159 thoughts on “Investment Techniques”

1. Mahesh Adhav October 26, 2005 at 4:13 pm

   I was googling for some reviews on Gorilla and came across this interesting piece of info.

   I’m not able to decide whether this is the right time to jump in the market.

   Any help/direction appreciated.

   Thanks,
   –Mahesh
2. Shawn November 2, 2005 at 8:22 pm

   Nice pick on the oil sands thing, David; I would be interested in hearing how it went for you.
3. David November 2, 2005 at 9:23 pm

   Hi Shawn:

   I was lucky enough to pick up a large block of shares in a private development stage company. In the grey market I am on a triple in 6 months. Back in the spring valuations on some stocks were plain silly. This one was going for about 7 cents per barrel of oil in the ground. Teck-Cominco just bought into a development stage project for $1.20 per barrel.

   I follow this area very closely and the best value among listed stocks might be OPTI Canada (OPC on Toronto, or OPCDF.PK). They are teamed up with Nexen, a well-run company in itself, and are in the development stage. The present stock price makes for good value in an NPV calculation assuming $40 oil, let alone a more realistic $60+ when the asset is actually producing. It was chopped down in the recent sell-off of energy shares to make it even more attractive than it already was.

   David
4. Shawn November 3, 2005 at 12:02 pm

   This thread is generally about GT, but does have “other techniques” in its jurisdiction and GT seems setteld, so I’ll offer this subthread: What kinds of questions should one answer for oneself before making investement choices?

   Here are my offerings; maybe “you” can share some of yours:

   What is the strength of the market?
   Should I be in the market right now? (cf David’s ideas above)
   Am I capable of meaningfully evaluating the credibility of sources?
   Am I a credible source?
   What is my position on the efficient markets hypothesis?

   The EMH has various versions from weak to strong, along the lines of: “One cannot consistently make windfall profits in stocks based on information.” For myself, I tend toward the strong version and I’m very frustrated by that. I end up basing decisions for trades on things like a large drop in price; I just bought DELL for example.

   Re: credibility, I could not evaluate GT based on its website. I don’t think anyone can. This thread was helpful to me because it had answers as opposed to just questions. I have more questions than answers, but I know risk is much higher the greater that imbalance. I hope this helps some of the folks who asked quesions above. if you can learn enough to be capable of providing answers of any kind, you can potentially provide answers of the profitable kind. i wish I was able to answer my own question about whether to get out of MACR last year; it went up 50% after I got out with a 70% gain. That gain was no different than winning at slots , unless you give me credit for my impression of MACR software.

   PS: Thanks for the tip David; I may jump on it. I saw some interesting things about innovative oil extraction methods in Forbes recently. i tend to think energy is a good focus, and you are an example where picking a well-justified focus and backing it up with careful investigative effort can put one in a position to make good choices.
5. David November 3, 2005 at 12:32 pm

   Shawn:

   If you are interested in buying into the oil sands area, please send me an e-mail at dcweb@shaw.ca. I have set up this address temporarily. I will send you two key reports on the area – they will be of great assistance to you.

   David
6. DIDCRYWOLF November 3, 2005 at 12:33 pm

   my advice boys is to stick to listed stuff. PK is pump and dump… TRY UTS-T it’s the real play on the tar sands called the Fort Hills project… Teck and Petro Can plucked in $1.35BB CDN to develop the property… stocks trades 2MM shares plus a dau and no funny biz of fakes trades like in Pink sheets.

   INVEST IN WHAT YOU KNOW, NOT IN WHAT YOU READ!

   My 2 cents
7. David November 3, 2005 at 12:58 pm

   Hi Cry Wolf:

   Hmm..How do you know about UTS? Presumably by what you read. Better not invest then.

   UTS may have a very good project with excellent partners, but the question is the value of the shares. A lot of opinion is that they are very overvalued at present. My suggestion was OPTI – it is listed on Toronto as OPC or OPC.TO. It does have a PK listing but the price is determined by Toronto activity. OPC trades about $13 Million per day and that is quite comparable to UTS, so I don’t see the manipulation issue.

   One more advantage of buying into one of the Oil Sands projects is that your investment is essentially in Canadian dollars and there is a good chance of appreciation against the US $. It doesn’t matter if you buy on Toronto or a US exchange – the advantage is still there.

   David
8. DIDCRYWOLF November 3, 2005 at 1:24 pm

   Well TS came to me at 1.90 from the personal money manager to thefounder of pengrowth… they seem to know their stuff in Calgary. I stuffed it in my locked-in RSP and I donèt plan on touching it trading or adding to it…

   I was a broker for 15 years and an investor by the age of 11 and I learnt quite early that 1)it’s better to be OVER-valued on a recognized exchange than UNDER-VALUED on a merky one…
   2) you can get leverage and equity in an account on a recognized account while you will not on a merky one
   3) I have yet to meet anyone that can say the guy that gave them a tip about a stock on a pink sheet is a real person, that they are neighbors for 20 years and that nobody got hurt…
   IS today the day? huuuuuuuuuuummmmmmmmmm.

