scratch-mark

Alright, Knock it Off, Already

Those who follow the markets may have noticed that the last two days have been, well, shitty. Four times as many losers as winners yesterday, and twice as many today. My ‘watch’ portfolio of about 30 strong stocks was down all 30 yesterday and 28 of 30 today.  These are all strong companies and strong stocks, mind you. Here we have September as historically the worst month of the year for the markets, and I was up almost 15% during the month. And I’ve given it all back in the first week in October.

So, investors: the sky aint ‘a fallin’. Stop sellin’ already!

I only trade fundamentally strong companies and stocks, which means the company must have a solid track record of good earnings, stock price patterns that are sane with respect to those earnings, and score high with reputable analysts that aren’t merely shills for the investment bankers.

So, once I have my fundamentally strong companies, I use technical charting analysis to know when to get in, when to get out, and where to set stop losses. There’s a lot to this — more than you’ll ever even imagine unless you actually do it — but I like it because I learn something just about every day.

OK, so for those of you who take to schattenfreude, y’otta love these two disasters. I was actually in the black on both of these just two days ago, both on option contracts, and now I’m almost more than 40% down in both.

Here we have Unit Corp. (UNT). As you can see, I pick fundamentally good stocks. I began trading this in May. From $36 to $56 in 4 1/2 months (83%). Since the $50 support level didn’t hold (see the two previous bounces off $50 in September), I’m hopin’ that support at $48 will hold, as it did three times in August. If not, and I should know tomorrow, I’ll be gone.

Unt

And now for Noble Energy Inc. (NBL). $32 to $48 since May. There’s support at $41 (see mid August), but it’s only one bounce. On the other hand, the stock traded just below $41 earlier in the day before rebounding and closing a full $1 off it’s low for the day. But if $41 doesn’t hold, this stock is fired.

Nbl

For anyone interested in learning how to trade like the pros, check out INVESTools.

Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More

20 Comments

  1. Kyle Bennett on October 6, 2005 at 21:46

    Good week to buy. I finally have a little tiny bit set aside to start playing with. Rich, can I email you for a few pointers (not stock picks – I'll probably start with index funds, maybe SPDR's or the Q's – but questions about mechanics)? It's my first foray into the markets since buying a couple of gold calls through a friend just before Y2K. Damn British central bank dumped a load at the last minute and left me just barely out of the money.

  2. mojotek on October 6, 2005 at 20:12

    Aye aye aye… what a week for the markets huh?

  3. Rich on October 7, 2005 at 08:41

    Kyle:

    Sure. Drop me an email.

  4. Kyle Bennett on October 7, 2005 at 14:30

    InvestTools looks like a giant scam to me. It looks like you have to go to the free seminar just to find out the price for the course. There has never in the history of commerce been an honest company that does that.

  5. Allan on October 7, 2005 at 23:11

    It looks to me like a good we to sell. I posted that about a month ago.

    Maybe I am right this time.

    Allan

  6. Rich on October 8, 2005 at 20:14

    Kyle:

    That's a surprising comment, coming from you. Are you suggesting that InvesTools, a publicly-traded company, is defrauding customers?

    I would greatly differ with you about up-front pricing models. It all comes down to market testing, and price-points. We don't have the cost of our services on our website, and if you call, we're not going to tell you until we can maneuver the inquiry into an "enrollment" scenario where we are in control of the discussion. You can hang up any time you like, but we're under no obligation to do it any other way. For every guy like you we lose (very rare), we sign up 100 others, so it's a cost I'm more than willing to pay.

  7. Rich on October 8, 2005 at 20:15

    I should add that if we did have the price of our services on our website, my business model would support about 1 employee, if that, and not 30.

  8. TellItStraight on October 16, 2005 at 14:28

    I've seen posts all over the web asking for reviews of Investools, the investor education service peddled by Phil Town at numerous Get Motivated Seminars around the U.S.. Well I have some experience with this.

    I went to a Get Motivated seminar which is produced by Peter Lowe, and yes I signed up for the $495 workshop nearly a year ago. I presently subscribe to their Investor Toolbox website, but I am looking for a different vendor, perhaps Meta Stock, Trade Station, or OptionVue.

    I've learned quite a bit about Investools, their partner Success Magazine, and how they operate. So, If you have a few minutes, I'll tell it to you straight.

    If you go to the Get Motivated seminar and pay for the $495 workshop, you are going to attend a day-long workshop which is a production of Success Magazine which has partnered with Investools. Success Magazine wants to sell you lots of expensive training. The workshop is about half educational and about half hype. They teach you quite a bit about how to analyze stocks using the Investools website, but they spend half the day telling you that if you want to make the real money, you need to learn how to trade options, and that will cost you more, much more. It had a very infomercial, get-rich-quick feel about it.

