Thisis for the www.superforce.com Advanced Monthly Premium Service subscribers and others interested parties. The following information is provided for use with phantom portfolios only.
 
Which phantom stock has showed some of the best gains with Advanced Monthly Premium Service Method?
 
The chart below represents the share price of Infospace Inc. (INSP) which trades on the NASDAQ. Adjusting for stock splits in early 2001 INSP reached a high of $129 per share on March 3, 2000. Thirteen months later on April 3, 2001 the stock hit bottom at $1.72 per share. As of May 29, 2001 the stock was valued at $4.25 per share. From Jan 5, 2000 - May 29 2001 INSP has lost 91% share value.
   
 
The chart below represents our phantom trades with the INSP over the past 16 1/2 months. The Phase Q execution points are the different dates to cover/buy and sell/cover, basically Phase Q represents the forecasted peak of the upward movement or forecasted valley of the downward movement of the markets. In this case we have 122 points, which represent 244 trades. We have not factored commissions, which vary with volume traded, and we have not factored in short selling rules. Currently our phantom portfolio with INSP has gained 412.87% since Jan 5, 2000.
 
 
In the Chart Below combining the percentage gains with INSP using Phase Q vs. the share value percentage loss had you bought INSP Jan 5th 2000 and held it all this time. The difference between the two as of May 29, 2001 is 503.87%
 

The danger of trading in a company stock such as the INSP versus an index stock such as the Nasdaq 100 stock (QQQ) is that the earnings warnings and news announcements that came out when INSP stock fell below $20.00 per share caused increased volatility, which translates into huge percentage shifts in stock value. These warnings and announcements will often override our method. It was only three months ago that the INSP slide appeared to end and it was only then that our method began to show an effect. In the past 3 1/2 months (since Feb 14, 2001) the adavnced method has gained back 170.10%.

The final chart below shows a compounding effect with the INSP using the same trading days, taking the gains or losses from the previous trade and rolling it into the next trade. This can have a desirable effect on increased gains; 3,758% gain by November 29, 2000, but the downside is massive losses when the method is incorrect. Three successive trades in early December 2000 resulted in a 53% loss with this compounding effect, where the safer and more defensive noncompounding method (trading with the same initial amount every trade) only showed an overall loss of 12.72% for the same three trades.  

The QQQ which represents the top 100 NASDAQ companies is not as prone to individual company news announcements and earnings reports unless the company is one of the larger NASDAQ components such as CISCO, Microsoft, Sun Microsystems, Intel...The three dates in December which showed a 53% loss for the INSP for the same period showed a 4.04% gain with the phantom QQQ trades. 

The method can work better with individual stocks than with the Index stocks such as the QQQ, however this is more risky as seen with the INSP and the current upward trend of the method may be short lived with the INSP if it loses the bottom it is currently stabilized on top of.

Warning: The markets may be in a Bear market rally (also known as a suckers rally) prior to an extended freefall as the average current price to earnings (P/E) ratios on the S&P 500 stocks is currently very high. The S&P Index P/E ratios of the worst two bear markets were:

At peaks
1929..21 times
1973..19 times

At Troughs
1932..8.5 times
1974..8.0 times

The S&P500 P/E in March 2000 reached a record high of 32. Both the 1929-32 (83% drop) and 1973-74 (46% drop) were preceded by substantial sucker rallies and No Bear Market ever ended when the S&P500's P/E ratio was 25. Bear Markets bottom when the P/E is close to 6 to 8 times.

This information is provided for use with phantom portfolios only.

Sincerely,

Guy Cramer, President

United Dynamics Corp. www.superforce.com & www.bearfighter.com

 
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