   In good fun

   DCW
9. Shawn November 3, 2005 at 2:01 pm

   Both David and DidCryWolf are advocates of knowledge, it seems. There may be disagreement on some other issues, but not on that. I think we three all agree that a tip has marginal status on this criterion. I would add that a tip, being a potential decision, has a different character for its sender and receiver. So, David offers a tip and I say thank you. if he trades the stock, it’s not based on a tip, bat rather what he knows. If i trade it, it’s based on a tip and is little different from a dice roll in Vegas, unless i am confident of David’s credibility. if i read the report and triangulate with other information (preferably from neighbors, if I understand DidCryWolf’s advice), I might make a better decision. It’s the same stock, speculative for me, but perhaps not for David. See?
10. Larry M. November 7, 2005 at 5:00 pm

    Has anyone had any experiences with AnotherWinningTrade.com

    Thanks,
    Larry M.
11. Julian November 11, 2005 at 3:46 pm

    Hello all,

    I’ve recently begun taking steps into the investing/speculating world. My first two books were Bill O’Neill’s “How to Make Money in Stocks” and “Reminisces of a Stock Operator” by Lefevre, so you can get an idea of the investing method to which I have first been introduced. I signed up for an account at Marketwatch.com and with it came a free trial subscription to IBD, which I was ready to hop on anyway after reading O’Neill’s book.

    I saw in IBD the ad for GT and have signed up for the free subscription. I haven’t yet begun to by any stocks and probably don’t plan to anytime soon, just track what he picks and compare them to charts and some research to determine if they’re stocks IBD and CANSLIM would also recommend buying and if not, why.

    My question is this, as I see it referenced all over the place and still haven’t been able to quite nail it down on my own: How does one determine the buy, or “pivot”, point of a stock? When determining this, do you look at a blend of daily, weekly, and/or monthly chart depictions? I’ve noticed that some stocks forming base patterns in a weekly chart view don’t look quite as attractive in the monthly and vice versa.
12. David November 11, 2005 at 4:03 pm

    Julian:

    Look at this article, and also make use of the whole Learning Center.

    David
13. Scott K November 15, 2005 at 2:08 pm

    I just received a letter from a lawyer representing Gorilla Trades. In the letter it was stated that I am “using the forgoing trademarks on [my] website to advertise and promote [my] own service, namely, providing informational literature to the public with regards to blogging, computers, google, the internet, investing, politics, [etc, etc.].” (It appears they made this list from the categories on my blog). From now on please reference GorillaPicks only generally and not with a specific ticker symbol. Thanks.

    As you can read at the top, I have also put in a disclaimer stating that my freedom of speech rights allow me to state my comments regarding GorillaTrades. Supposedly, the use of “the trademarks ‘GORILLATRADES’ and ‘GORILLATRADES.COM’ in metatags and buried code on [my] website is an infringement of [Gorilla Trades’] trademark rights because it is likely to lead to initial interest confusion in the trade and among the public who are familiar with the marks and who associate the same exclusively with GT.” I checked my metatags and have no mention of GorillaTrades in them. The only reference to GorillaTrades is within the webpage itself; I am not burying code in my website. I believe that they are mad that a search for Gorilla Trades on Google leads to my site as the 7th search result (on 11/15/2005).

    The lawyer stated that “Brookfield Communications Inc. v. West Coast Entertainment Corp.” sets a precedent for their immediate demand for me to cease and desist any further use of the GorillaTrades’ marks.

    I am sending the lawyer a letter saying that I have removed the offending list of stock picks. What else would you recommend? Thank you.
14. DIDCRYWOLF November 16, 2005 at 12:05 pm

    Scott,
    the fact that the gorilla had his lawyer sent a letter is a proof that all is not well with those guys… If you can’t even discuss a service then maybe time to move on to better and more open minded timing services…
    Anyways the info becomes stale after a few days so there is no reason why you can’t do forensics on old trades…

    P.
15. Bert L. November 26, 2005 at 10:29 am

    For those of you that are skeptical about Gorilla Trades, I would say the results speak for themselves. While the gorilla and the bananas are cute and fun, the format of the service and the performace is what gets my attention. I have been using the site for about a month. The 3 stocks I have purchased from their list are up almost 9% in that period. Granted, the market is up nicely too, GT picks has helped me to ride the wave. What is great about Gorilla Trades, is that they pick stocks to watch, allow them to trigger, and then require them to confirm that trigger with price and volume. If you purchase that stock, you know the entry point, the stop loss, and a 2 suggested exit points. Then you just monitor where the stock is based on that criteria, and react accordingly. They give you an Excel spreadsheet that shows the triger and confirmation points, stop loss, and exit points. It is all laid out very clearly, which allows you to act on good current information. I have looked at or used over 100 sites, and the Gorilla is certainly on eof the best.
16. David November 26, 2005 at 10:56 am

    Bert:

    “One swallow does not a summer make”

    With all respect, come back in a year and tell us your results. What you have so far means absolutely nothing. Since mid-October the S$P 500 has moved from 1175 to 1268, that is an increase of 7.9%. The NASDAQ 100 has gone from 1530 to 1700, that is 11.1%. In Mid-October, you could have bought QQQQ (proxy for NASDAQ-100) for $38 and it closed at $41.89 yesterday, gain 10.2%. Take the trouble to study the monkey’s actual records going back over the last two years – I did, the results are in this thread and are mediocre.