    They have three educational programs, Basic Options, Advanced Options, and Advanced Technicals for the tidy sum of $4,000, $10,000, and $16,000. The way it works is, if you buy the upper tier packages, you get the lower tiers thrown in for the price. (By the way, I'm going by memory on the prices, I may be off a little in either direction, but I think I'm fairly close)

    I didn't purchase any of the programs. Rather, I bought books by noted options experts and technical analysis experts, Lawrence McMillan, John Murphy, Bernie Schaefer, etc. I read the books again and again, and then I started trading. I would do it the same way again. I only spent a few hundred dollars on the materials, and I suspect I got a more in-depth education. If I had several thousand dollars laying around, and if I was too lazy to do it on my own, perhaps their educational courses would be the way to go. As for me, I've got more time and determination than idle cash. By the way, I am profitable in my options trading.

    Here is the real problem with Investools/Success Magazine. If you don't pay for the education programs you don't get access to the "good stuff" on the web site. That's right! When you sign up for the $495 workshop, you get "Gold" level access the site which it turns out is the lowest level of access. If you buy either of the 2 lower tier courses ($4,000 and 10,000 respectively) you get "Platinum Access", which is a little better; But if you want access to all of the advanced technical indicators you've got to ante up with the big bucks ($16,000 or so). The selection of technical indicators that is included with the platinum and gold eccess is very limited.

    What's worse is that they don't tell you that you're not getting access to the full set of technical indicators. It's kind of like buying a car only to find out that you're getting it a piece at a time. First the wheels, then the engine, but if you want a steering wheel, pay up. It all has a very "used car salesman" feel about it.

    I can tell you about their advanced technicals because, for awhile, I had access to them. I didn't know I had access to something extra until they took it away. Apparently they goofed and gave me something they didn't intend to for awhile. Now I no longer have access to the indicators that I came to rely on.

    Also, the prices for education and subscriptions seem to be a moving target. They call you every now and then with the latest great deal on a course or website renewal, and the prices seem to vary quite a bit. During one sales pitch I learned that I don't need to spend the full $16,000 to get access to the advanced technicals, I just need to spend $1,995 for a book and a few dvd's. I wouldn't get the one-on-one coaching, but I would get access to the advanced technicals. No thank you.

    This is why I'm looking for a different vendor. I know MetaStock has the technicals I'm looking for, and I suspect TradeStation does too.

    In all fairness to Investools, they do have one indicator (which they claim is proprietary) that is truly amazing. They call it their "Market Forecast" tool. I have back tested it, and it accurately calls market changes for the DOW-30 and NASDAQ almost every time. This is my only hang-up about changing to a different vendor. I use the "Market Forecast" regularly to trade .DIA options and .QQQQ options with much success. Since this tool is available on their "Gold Access" I think I'll probably drop my subscription level down to gold and look elsewhere for the rest of what I need. If I ever find anything like Investools' Market Forecast anywhere else, I'll drop Investools for good.

    One more thought, Success Magazine is the cheap back door into Investools, but you get less. For example, you don't have access to the tutorial on how to read the "Market Forecast" with the Success Magazine version of the Investools site. This is another thing I was mistakenly given access to. (They seem to make a lot of these mistakes). When everyone signed up for the workshop and got their logins for the particular workshop I went to, we were all mistakenly given access to the full Investools site. It didn't take them long to realize they had made a mistake, and then suddenly I found thay the look of the site had changed from green to blue and from Investools to Success Magazine. They tell you that both sites are the identical, but that is not entirely true.

    If you're stuck on the idea of Investools, be sure to contact them directly and compare prices with the Success Magazine version and make them get specific about what indicators you get. Which tutorials will you have access to?, etc. (You have to pay extra for the tutorials, something like $59.)

    If I had it to do all over again, I'd probably still go to the $495 workshop, just because it got me started, but I'd still stick with the books, and I'd go straight to MetaStock or TradeStation for my real analysis software and data.

    Good Luck
    TellItStraight

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    • Craig on July 19, 2010 at 18:57

      The creator of the market forecast was Stephen Swanson. He has his own website at : http://www.themarketforecast.com.

      It is far better than anything investools has “copied” from him, and he has a very large following.

  9. Kimberly on October 28, 2005 at 21:09

    Thanks for the info tellitstraight. I recently went to the Get Motivated Seminar and signed up for the 1 day workshop. Of course it was offered for $995. If you are not interested you return the material and notes at the end of the class. I am vey unsure on what I will do. I am a novice investor and it seems like a no brainer program. I have 2 weeks to do my homework, so I can make an educated decision. Your info will certainly help me with questions on what my $995 wouldbe paying for.

