I thought this morning that I would take advantage of the market sell off and buy some of the stocks that took big hits but were high up on my buy list. I put stops on SPAR, TIE and KRSL. I’m not feeling positive about my purchases after the market shot up nearly a percent it is back down to zero at 9:20 am. I think I jumped in a little too quickly and it may hurt me. Kirk said this morning “While things look positive in the early going, I'd be very careful when putting cash to work. If anything, strength here should be used to reposition and to reduce your risk exposure if you haven't already done so.” I should have listened.

BIG TIME SUCK

Another crummy day. The market took a big hit early on and I sold just about everything. I should have waited on TIE. I’m guessing it will come back by the end of the week. We’ll see.
This ended up being the worst day in 5 years for the market. Everything was off 3% or more. I lost 2%, so I did OK. I can’t be too upset about how I handled things. I would have come out better if I hadn’t bought stocks with unsettled funds so that I could have moved on things a little quicker.

A Sucky Day

Lost quite a bit today, but my ZZ #1 screen lost more. I had pretty tight stops on PCP and CRDN. They worked well for CRDN and we’ll have to see about PCP. I shouldn’t have jumped so soon into TIE and HDNG. I set stops at 15 cents or a little more. I had indications that the market was pulling back a bit, but I ignored them. That was my biggest mistake today.

Just Calm Down, Punk

I’m trying to calm my trading down a bit. I want to be able to go the entire week without managing my portfolio. It seems like the more I manage it, the worse I do. It isn’t necessary for me to do any trading on Monday morning. I can just set up stops (or limits) on Sunday and allow things to work out by themselves. I’d probably do better that way anyway.

Take yesterday for example. I jumped into KRSL after it had gone up over 10%. I probably could have got in at half that if I had a dumb stop on it. My emotions got the best of me as I saw the thing go near 13% (I’ve got to get in now before it heads to 20%!!) and then I watched the thing drop all the way back down to 1%.

I’m becoming much more disciplined in my trading and I think that has paid off very well. My goal should be to phase out my active trading so that I can manage things from another job. I think that will help me become even more disciplined.

UGLY

I don't know what ugly is doing over there at Uglychart. He seems to have designed some software to do the trading for him based on chart patterns. Where's the fun in that Ugly? There is still a lot to read on his site and I enjoy his sense of humor in a sometimes humorless obsession.

Friday was a bit horrible. AMK declined nearly 30% before 9:00. I saw the signs of it premarket. I had a bad feeling about things the night before and realized I should have sold. I had several reasons:

1. A gut feeling of impending doom
2. The stock no longer qualified(for me)on the MACD (it had just gone below 0)
3. Friday was the day they announced their financial results.
4. The stock had been sputtering for about a week.
5. The stock was so thinly traded (averaging about 24,000 per day) that I knew my tight (3%) stop probably wouldn’t work.

All of my nightmares came true that morning. The good thing was that I was able to hold on until late afternoon when the stock started to rally back. I ended up saving myself about 12% by waiting and not panicking. Things could have gone the other way of course, but I’m glad they didn’t. I learned a lesson with this one and I need to be more cautious next time.

Stick to my guns

Overall a pretty good week. A good call on GES, it continued to decline despite good earnings news (I will never understand the stock market). I stuck to my guns today despite things looking bad for a while. My system is working and I’m up around $6,000. The key is to not get cocky and shoot for those 1 to 2% gains each week and limit my loses.

I sold GES today after it went up 5% and then came down to less than a percent at 1:30 pm. I could have made more if I had left the 3% trailing stop in, but I figured it was going to hold with the quick 3% it gained at opening. The overall market was down, so that might have pulled everything down. Overall, I’m satisfied with how I handled GES as compared to CRDN. I kept it even though it dropped from the Zweig screen. Overall it made 21% during the time I held it. It made an extra 12.06% while I held it after it dropped off the screen. Good call, Scott. I bought TSS at 29.35 with the money from GES as Zacks upped the rating to #1. It had a 10% day yesterday so it looks like a strong pick.

I bought ACO this morning but had to watch for 10 minutes before the order kicked in. It was a mistake because I bought it after it had jumped 2%. It had volume around 100K so next time I need to be careful not to jump in too soon. I sold $1000 worth of AEOS as it had broken the 10% barrier. AEOS has moved to a Zacks #2. It’s still a strong stock and still on the Zweig screen so I will keep a wide stop on it. I put a 3% trailing stop on GES (no longer on Zweig's screen). The day ended up good. GES 4.12% and AMK 6.49% were my best performers. Overall I was up 1.59%. I feel good about the decisions I made today except for the ACO buy this morning.