    David
17. Scott December 5, 2005 at 1:14 pm

    I just checked the “junk mail” folder of my email client just because I was curious about what was in there. By an large, the biggest email spammer in the bunch was GorillaTrades. There are dozens of all-caps, hyper emails screaming “ONLY 48 HOURS LEFT TO REGISTER” and related nonsense. So sad.

    Funny, I didn’t happen to find any emails from Peter Lynch or Warren Buffett begging for my investment dollards…
18. Phil Cawthorne December 6, 2005 at 3:19 pm

    My experience with GorillaTrades has been good overall, there are ups and downs, but there are those with the stock market. Anyways, my strategy has been when the markets bad or trading sideways, I’ll be much more selective about any trades, though when its up (as it is now) I’ll trade their picks pretty liberally. With this strategy, GorillaTrades is a monster! Totally gives me the leverage I need to churn some serious short term gains.

    Just skimming over this page I’m amazed at how many people totally throw the baby out with the bathwater in this case. Complaining about picks is wanting them to become your money manager – they’re a newsletter. Complaining about emails is as easily solved as opening one up and hitting unsubscribe.
19. Manish December 7, 2005 at 6:28 pm

    Here are some highlights of the analysis I performed back in Aug. I decided not to pursue GT after this, and also eventually gave up on the idea of selling a report based on the following analysis. But I think I owe this to the amateur investing community and boards such as this from which I have gleaned a lot …

    Approach/Assumptions:
    1. Looked at all GT recommendations for a period of slightly over a year (361 recommendations, 288 completed trades with almost complete data, 266 trading/383 calendar days).
    2. Assumed that I bought every single recommendation that was triggered (not confirmed). I am not recommending thismethod – just reporting results in the aggregate.
    3. Assumed that my buy price is the opening price of a stock the next trading day after it is triggered in the daily GT email.
    4. Assumed that we sold at 1st target, 2nd target or stop-loss level as recommended (at the specified price, i.e., no slippage was considered).
    5. Assumed that we sell/stop a stock on the date and price the Gorilla reports (assumed that you have limit/stop orders in place and update your stop loss levels as the Gorilla recommends every Monday).
    6. Cost of GT subscription and trading commissions are not included.

    RESULTS:

    A. Stocks Up/Down
    – Of the 288 completed trades, 185 (64%) were stopped out on the down-side. Only 103 (36%) stocks made it to the first target.

    B. Correlation with the S&P500 Index
    – After allowing for the portfolio to ramp up (about the first 5 weeks), I looked at the correlation of the number of open positions with the S&P index. (Note: this is not performance relative to the S&P).
    – Coefficient of correlation = 0.88. The rise and fall of the portfolio size (i.e., all open positions) is amazingly similar to the S&P. This is perhaps not surprising, but it does highlight the fact that the portfolio offers very little downside protection.
    – Over this period, if you bought all triggers, your portfolio size would vary from a low of 25 to a high of 76 open positions (average of 51.4 holdings). So this volatility precludes the option of buying into all recommendations from a practical standpoint.

    C. Segmentation of Recommendations by Risk Rating
    Risk Rating Count % of Total
    1 0 0%
    2 22 6%
    3 116 32%
    4 156 43%
    5 59 16%
    Unknown 8 2%
    Total 361
    Average rating 3.7

    – Almost 60% of recommendations had a risk rating of 4 or 5. So if you are a conservative investor, the GT system is definitely not for you.

    D. Holding Period and Turnover Ratio

    – For the 103 completed trades that made it to the first target:
    Avg. holding period from purchase until first target: 30.1 (calendar) days
    Avg. holding period from first to second target: 53.0 days

    – For the 185 completed trades that were stopped out:
    Avg. holding period until stopped: 31.3 days

    Overall average: 49.9 days
    Portfolio turnover rate: 732%

    E. Stock Price “Slippage” After a Stock Triggers
    – The Gorilla has been chided for including stocks and calculating gains in its portfolio based on the opening price on the day the stock triggers, despite the fact that subscribers cannot purchase a recommended stock until the market open on the next trading day.
    – Over 357 stock purchases (triggered), you would have paid, on average, 0.81% more than what the Gorilla paid and lists in his portfolio if you bought the stock at its opening price on the next day.
    – With a turnover rate of 732% for the portfolio, this slippage factor is 5.7% on an annualized basis.

    F. Performance Analysis

    – Recap: 103 (35.8%) made it to first target, 185 (64.2%) were stopped out.
    – 113 positions (39.2%) broke even or were positive for an average gain of 8.9%. This number is greater than the 103 above because of raised stop losses.
    – 175 positions (60.8%) lost money with an average gain of -6.5%

    – Net result: Average gain was -1.0% per trade before commissions (or -7.32% annualized).

    – Performance relative to the S&P: When a stock was purchased, we looked at the S&P open since the stock was purchased at market open. When a stock was sold, we took the average of the S&P’s open and close values on the sell date. The above 288 trades then trailed the S&P Index by 1% (i.e., the S&P was essentially flat over this test period).

