The goal of every brokerage firm is to have thousands, if not millions, of its customers send them a check every month. So how do they try to make this happen?

They tell investors things that aren't true. They say things that have been carefully crafted to sound factual, logical and reasonable but are not. These things have been repeated so long and so often that they have become the conventional wisdom of Wall Street. They are presented as though they were meant to help you make money in stocks, but they actually were tailored to get your money and keep it. So what are these lies and how can you avoid their pitfalls?

Come hear my presentation on Saturday night, January 3, 2009, at our All-New, Two-Day Investment Seminar in Tampa, FL, and I'll tell you all about Wall Street's Five Biggest Lies.

JAIL BREAK.
What do Bottoms Up, Jubilee, Odd Fellows Long and Pirates Long have in common? Why have these strategies produced explosive profits time after time when the market soars from a bottom?

They all find stocks that have very low RT levels at market bottoms, whether you find these stocks by sorting by VST/RT, RV/RT or GRT/RT Desc. These strategies also find stocks with high RV levels. So the moral of this story is that reasonably good stocks which have been the most beaten down in price fly higher and faster than those that have held up the best. With this in mind, I wanted to create the mother of all explosive strategies. So I came up with a new strategy called "Jail Break."

How would you like to pick stocks like Mr. Warren Buffett does? You're not alone. USA TODAY featured a cover story yesterday on 47 books with Mr. Buffett's name in their titles. I'm happy to say I ingested Mary Buffett's excellent book, Buffettology, many years ago.

Here's what I wrote on February 6, 1998: "Want to know how Warren Buffett turned $37,000 into $20 billion? Read Mary Buffett's book, Buffettology. Want to know how VectorVest really works? Read Mary Buffett's book, Buffettology."

Yes, the similarities between the VectorVest system of stock analysis and Mr. Buffett's methodology are striking. But it's not a coincidence. Both seek to identify safe, undervalued stocks. Both are based upon the valuation fundamentals of Graham and Dodd. Both employ the comparison of earnings yield to interest yield and both favor stocks of companies with consistent, predictable earnings growth. When Prudent Investors buy high Relative Value, high Relative Safety stocks, they are using VectorVest to implement the concepts of "Buffettology."

With the famous words of Mr. Buffett, "To be fearful when others are greedy and greedy when others are fearful," still ringing in my ears, how can I build a stock portfolio that would make Mr. Buffett proud and still not read all 47 books? Simple, I'll just create a VectorVest search to find all the stocks in our database having RV > 1.00 and RS > 1.00 and sort them by RV*RS*GRT*MC Desc. I'll call it the "Best of the Biggies."

As of yesterday, 10/23/08, this search found 474 stocks with mighty Exxon Mobil ranked at the top. I also saw names like Microsoft, Apple and Google high on the list. But seven out of the top 10 stocks were in the Petroleum Business Sector. While these are all great companies, I still want to pick stocks Warren would love and I also want to diversify my selections. What should I do?

I know, I'll use Portfolio Manager. It will allow me to limit how many stocks I get from any single Business Sector or Industry Group and it will also allow me to sort and rank them however I want. A complete click-by-click procedure of how to create a 100 stock portfolio using the "Best of the Biggies" search is presented in the Strategy section, shown below. The portfolio is called "Blue Chip Bargains" because the RV and RS criterion assures me that all of these stocks are undervalued and have above average financial track records.

The "WatchList View" feature within Portfolio Manager allows me to analyze, sort, screen and rank all 100 stocks however I want. First, I'll sort them alphabetically just to see what I have. Wow, what a list of great names, starting with ABB Ltd., at the top and finishing with Westpac Banking. Some of the more familiar names include Anheuser Busch, Caterpillar, Hewlett-Packard and Lockheed Martin. Some of the less familiar names include Alcon, Danaher, Hologic and Sasol.

Next I'll rank these 100 stocks by VST-Vector Desc. This indicator brings the stocks with the best combination of Value, Safety and Timing to the top of this list. Guess what? Mighty Exxon Mobil is ranked highest with a VST of 1.24 and it has an "H" recommendation. The stock with the lowest VST, 0.92, is Google with an "S" rating. I wouldn't worry about the "S" rating at this point because we're bottom-fishing and just about all of these stocks have an "S" rating. To be sure, Google should have been sold last January when VectorVest gave it an "S" rating at $617 per share.

One more thing I like to do is sort by YSG-Vector, i.e., Dividend Yield, Safety, Growth Vector. I see that Banco Sandantar and PetroBras are at the top of the list with juicy dividend yields of 9.93% and 7.35%, respectively. If you think that's good, read my essay of August 29, 2008 on how you can double or triple your cash income on these stocks even if their prices go nowhere.

The next thing I would do is look at a five-year graph of each of these stocks, taking special note of those with the smoothest, most consistent earnings (EPS) patterns. Take a look at Alcon, ACL, for example. Yes I know it got killed yesterday, but this company knows how to make money. Also look at Schlumberger, truly a great company. It, too, has gotten killed. My oh my, just look at the great stocks in this list, selling at bargain basement prices.