What I Learned

Here’s what I learned this week. I kept stocks that were no longer on the Zweig screen because they were rated 1 or 2 on Zacks. My thinking was that the ZZ screen was pretty close on a monthly basis to the weekly rebalancing so I shouldn’t be too quick to drop a stock. This thinking was good as GES and CRDN took off on Monday. However, my mistake was that I didn’t put tight stops on the stocks and CRDN took a dive which I couldn’t pull the trigger on. It went on to lose Thursday big time. So the idea not to be trigger happy was a good one GES has done well, but I need to put 3% stops on them. I’m not worried about missing out through volatility. The stocks are no longer recommended so as soon as they disappoint, they’re done, but before that I’ll allow them to make me a few more bucks. If I had sold CRDN after it lost 3% and bought ANF I would be up almost $2000 more this week than I was.

Nobody Seems to Care

My portfolio makes over 60% in a year and nobody seems to care. Either they don't believe me or they symbolically pat me on the head and tell me what a good job I did. My wife seems to be the only one who is excited. I guess people just assume that individual investors can't make it in the market. I get a few friends asking me to put their $500.00 in and make them a million (No way). But nobody seems seriously interested. I can't figure it out.

About Me & My Trading

My name is Scott Carl. I am a full time employee and a graduate student. I don't have a ton of time to monitor the markets during the day, but I developed an interest in the stock market in 2003 after reading a couple of Motley Fool books. In particular The Unemotional Investor: Simple System for Beating the Market piqued my curiosity. It detailed how a simple unemotional trading plan could consistently beat the market without any unpleasant decision making. I dove into the market with a few thousand dollars and instantly made 20% in the first couple of months. I was a genius.

Success was fleeting as I continued making trades based on my own ideas about companies. I followed recommendations from just about every source out there, magazines, TV, trading newsletters, and just my own gut feelings. 2003 was a good year for stocks and it pumped up my ego.

In 2004 I discovered The American Association for Individual Investors through a reference in a Suze Orman book. There was a ton of good advice and information on the site and I became particularly interested in their computerized stock screens--in particular the Zweig screen--which was destroying all of the other screens with ridiculous returns year after year.

I started following the screens and paper trading different strategies on Smartmoney's excellent website. During that time I subscribed to AAII's Stock Superstars newsletter. I followed the newsletter's trading suggestions for over a year and learned a lot about stock screening, risk, and portfolio management. I did OK during those two years making a bit more than the market as a whole.

But I noticed that my screening strategies were making a killing compared to my returns. Worse yet, the strategies involved none of the "homework" that I was doing to try and find good prospects. So for 2006 I decided to pick one strategy and stick with it for the whole year. The strategy that I chose involves a group of about 5 stocks that are rebalanced on a weekly basis if necessary. The stocks are a combination of the Zwieg screen and Zack's #1 rated stocks each week.

The screen did very well in 2006 as you can see in my portfolio return for that year. Compared with the Zweig screen alone (which made around 17%) the combination screen screamed. I am following some other strategies in 2007 while continuing to use the Zweig and Zack's combination which I call ZZ #1.

I am not smart enough to be a chartist, and fundamental analysis bores me to tears. So this method works very well for me. The computer does the number crunching and I follow what it tells me to do without worrying about all the jibber jabber going on in the market and the world.

Goals for 2007 (In order of importance)

1) Beat the S&P 500
2) Beat the Stock Superstars Portfolio
3) Beat Charles Kirk's Yearly Return
4) Make 20% on Portfolio
5) Match or beat last year's return (62.44%)
6) Control my emotional trading and stick with the program

Ode to Kirk

One my favorite web sites is The Kirk Report. I started reading it about a year ago when I was doing a search for information on the Zweig way of screening (my favorite). Kirk had a post on screening and I was hooked from then on. The guy is way more intelligent than I am and seems to have an inside track into the workings of the market (stuff that completely confuses me most of the time). He has a members only section of the site that is worth way more than the $50.00 per year he charges to use it. Frankly, I don't have any idea how Kirk compiles so much information. It seems like there are 14 people living at his house helping him post each day. I look over his website about 5 times a day. I hate it when he takes vacations. I learn something new every day. There's no other website that offers so much for so little. Take a gander and drop $50. You'll make it back in a couple of minutes.

WiserTrader

I'm no longer tracking my Wisertrader screen. It has underperformed many of my other screens. I really like the concepts and information that the Wisertrader newsletter has each week, but I'm more comfortable with the screen process that I've put together.

Wimpy Week

For the week, I made .6 percent including commissions. The screen made 1.34 without commissions which would have pulled it down to about 1.2%. or twice what I made managing my account.

Mistakes:

1.I had my stops too tight to each stocks support. That stopped me out of PCP too early.
2.I didn’t buy my group of stocks early enough—I waited until 9:00 which kept me from some gains.
3.I should have followed up on stocks that I didn’t buy with stops the next day to capitalize on upward moving stocks.
4.I got happy feet and bought HNZ based on Media Sentiment. Too much knee jerk. I need to follow MS longer before I jump into it.

Successes:
1.I sold GES after it dropped through its support. It continued to decline and ended up -7.05 for the week.
2.I avoided my usual drama by setting stops and letting things ride.

Next week should be a little more normal since this was my first week following my new strategy