Investment Foundation: Date 11/4/2010
Main Speakers Scott Martin (Trader from Washington state, former Safeway exec.), Scott Conner (TOS)
When the market is going in an Up direction 75% of the stocks follow.
When the market is going in a Down direction 90% of the stocks follow.
80 to 90% of trading is Institutional Money (Big Money, Hedge Funds, Mutual Funds).
Never lose more than 1 to 2% of your total account in one trade.
Example: If you had $30,000 portfolio and a bought a stock for $29. Set you stop loss at $26.
Calculate Acceptable Loss = Total Account * Risk Percent
$600 = $30,000 * 2%
Calculate your risk: buy price – stop loss price
$3 = $29 - $26
Calculate the number of share to buy: Acceptable Loss / Risk
200 Share = $600/$3
Look at Drawdown Effect:
% Loss %Gain Required
10% 11%
20% 25%
50% 100%
90% 900%
100% Broke
Scott Martin’s goal is to make 1 to 2% each month. Take 12% to 24% a year, he feels 18% is a realistic goal to shoot for.
Learn to trade any market direction and protect losses.
Homework for tonight:
Work the retirement Calculator
Showed TD Ameritrade credits for moving assets over from another broker to TD Ameritrade, for every $10,000 in assets you would receive a $50 credit.
Deposit Discount
$20,000 $100 off
$200,000 $1000 off
$500,000 $2,500 off
$ 1 Million $5,000 off
$ 2 Million $10,000 off
The main speaker Scott Martin stated that he himself had spent $3000 to attend his one day workshop with Investools. Fred and Katie, two other elderly speakers stated that they spent $1000 to attend their first Investools workshop.
Different learning programs:
Pricing for Training levels: PHD Masters Associate
Regular Tuition: $30,286 $15,376 $5,796
Today’s work shop offer: $23,999 $11,999 $4,999
Subscription, Services & Tools: 24 Months 18 Months 12 Months
Fill out Designing my Financial Future
Showed a couple of examples of Stocks vs. option Trading
Showed a Spread Trade
Bullish Watch List Rules:
1.) Up trending stocks, or sideways trending stocks with volume of 1.5 times average (60 Days).
2.) Phase I (3 Green arrows)
3.) Strong Phase II (2 Green arrows)
4.) Up trending industry, sideways trending okay, not down trending last 2 to 3 months, 50% or half the stocks movement is tied to the Industry.
5.) Broke resistance (Ceiling) or bouncing support (Floor).
Investment foundation: Date 11/5/2010
The Big Chart:
Follow the sectors were Big Money is going into.
Bullish going red to yellow is best pattern. Several weeks of green means you might have missed the best entry period of the move.
Options have different risks then Stocks.
The Greeks: Delta, Gamma, Theta, Vega, and Row.
Trade: Short Put on OII with a strike price of 60/65 with an asked price of $1.30.
$5.00 - $1.07 = $3.93
If the stock currently at $68 stays above $65 for the next 42 days you would make 25% if the market goes up, sideways, or down (above $65).
Scott Conners:
Scott talked about the Mutual Funds to ETF converter with TD Ameritrade. Just enter in the Mutual Fund symbol and the four best ETF’s will be displayed. EFT’s have much lower commissions than Mutual Funds and you can sell covered calls on them.
BIDU Example: 85 % probability of making money on December Puts.
Sell 10 contracts of BIDU (current price of $110) at a December Strike price of $2.14, make $2,140 dollars of premium and if the stock stays above $98 you don’t even have to buy the stock.
Phase I Curb Appeal Score of 5 and up.
Phase II The Inspection Two green arrows, scores of F/E 3.25+, and Price Pattern of 2.50.
What is an average price of a home in Indianapolis the speaker asked? One guy yells out $350,000, the next guy says $190,000. In Marion County the Indianapolis Business Journal lists the average price of a house at $145,000 for 2008. In Hamilton County the average price was $240,000 in 2008.
Check News:
Check news on stocks you own every day. Check new on stocks on your watch list once a week.
To fail two things have to happen:
Bad news has to happen, and the stock price must go down as a result of the bad news.
Stocks take the stairs up and the window down.
People think differently:
Poor People Vs Rich People
Life happens to me I create my life
I want to be rich I expected to be rich
Procrastination Take Action
Blame Take Responsibility
Complain Focus on obstacles Focus on opportunities
Try = Failure Commitment = Success
Actual quotes used at the seminar:
Give a man a fish, feed him for a day, teach a man to fish, feed him for a lifetime.
It takes money to make money.
You may only have this chance once in your life.
How many people aren’t as far in life as they thought they would be at this point?
Think of your wife, think of your kids, think of their kids. Act today to build wealth for your family.
They had at least eight different Salespeople of every race group and color give testimonials on how Investools had changed their lives.
The two day workshop followed the 7 step investing formula:
1 ) Prepare to be an investor
2.) Protect your investment capital
3.) Start analyzing from the top down
4.) Conduct a thorough fundamental analysis
5.) Search for additional strong stocks
6.) Conduct a thorough technical analysis
7.) Manage your portfolio