    – Gain and Holding Period by Risk Rating (completed trades only):
    Risk Rating Count Avg. Gain Holding Period
    1 0 – –
    2 15 0.4% 48.7 calendar days
    3 91 0.1% 56.4 days
    4 128 -2.6% 44.8 days
    5 46 0.5% 52.3 days

    – Selling at first and second target: For the 103 stocks that went on to achieve their first target:
    * Strategy 1: Sell 75% at 1st, 25% at 2nd target (as recommended):
    Avg. Gain +8.9%, Holding period 83.1 days
    * Strategy 2: Sell 100% at 1st target:
    Avg. Gain +10.1%, Holding period 30.1 days
    * Strategy 3: Sell 100% at 2nd target:
    Avg. Gain +5.5%, Holding period 83.1 days

    So if you sell 100% of your stock when you reach the first target, you will come out ahead by 1.2%. And the gains will be even better compared to strategy 1 since you now have fewer trades per stock (2 trades in strategy 2 or 3 as compared to 3 trades in strategy 1). So it definitely doesn’t seem to pay to hold on to a stock until it reaches its second target, based solely on the Gorilla’s recommendation.

    G. Impact of trading commisions
    – Stopped recommendations result in 2 trades. Stocks that hit 1st and 2nd targets result in 3 trades under strategy 1. On average, therefore, you would have had 2.36 trades per recommendation.
    – So if you assume a commission of only $5/trade and invest $1,000 per stock, you would have chipped at 1.2% of your profits (i.e., a net gain of -2.2% or over 15% annuallized).

    H. Some Info about Confirmed Stocks
    – Of the 288 trades (excluding 8 “unknowns” for which we couldn’t determine the confirmation date), 218 did eventually confirm, while 62 did not. Thus, upon triggering, a stock is 3.5x more likely to confirm than not.
    – Also, 50% of the confirms were seen to occur on the same day or on the very next day that the recommendation triggered on. For all 280 trades, it took, on average, 5.3 days for a triggered stock to confirm (if it did confirm).

    As I stated earlier, I really wanted this system to work. But it doesn’t seem to – at least not over my sampling period above and as a total portfolio based system. I am sure there are many who are able to sift through the Gorilla’s recomendations and use it to their advantage (as Phil C. above does) but its aggregate results do not inspire confidence.

    Adios to the monkey…
20. Scott December 8, 2005 at 11:07 am

    Manish,

    I can’t thank you enough for your research. Well done!
21. DIDCRYWOLF December 8, 2005 at 4:14 pm

    Thank you do much for your work…
22. Larry M. December 9, 2005 at 10:26 pm

    Manish,

    Thank you very much for your work and publishing it here.

    I was looking into Gorilla Trades before I found all of these comments regarding it on this blog.

    I found this blog when I Googled Gorilla Trades.
23. Roger B. December 9, 2005 at 12:00 pm

    The comments above are excellent and represent a nice mix of satisfied GT subscribers and others who researched GT thoroughly and passed. The most compelling comments come from the research that Manish put forward. I did similar research (actually back to the first trade in the GT historical database) and my findings confirm his. Unfortunately I did my research only after I subscribed to GT and started to see a pattern in my own trades that wasn\’t easy to discern when looking at the raw data in the GT historical results.

    The raw GT data is pretty impressive. If you compute the results of all confirmed full-circle trades in the GT historical database (at least as of June 2005 when I did the study) the annualized return was about 44%. Even if you lop off some net return for the slippage between trigger and confirmation that Manish and others mention, that\’s not bad. My reason for jumping in was simple, if I could do half that well, I\’d be delighted.

    Unfortunately, I\’m not delighted. The first flaw in the GT system is in the devastating affect of the sheer number of losing trades. For a service that purports to provide ideas with an excellent chance of success, recommending losing trades about 55% of the time doesn\’t meet that definition. I found that the annualized loss for these trades was 222% and the weighted annualized loss was nearly 88%. The trades that break even or made a slight profit (either because they stopped out or made First Target but then stopped out) made up about 8%. So one could argue that either bad things happened and/or good things didn\’t happen 63% of the time. And 63% versus the general stock market performance isn\’t encouraging.

    Now here is an interesting finding concerning stopped out trades! By merely extending the stop loss to an artificial 20% below trigger, the stopped out trades recovered to the trigger price nearly 80% of the time, often within days. If you then sell near the trigger you at least broke even. This one strategy alone could reduce the losses of the GT system to 123% annualized and 68% weighted annualized respectively even after adding a cost of money of 3% to wait for the recovery and taking the 20% loss on far fewer trades.

    The second major flaw is waiting for the Second Target. Manish\’s analysis is excellent but I would add one more comment. I found that the Second Target was only achieved about 8% of the time. But the times when a trade stopped out for a loss relative to the First Trade selling price happened about 15% of the time (or about 53% of all trades after First Target is met). If you take into account the opportunity cost of missing the First Target on the entire first sell, I found that the 25% kept in the position for Second Target averaged about a 44% annualized loss. The purpose of the Second Trade is merely to add window dressing to the GT daily emails, nothing more.

    A third flaw is not considering news about a company. Of the trades I had the worst time with, earnings season was the biggest problem. GT recently added a colored highlight to their Excel spreadsheet that lets you know there may be trouble ahead but my recommendation is always sell and never buy a couple weeks or so before earnings are to be reported. Otherwise it is just like playing Russian Roulette. Unfortunately, this substantially reduces the number of candidates for purchase.

    I came up with an overall 1.1% weighted average return and a .5% weighted annualized loss so that\’s pretty close to Manish\’s results. By the way, Manish is being generous in his analysis of commissions. Most individual investors will have a hard time finding quality execution for $5.