  10. Rick on October 29, 2005 at 08:43

    I'm interested in InvestTools only from the infomercial I saw on TV. I usually am very skeptic about these pitches that seem too good to be true, because they usually are.

    To keep this short, I'm interested in trading and making better money than my govt TSP. However, I'm not ready to put in thousands to begin trading. What do you recommend? Should I even attend the free seminar InvestTools is having in the area?

    Thanks.

  11. Frank Maris on November 6, 2005 at 16:29

    Thanks for all the posts. Useful.

  12. SoCalTrader on November 6, 2005 at 23:54

    Some of the commenters above want to dance at the party but not pay the band.

    There's no such thing as free knowledge. Yes, as one of the commenters said, you can get the information relatively free from books–IF you take the time and effort to DYI (do it yourself). In fact, one of the principals of InvesTools wrote a highly acclaimed book on options trading:

    http://www.amazon.com/exec/obidos/tg/detail/-/0595176224/103-9749563-6259823?v=glance

    You can read the books and then invest your hard-earned money, or you can purchase InvesTools and practice, using their staggeringly useful analytical tools, with paper money. Of course, you can paper trade at OptionsXpress, too, at no charge.

    http://www.optionsxpress.com/index.aspx?CMP=KNC-Google

    I never begrudge anyone for selling their expertise. InvesTools is particularly aggressive in selling their expertise. Anyone is free to say "no" to their offerings, but the other less expensive sources for that information are hard to DYI.

    OF COURSE one must pay the cost of tuition if they want acess to InvesTools' extremely useful analytical tools. Why would they sell access to such a robust proprietary website for a pittance? Well, they won't. If, however, you don't have ten grand to lose, then don't do it. By "lose" I mean through your own inaction, not because InvesTools won't step up to the plate and help you, because they will.

  13. kelly on November 14, 2005 at 04:27

    I am very interested in starting to buy and trade stocks, but it seems very confusing with so much information out there. I would like to know what is a good way to begin and also if you could recommend a good financial firm that handles this kind of stuff. Eagerly awaiting any replies. Thank you

  14. kevin donahue on November 14, 2005 at 07:44

    OK, I've seen the thing on T.V. It's on every night it seems like. I played a little with the stock market when i was younger in grade school but that was with fake money. Now I am a first year college student at county. I barely work I have no money to invest I dont even know where to start. The buisness section of the paper may as well be in Turkish. The investools thing seems great but I dont kno how Im going to pay for next semester let alone a gamble that I dont have the money to back up let alone lose. HELP ME!!!!!!!!!!!!
    My e-mail is kevin_donahue@mymail.bcc.edu

  15. Jesse Biter on March 25, 2006 at 11:04

    I'm sitting in the class right now listening to Mike (one of the VPs) try to sell me on the program. The GET MOTIVATED class convinced me to come here today. 1/2 of this class is a sales pitch and the other 1/2 is exactly what was in the DVDs I got at the course. I don't know if I'm going to signup but there is no risk so I suggest people at least give it a try. You can leave at any time and get your money back.

  16. Pam Sargent on May 3, 2006 at 13:08

    I signed up for the class and now do not want to take it. Any ideas how to get my money back?

  17. Eric Bennett on May 16, 2006 at 00:21

    Playing the stock market has always intrigued me. However, I hardly know a thing about it. I saw the late night televised paid program on INVESTools and it only peaked my interest so I thought I would search the internet for some advice. I have the money to at least start at the $4,000 level. Will INVESTools actually pay off considering the amount of money it takes to get started? Will I make a good profit at this level? I'm afraid of wasting my time and my money so please, some advice would be greatly appreciated. I can be e-mailed at ebenn3@hotmail.com

  18. Andy on August 15, 2006 at 20:01

    I enjoyed reading all of your postings and have decided not to invest any more of my time with INVESTools. I understand how easy it is to see an option as being "the one". It will make all of my the financial burdens go away and I will be able to really love what I am doing. Not so. I suggest that if anyone wants to play with the stock market take classes at your local college. For the amount of money you give to others to help teach you how to gamble you can spend a lot less on classes. Teaming up with fellow classmates or the business instructors is a much more sound way to invest for the long run. My rule of thumb is that I should not have to lose money up front in order to make money and learn something new. Just my thoughts respectively. Think about it…

  19. Robert on November 1, 2006 at 15:31

    I attended a workshop in Anaheim by a former Investools workshop and found it quite interesting. He covers a lot of good stuff without trying to sell anything. The cost was only $299 for a full day workshop and I probably learned more than an Investools workshop, plus I didn't have to sit through all the sales pitches. I would recommend it to anyone. His site is http://www.investorjim.com

    Good luck!

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