply. High interest rates would raise mortgage rates, reduce the sales of new homes and weaken the economy. A weak economy would lead to lower corporate earnings and a bear market.

So evidence that foreigners were still stashing their money away in U.S. bonds was good news for the stock market, triggering Thursday's Rally.

Here I am in my favorite city, Las Vegas, and people all around me are making fortunes. I can too. All I need to do is put a coin into one of those slot machines, and bingo! To the ringing of bells and blowing of whistles, the world will know I hit the jackpot. But I ain't going to do it. I ain't so dumb as not to know that everybody don't hit the jackpot all the time. Besides, I got a better way to get rich.

I'm so lucky. I get letters in the mail just about every day telling me about stocks that can make me rich, really, really rich. More rich than any jackpot on the Strip ever could. So why waste my money on the slots when I can bet on a sure thing? Remember when I told you about Fellows Energy last April? It was 94 cents a share? The letter said it could go to $50.00. Yeah, well it went to less than 50 cents. But that's not so bad. If I'd put my money in a slot machine, I would of lost it all. With Fellows, I'd lost only half of it. I didn't buy it at 94 cents anyway. I could see it was going down. That's another thing. You can't see what's going on inside a slot machine.

And ya know what? Fellows took off like a bird a couple of months ago. Hit a buck 34. Now that's not 50 bucks, but no slot machine ever gave you a second chance to make money. Yeah, I know. Fellows is back down to 54 cents.

I'm so lucky. I can hardly wait to read my mail. Michael Fagan writes that, "Tornado Gold, TOGI, is the NEXT small-cap gold stock to blast through 500% investment returns. Scott S. Fraser, who sends me a lot of stuff, says to "Buy Klondike Star (KDSM), now Under $3.50...before it Shoots Well Above $15."
Cascade Energy (CSCE) is projected to be one of the Top Performing petroleum stocks of 2005. Petrogen (PTGC) could be sitting on 72.2 billion cubic feet of natural gas worth over $700 million. Charles Mizrahi says that Terax (TERX) is "a little known company that is about to begin drilling in the hottest gas play on the planet where every day 1 billion cubic feet of gas is recovered."

I'm so lucky. I've got these fantastic stocks in oil, gas, gold and electronics, just waiting to make me rich. So why should I play the slots? But, as I said before, I ain't so dumb as not to know that some of them are nothing but pure baloney. So I put these stocks into a WatchList called "Junk Stocks." Just look at these babies: Average RV 0.43, Average RS 0.74, Average RT 0.66, Average VST 0.68. I'm So Lucky.