    And now some comments about GT trigger versus confirmation prices. My understanding is the trigger price, stop loss and confirmation area volume is set in advance and revealed in the \”New Potential Buys\” section of the daily emails. It really doesn\’t have anything to do with an open or closing price of the day. If an investor is willing to watch the market like a hawk and is willing to forgo the insurance policy of confirmation, he definitely can buy a stock at trigger as it happens. He can even buy confirmed picks at or near trigger if the volume area is met around the same time which happens fairly often. But this isn\’t the lifestyle of most individual investors. GT\’s use of the trigger price for returns comparisons is certainly \”fair\” but not especially realistic.

    And finally I\’d like to make a comment about CAN SLIM coming from someone who has used IBD and Daily Graphs for many years and holds IBD founder Bill O’Neill in high esteem. IBD has made huge strides lately in distilling data down to where it can be used. The IBD 100 and the much improved quote/news, stock check up and charts services on the free website are a huge benefit and I still use them every day. I would also agree with the comments in this thread about how logical and well thought out and thoroughly documented the CAN SLIM system is but it too has three major flaws for the individual investor. One is the necessity to be prepared to buy at or near the pivot price just as a breakout occurs. If the price goes more than 5 to 10% over pivot, you\’re not supposed to buy. This can happen in a matter of minutes during a breakout. For most people with jobs this is untenable. The second flaw is the huge amount of time it takes to find potential buys. The IBD 100 will show you how charts should look after they\’ve done well but to make money, you need to find stocks BEFORE they make the IBD 100. The third flaw is the 8% stop loss. I haven\’t been able to do the same comparison I did with GT but I have had many stopped out CAN SLIM trades that not only recovered my buy price but went on to make very nice returns merely by letting the stock go below the 8% stop loss.

    As a result of all this disappointment, I\’ve been looking at CSSGX, the new no-load CAN SLIM mutual fund. It may be the solution for all of us.

    Happy investing and I wish you all a Very Merry Christmas.
24. Ben Jones December 16, 2005 at 6:21 pm

    I first found out about GT a few months ago in one of the many investment magazines i read. I was very interested in what the ad had to say, but i left it at that. A month later, I read about the program again online and it sparked my interest to where i got the free month subscription. I stopped it a week later, but not due to losses or anything, that timespan is surely to short to make a wise decision. My reasoning is I believe i can find just as good of info for myself for free. The problem is it takes alot of time out of my schedule to do that sort of research. Being in the military, such as myself, and numerous other american jobs keep us on our toes so much with our hectic lifestyles of working overtime,overseas, kid’s sports practices, etc. that we simply do not have the time to do the intense research that investment gurus do for their own living.
    This is what businessmen know, and they capitalize on it…. its no secret, this is the american way and its been that way forever. What the truth is, we dont care. We like it this way….. its less stress for us to put the weight of our financial decisions on someone elses shoulders.
    This is what GT does.. it picks the stocks for you and does all the time-consuming dirty work. The thing that made me cancel was the high cost of this work that they will do for me What I do like though, is how GT gives me set prices for entering and exiting, stop losses, etc. Ive studied the trigger stocks that they pick, and the charts all have extremely similar characteristics. They are stocks that have shown some resistance for a while and just broke through their average ( I believe GT uses a 21 day moving average.) Alot of advisors will tell you that volume movements and the MA will tell alot about the likelihood of a stocks price going up or down, such as is it above the MA, below it, just touched it, on its way up, and volume such as the amount being bought or sold in a day. You can correct me if im wrong, but i believe candlestick charting goes off of that. I am in now way a professional , and my knowledge is maybe a little more or about the same as the average investor, but one thing I do know is that there is no program in the world that is foolproof and 100% correct.

    I think everyone here is missing the point, at least partly. I am in no way sponsoring GT, IBD, Americanbulls, or any other investing software, but i do believe you guys are being harsh. In every article ive read, any ad, any facts or info about any investment vehicle in any shape, or form, such as stocks, bodns, funds,programs, etc… they always have ( in however small of print or location) that past performances dont guarantee the same in future results.
    GT runs of a computer, and everyone knows how perfect computers are.. same thing goes for humans. But one thing that humans do have over computers is logic and reasoning. One thing that computers have over us is the almost endless computing and analytical skills it can produce much more efficiently than us.
    What Im getting at here is that you simply cannot be a machine yourself. So GT tells you to buy this stock at this price and sell at this and if this happens do this. If you do that, you are a tool. The sensible person takes this info, that in no way is wrong or right, and uses it… but smartly. What you do is investigate further into that company it suggests. Is it in a currently good performing sector, is it in a possible future-good performing sector? Is its P/E reasonable, what do the current earnings statements say about the company… does the yahoofinance analysts rate it as a 1-5 (buy or sell)? Whats the current news on the company?

    If you see what im getting at is that these programs give you the ideas… they help cut out the BS that you must go through to stockscreen,scan, eliminate, sweat over, compare, blah blah blah. The common average american cant do all of that. We have alot more important things to worry about like getting our daughter to school on time and spending time with the family. Sure, I may get some time now and then to do a little extra reading on the weekend or later in the evening, but definately not more than 30 minutes to maybe an hour a day. Some of you may say that maybe i should just pass it off to a professional to handle my portfolio, but simply i dont trust them nearly as much as myself because its my own money, and the fees they charge would cut out all of anything i make.