OK, so how would I go about building a portfolio from this list of stocks? I'll re-read my "Guide to Worry-Free Investing." It says to: (1) Buy high VST-Vector "B" rated stocks, (2) Diversify in What and When you buy, and (3) Use Stop-Sell Prices. I would be in no hurry to buy these stocks right now. I'd wait at least until the Price of the VectorVest Composite goes up for two consecutive weeks; then I would begin to nibble at the list and I would buy Leaps instead of stocks unless I wanted the cash from dividends and I'd sell Covered Calls against my positions to reduce cost and risk. That's what I would do with these Blue Chip Bargains.

MAKE MONEY FOR A LIFETIME.
I took a call yesterday morning in which the caller wanted to know whether I had purchased the Contra ETF's we had written about Wednesday evening. I didn't answer his question directly, but asked whether the market was going up or down. As I remember it, he said he wasn't sure. Then I suggested we take a look at the Yahoo!Finance homepage. It was just before 11:00 AM and we saw immediately that the Dow and S&P were up, but the NASDAQ was down. Obviously, the market was mixed, so we could not conclude that it was going down. Therefore, I had not purchased the Contra ETF's.

As we talked I suggested he click on the "Read more" link located in the lower left hand corner of the Yahoo!Finance homepage. A neat summary of market activity appeared on the screen which showed trading volume, number of advancing and declining issues and so on. The Dow and S&P began taking off as we spoke, but there were far less advancing issues than declining issues. I said it looked like a sucker rally to me. Sure enough, the Dow peaked at 8,779 exactly at 11:00 AM and started to move lower. So what did I do? I started thinking about buying some Contra ETF's.

Before doing that, however, I had to make sure the market was trending lower. So I checked VectorVest RealTime and waited until the Price of the VectorVest Composite had fallen by at least 2.00% and the Advance/Decline ratio of all the stocks in our RealTime database was less than 0.50. This happened shortly after 1:00 PM, so we began to buy the top five Contra ETFs ranked by VST with AvgVol > 100,000. If you do not have VV RealTime, you could have waited until all three major indexes shown by Yahoo!Finance were in the red and the NASDAQ was down at least 2.00%. Moreover, the NASDAQ would have to have more than 1,000 declining issues. This also happened shortly after 1:00 PM.

Had I been looking to go long, I would have waited until 10:30 AM; then checked to see if the Price of the VVC was up at least 2.00%, the Advance/Decline ratio was above 2.00, and the Price of the VVC was trending higher before making any purchases. If you do not have VV RealTime, you could have waited until 10:30 AM; then checked to see if all three major indexes were in the green and the NASDAQ was up at least 2.00%. Moreover, the NASDAQ would have to have more than 1,000 advancing issues and be trending higher.

So why don't we just send out an email blast telling everyone what we're doing? Simply because it would move the market and you would be hurt in the process. When we first began "Riding-the-Wave," I wanted to make it oh so simple. We would say exactly what we were going to do the next day and which strategy we were going to use. This approach caused some severe problems. For example, we felt compelled to follow the plan regardless of what the market did the next day. When the market went against us, we would lose a lot of money. We and our subscribers lost money even when the market went our way because the stocks we were going to buy or sell had been marked up or down, as much as 50% in some cases, by the rush of orders that had come in prior to the open. We had to change our ways.

The two big changes were to make our commitment to trade conditional upon the market moving in a favorable market direction the next day and we listed several strategies we might use instead of one we would use. Our results improved dramatically but we now had the job of teaching you how to do what we would do. We have done this on an ongoing basis. To learn more about Riding-the-Wave, read my essays of 01/11/08 and 12/23/05, or click on Search Views at the top of your screen and type Best Strategies in the text box. You can also search our blog at www.vectorvest.com using the term, Best Strategies.

A man once said, "If I give you a fish, you will eat for a day. If I teach you to fish, you will eat for a lifetime." So learn to do what we do and you will Make Money For A Lifetime.

Dorothy lived in a small, single room house in Kansas, surrounded by a sea of grass. She dreamed of living in a better place, "somewhere over the rainbow." One day she and her dog, Toto, were whisked away, house and all, by a tornado that deposited them in another land called Oz. Although the Land of Oz was very beautiful and the people, the Munchkins, were very nice, she wanted to go back home. She was advised to follow the yellow brick road to Emerald City to ask the Wizard of Oz for help.

As she walked along the yellow brick road, Dorothy was joined by a Scarecrow who wanted a brain, a Tin Man who wanted a heart, and a Cowardly Lion who wanted courage, all of whom hoped the Wizard would grant their wishes. Using traits they thought they lacked, these unlikely heroes overcame numerous obstacles in their quest to see the Wizard.

Upon meeting the Wizard, the Scarecrow received a head full of bran, pins and needles, the Tin Man a stuffed heart and the Cowardly Lion a potion of courage. Because of their faith in the power of the Wizard, these otherwise useless items happily served their owner's purpose. Dorothy was promised to be escorted back to Kansas by the Wizard who failed to do so. After overcoming a myriad of additional challenges, she ultimately returned to Kansas by virtue of her silver slippers. Upon arriving in Kansas, she realized that there's no place like home.

All of us, young or old, can relate to Dorothy and her friends. We all have dreams and aspirations. As investors, we dream of making money in the stock market and we aspire to achieve financial freedom. But we need a way to get there. We need a plan, a path, a yellow brick road, if you will.

We believe we have created such a road at VectorVest. It is based upon a foundation of fundamental parameters and technical indicators. Its bricks are made of strategies, tools and techniques and its road signs are given by the Color Guard, Market Timing System and VectorVest Views. The VectorVest "Yellow Brick Road" is a trading system which allows investors to make money in both up and down markets. It is easy to use, does not demand a lot of time and can be done at night when the market is closed.

The "Yellow Brick Road" uses two strategies, "Easy Does It - C/Up," for going long on Confirmed Up signals and "Easy Does It - C/Dn," for selling short, if one wishes, on Confirmed Dn signals. The first strategy was presented as last week's "Strategy of the Week." It produced a gain of 190.04% from March 21, 2003 to September 26, 2008. The second strategy, "Easy Does It - C/Dn" will be presented this week. You will see how it turns a brutal year, such as we are now having, into a money maker.

In addition to the wonderful results the "Yellow Brick Road" has produced, it is explicit in telling you what to do when. But to travel this road successfully, you must have character. You must have Dorothy's determination to reach your goal, the Scarecrow's brains to do things according to plan, the Tin Man's heart to control your emotions and the Cowardly Lion's courage to stick to the system.

No system is perfect, but after more than 20 years in business, I believe this is the best trading system VectorVest has ever produced for the average investor. If you don't believe me, see if you can develop a better one. If you can---then use it. You'll get rich! As for me, I believe the best path to Financial Freedom is The Yellow Brick Road.

Congratulations to Mr. David Price of Columbus, Ohio for achieving the 2nd Prize Award of $100,000 in CNBC's Million Dollar Portfolio Challenge. Fantastic! How did he beat all but two other guys in a contest of over 254,000 contestants?

Of course, he used VectorVest. According to David, VectorVest was the catalyst that sent him to the top ranks of the contest. He implemented the Stalwarts strategy, buying the top four stocks when the contest began on May 12, 2008. He said that Stalwarts kept his portfolio moving up and moving down, but staying in the top 25 ranking. Then when the market started moving down, he sold out of his Stalwarts picks and just selected stocks "hit and miss." This approach sent him down to 31st place in the overall contest.

Then, he said that when I wrote about the consolidation pattern on Friday, July 11, 2008, that was enough for him. He spent a good deal of time testing the five strategies that I recommended to go long with on the 16th and said that he liked Odd Fellows Long and Pirates Long. He then selected Pirates Long because the stocks it returned were mostly financial stocks, which everyone knew had been beaten down the worst. So he bought Freddie Mac, Fannie Mae, Wachovia and Regions Financial on the 17th and by the end of trading on the 18th when the contest ended, his portfolio had climbed from $1.8 million to $2.8 million, leaving him in third place and winning $100,000.

Wow! What a story. We're very happy for you David, and we're extremely proud that VectorVest helped you become a $100,000 Winner.

A GREAT TRY.
On June 12, 2008, Dr. Sarosh Quereshy was in 1st place in the CNBC contest and said it was because of VectorVest. He too was using Stalwarts and he did very well until the big correction occurred the week before the end of the contest. He fought back from 116th place to 10th place using bank and financial stocks as the contest end was nearing. His portfolio was up 38% in the last week of the contest, but he still didn't win! Ouch.

Dr. Quereshy says that if that had been his IRA, he would be retired now. Nevertheless, it must have been a great thrill to come so close to winning. Our compliments go out to Dr. Quereshy on A Great Try.

STOCKS YOU SHOULD KNOW ABOUT.
Many of you have noticed that we have put a new feature on the Home Page of our website called "Stocks You Should Know About." This feature highlights "Best Performers > $1.00" when the Dow Jones Industrial Average is going up and "Worst Performers > $10.00" when the Dow Jones Industrial Average is going down. You have also asked for the strategies we use to find these stocks. Here they are:

Best Performers > $1.00: Price (Split Adjusted) > $1.00, AvgVol > 100000, %PRC > 2, REC = B, RV > 0.90, RS > 0.90, Sorted by RT*CI Desc.

Worst Performers > $10.00: Price (Split Adjusted) > $10.00, AvgVol > 100000, %PRC < -2, REC = S, RV < 0.90, RS < 0.90, Sorted by RT*CI Asc.

These strategies will be placed into the UniSearch Tool this evening. As far as the website goes, these strategies are being run on VectorVest RealTime every 60 seconds, but with a 15 minute delayed signal. If you actually have VectorVest RealTime, you can run them on a refresh cycle time of your choice with actual, real-time pricing. If you don't have VectorVest RealTime; then visit www.vectorvest.com to watch a fascinating display of Stocks You Should Know About.