    My strategy is this….. I use GT for ideas, not ALL of my picks, i find some good ideas out of investment magazines, my uncle has a valueline subscription that i get ideas from now and then, wallstreet journal, etc. And I invest about 30-40% of my money in these shortterm picks. the rest is in my longterm portfolio consisting of etfs and bonds tracking the market as a whole and i have one REIT ETF.

    The picks i get from GT or any other info, I dont jump on it as gospel, i look further into it with yahoofinance, which is a great free site, briefing.com, and sometimes other info. I look into the statistics of that company such as the MA,P/E, any news and earnings statements of the company, and anything else worth looking at about the company. If i find it to be a good pick, ill look to enter into that pick. One thing you guys are missing about the GT program is they now have a lightvolume pullback page, that shows which current picks are showing signs of a market pullback in price. people familiar with swing,day,and trend trading are familiar with the concept of buying into the stock during these times. GT even says that it is unwise to buy into a pick right when it hits target, rather look for a more profitable opportunity of a short pullback.This sort of research takes usually less than an hour to do, and that is something that i can manage.
    To people like me with a busy schedule, entering into a position during the day is impossible most of the time, so placing trades at night to enter in the following morning is the most likely time to occur. This sucks, because usually the most volatile time is in the morning, mostly because of this reason that most people trade during the beginning and end of the day. The way i help alleviate some of this on my picks is on Ameritrade i use the tradetriggers system. I enter in the info and the limits that i want on my trade, and it will place the trade for me if it happens. this way i can remain active during the trading day even when im not logged in.
    No GT, is not perfect, by no means. Neither is any other investment technique. What people are looking for is a foolproof easy to use system that costs next to nothing and does all the work for you. You cant do this and be successful, you need to do some research of your own for sound decisions, but screening/ stockpicking systems do help.

    Ill go out with this comment: nothing is 100% guaranteed to work, even warren buffet has had losses in his career, but what works is finding a system that works for you. My system is using the technical analysis of sites and screeners such as GT for finding picks with good upward trends, and combining it with solid fundamental research
    and background. After finding a solid,sound system that works for you, whats more important is sticking to it.. the market goes up and down, and just because some people lost out, which happens in everything, doesnt mean it dont work.
25. David December 16, 2005 at 7:22 pm

    Hi Ben:

    GT claims excellent results. They conceal poor results by sweeping a ton of losing trades under the carpet, and blare the trumpet about the successes on a daily basis. There is plenty of data presented in this thread that reveals the mediocre performance. A ’secret recipe’ sold for a high price should deliver more than this. Many of us take issue with the monkey in particular, because of his blatant deceptiveness.

    If it is picks that you need and you are prepared to do some work, then there are cheaper alternatives. The Growth Stock Report (link at top of this page) presents good quality picks that are an excellent start for anyone prepared to do some work themselves. It’s free and has the portfolio of the site author, so that you can judge for yourself. I have no connection to the site.

    David
26. Mac January 1, 2006 at 1:42 pm

    Hello David,

    I came, like many, upon this thread while looking into people’s experience with GT – idly, since my days of purchasing advisory services and systems are long past (the most embarrassing, expensive and disappointing among these being the Turtle system). While I’ve found your critique and comment (on GT and other topics) here to be very sober, lucid and helpful, and am especially intrigued by your interest in sector rotation and working in ETFs.

    I’m a long-time subscriber to IBD and a position trader. I’ve used much of CANSLIM to good effect over the years, and deploy alongside it a variation on Welles Wilder’s SAR (written before the unfortunate Delta episode) programmed in VBasic for Excel to give me a read on the indices, which it does very reliably (e.g., the system began forbidding new positions in April of 2000, cleared me out entirely by July 00 and didn’t let me back in until April of 03). I wait for both daily crosses and weekly confirmation before making any moves and I’m out of the market for nearly half of any year.

    It’s a pretty leisurely trading style, but as my schedule lately has allowed more commitment to it, I’ve been considering sector rotation and based on your experience recounted here think there may be a lot for me at Decision Point. I will be purchasing a couple of months to begin after the first of the year and wish to inquire after whether you might share your use of the site for sector analysis in particular. I’d be most appreciative.

    Happy New Year!

    Mac
27. Mac January 1, 2006 at 1:47 pm

    Heh.

    Oops. I just noticed at the top of the page a link to David’s “How I use DP” page, but that page does not appear to exist when I follow it. Please advise. 🙂

    Mac
28. David January 1, 2006 at 4:05 pm

    Hi Mac:

    I am happy to help with Decision Point. It has been successful for me. I don’t know whether you have looked over the free educational material on the site. It is excellent. In particular you must understand the ‘PMO’ (Price Momentum Oscillator) and ‘PMM’ (Price Momentum Model) in order to use DP successfully. In simple terms, the PMO responds to shorter term price movements and the PMM to the longer term. If you are interested in trading ETFs, DP follows 69 of them and publishes a daily report. On any given day, all are rated as Buy/Sell with respect to PMO and PMM. The PMO changes most often and generates signals: the most important would be those where the two agree, e.g. PMO turns to Buy and PMM is in a ‘Buy’ as well. These signals are not to be taken literally and are an indication to review the chart of the ETF and examine the setup. For instance, consider EWJ (Japan iShares) which began a bull run in early August and had a pull-back between late September and mid-October. The PMM was in a buy all the time, reflecting the underlying trend. The PMO turned from buy to sell at the beginning of October and back to buy at the start of November. If you had seen that ‘Buy’ 41 trading days ago, it looked like a decent opportunity to get into the fund, given the nice underlying trend. I did via a T Rowe Price proxy fund and have done well. On the other hand many signals are generated when the underlying is in a trading range and this is apparent from the chart; PMO might be drifting sideways with a number of buy and sell signals generated, none of which are tradeable. The best signals come at the end of a prolonged clean move and this is well-described in the educational material. The funds have pretty good sector and international coverage, but one hole is gold company shares. That may not matter to you, but is a limitation for me. Right now, the trading opportunities are few since the majority of ETFs are US based: most of these are in a PMO sell and a PMM buy, not a good setup for shorting. The same type of signal is available for each of about 465 stocks on the US exchanges, so one can look for favourable sector signals and then look for a good individual stock. Another nice feature would be the ‘Chart books’. These cover all of the major sectors. For instance, there is a book for the ‘GMD’ index, which includes gold mining stocks. A small chart for each of the stocks in that index is included and they can be reviewed in two web pages. Best of all they are organised according to PMO strength. So if you like that sector, you can see the stocks with best momentum at a glance and begin further research.

    For me DP is a perfect fit with my investing philosophy. My belief is that the very best returns are made from being in the right sector at the right time. For much of the past decade, the general markets have been great and broad index investing was successful. If markets go sideways from here for a few years, the sector approach might do well and DP gives you all the information that you need to profit. If you join up and want to exchange ideas, drop me a message at dcrosspc(at)yahoo.com.
29. Vasu January 8, 2006 at 2:54 pm

    Hi all:

    Thanks to many of you and especially Manish for the info about One-who-should-not-be-named. Couple of thoughts.

    a)The idea of paying hundreds of dollars to some service or site is primarily for not having time to do the research and (for some) not having a proper strategy. If, after the subscription fee, we are expected to do more research (or else face closely correlation with market), then what’s the point. It only shows that we might look elsewhere (index fund?).

    b) Being an IBD reader myself, I have one concern with the CSSGX. The major advantage an individual investor has over biggies is the flexibility in trading. How can a mutual funds cut loss @ 8% or sell when 20% target is reached. Or follow the M part of CANSLIM. Only way this mutual fund is going to make money is by using partial CANSLIM criteria (like maybe EPS rating and cup and handle, but then buy and hold until a sell decision is made(maybe based on some other criteria)).

    It would perhaps be more advisable to research 20 stocks with good EPS rating and maybe buy using sharebuilder[which is one thing I am seriously considering].
30. David February 8, 2006 at 3:19 pm

    Hi Vasu:

    The CSSGX has had a short life so far, and a rather rocky start. Overall, it has slightly underperformed the COMPQ (NASDAQ composite). It will need much longer to tell if it might outperform the index. The chances are that it won’t, since less than 20% of funds do. It can only remain nimble by being small.

    Your point about the monkey is dead on.

    David
31. Geeh February 6, 2006 at 9:01 pm

    Thank you all!!!……for keeping me from monkeying around…
32. Jesse March 14, 2006 at 6:48 pm

    Hi everyone! I am a novice investor looking to get into day/short-term trading (holding 1-5 days), and am looking for a screening program. I have been looking into Vector2000 (www.vs2000.com). Can anyone give me any advise on this company/website? They look good, but the subscription price is high, even though they claim to only charge based on how well their picks perform.

    THANKS!!!
33. Jim K March 29, 2006 at 9:41 pm

    Thanks to all for the info & opinions in this thread.
    From the sound of it, you have happily steered me clear of some major monkey business..
34. dean April 24, 2006 at 7:21 pm

    Looking for mathematical formula help replicating Investor’s Business Daily’s PMO (price momentum oscillator) – IBD publishes the results for commodities daily – I would love to replicate the formula to apply to equities – could be the holy grail of indicators. Decision Point PMO is close but no cigar. IBD’s PMO is far and above the leader. The closest I have come is Full STO (14,5,6). If you can help, please contact me: dean (at) pmrco.net
35. John August 24, 2006 at 3:42 pm

    I did not see if any one said anything about AnotherWinningTrade.com They keep sending me stuff. I am looking to see if any one has used them and how it went.
36. usdollar September 10, 2006 at 11:34 am

    Read this blog with great attention. Thanks for saving me those 600 usd. David- how’s that oil thing going now with the prices going down?
37. David September 11, 2006 at 2:37 pm

    usdollar:

    That ‘oil thing’ is heading for a great buying opportunity as the gloom and doomers onerdo it yet again.
38. David Sambora September 18, 2006 at 8:00 pm

    I’ve been using karibbeankid.com, 1st pick for August is up some 50%, only about 3 picks a month are released though.
39. Ronnie G. November 18, 2006 at 9:08 pm

    Might want to check out http://www.theinformedtrader.com. They had a strong month in October.
40. Ryan Sinclair December 13, 2006 at 1:25 pm

    I’ve been using BreakoutWatch.com to both pick stocks and use their Sell Assistant to know when to sell the stocks.

    I think the market is going to drop in the next few months, so the breakout watch sell alert helps get out with my profit intact.

    I looked at the 2006 numbers and breakoutwatch correctly predicted the midyear drop and had most of their stocks take a profit prior to the drop.

    They charge a nominal 9.95 for a month trial (Other sites have free trials but next thing you know, they’ve charged you because you forgot to cancel) This site charges you the $9.95 but if you don’t do anything, they DON’T charge you anything more.

    Tradewatch is what I like. Because I’m still asleep when the stock market opens, I can do my due dilligence the night before and put in a stop-limit order on a stock that is likely to breakout. That way, the process is automated. Then I put in a sell alert so that I get email if the sell signal sets in.

    This URL gets you free Tradewatch if you sign up for the trial:
    http://www.breakoutwatch.com/newUser
41. Dave January 31, 2007 at 3:48 pm

    LooseChangeOnline.com is by far the best website and newsletter for daily picks that I’ve stumbled across in years. Their profits are much greater than the Gorillas and they also have stop losses in place. The best $99 a month I’ll ever spend, I just don’t understand why they don’t get the following of the Gorilla, I guess because they don’t advertise anywhere.
42. Howard March 29, 2007 at 9:16 pm

    NorthStar StockCompass http://www.northstarstrategic.com looks interesting.
    They manage a diversified portfolio supposedly with an emphasis on risk-adjusted returns. Their site is low on polish but may be that’s good?
43. psychnet April 15, 2007 at 1:37 pm

    I just reveiwed GT’s 1697 trades listed from 4/03-4/07. I took out errors in their spreadsheets. I used their published
    trigger price and sell price. I calculated for 75% of target 1 P/L and time and 25% for target 2. I also examined the results for target 1 only. The accumulated totals:

    Target 1 +2 Target 1 only
    4/03-4/07 P/L 4132% 4091%
    Total trade days 61297 50926
    Annualized P/L 24.60% 29.32%
    P/L per trade 2.45% 2.42%
    Avg length 36.3 36.3 30.2

    No comiissions or slippage were calculated which might lessen these results. In addition, it’s still not clear to me if the trigger price issue vs realistic entry dates as was debated earlier in this thread was resolved.
44. alexmax49 April 21, 2007 at 9:04 am

    Has any body tried using worden’s tc2007 to confirm GT confirmation picks?
    It works pretty well, just relaying solely on GT’s picks does not work.
    I’ve being playing around wit tc2007 and using it to further screen picks from GT, IBD and other sites. So far I’ve gotten to the point where I’m finding good candidate stock that look great technically and fundamentally healthy, but if they don’t move my way, my orders don’t get filled and I don’t loose any money at all. If my orders do get fill I’m able to lock-in between 5%-10% within 2 weeks.
    Just going back and reading through all the posting, everyone wants a holy grail for trading stocks, but if you’re not willing to put that extra effort on research and further screening, You’re just buying stocks based on someone else’s advice. Some one who gets paid regardless whether you make or loose money.
45. esp April 28, 2007 at 2:31 pm

    Just a quick question: I’ve downloaded the aforementioned spreadsheet for GT and for some reason, mine does not contain any visible formulas for the calculated fields, nor do the macros work. What have I missed?
    BTW: following all these threads with great interest.
46. Scott K April 28, 2007 at 3:39 pm

    I’m not sure why the macros aren’t working (are you using OpenOffice?). It is still working for me… In order to make the formulas visible and editable you have to unprotect it. The password is blank. I did this so as to make it cleaner and more difficult to accidentally overwrite an important formula. Let me know if the macros still aren’t updating after you have entered some data and then closed and reopened the spreadsheet.
47. esp April 28, 2007 at 5:16 pm

    Yup, using OpenOffice, just downloaded for this spreadsheet. When I drop the protection, I do not get prompted for any passwords. I see no formulas in the cells anywhere. I have added a couple of stock entires (real stocks, just made-up information). Neither reload, nor Save/Exit/Reopen fires any macros. It just looks like an empty spreadsheet, except for what I entered. I can see the macros and I see what they should be doing, but they only seem to be “example” macros that are hard-coded to fetch Microsoft and RedHat prices. (Sorry to fill up this forum with techno-trivia.)
48. Teitan April 30, 2007 at 10:11 am

    I’ve just become aware of http://www.AnotherWinningTrade.com. It has been mentioned twice here without any resultant feedback. I may be wasting my time but I thought I’d ask if anyone knows anything about the website and its claims?
49. Ryan Mason January 27, 2008 at 5:25 pm

    Speaking of stock picking websites, I’ve done gorillatrades in the past with mixed results. Overall I think that they have a descent system, though hard for the average person to follow. On the other hand, I recently subscribed to http://www.shareplanner.com and they have done me pretty good so far. Over the past year, my returns beat the market, and that’s what i strive for. They provide daily swing trades, daily market analysis, longterm investments, short picks, and fixed income strategies and they manage the trade with you the whole way – I guess the good thing is, that they make it easy for people who can’t stay in front of their computer and trade all day long. But you guys decide for yourself, I’m just telling you of my experience, and if I say anymore I will sound like a marketing agent, and I’d like to avoid such an opinion.

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