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Magic Charts Newsletter
February 11, 2002 |
This issue includes...
1) "New version of the Magic Charts!"
2) "How is the sample portfolio ?"
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1) "New version of the Magic Charts!"
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We are pleased to announce version 2.6 of the Magic Charts!
We added history in the portfolios. This history will be
updated every time the portfolio gets updated, so you keep
track about the progress in your portfolios.
We added the Magic Charts sample portfolio, the portfolio,
will be updated every day, so you are able to follow exactly
what we are doing with the sample portfolio.
We have added support for more modules, so we have taken the
opportunity to release an module for the US mutual funds,
ETFs and iShares. We start with about 300 charts containing
the Fidelity funds, Profunds, Rydex funds, ETFs and iShares.
If you feel that there are mutual funds missing we will add
them to the module (within reason).
If you don't already have a subscription
to the Magic Charts
and you would like to see the improvements in the new version
subscribe to a FREE one month trial of the Magic Charts!
Download the demo from our website at:
http://www.magiccharts.com/download
After installation, it will generate a base code with which
you can subscribe to the free trail.
Or even better, subscribe to the Magic Charts, and get one
month for free!
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2) "How is the sample portfolio ?"
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The sample portfolio suffered severe from the stock market
drop last week and is now on -6.5%. These things happen a
few times a year and stroked us just when we bought up to
the 50% debit balance level, so we where at the most
vulnerable level.
In general there are a few different situations where the
stockmarket takes a fall.
1) It can be a hiccup, where the market reacts on something
like last week, the stories about how reliable a companies
figures are when they are approved by accountancy firms who
also do profitable consulatancy work for that company.
In these cases the market takes a drop, but will recover
after a few days.
2) The market changes direction, like in March 2000 when the
Internet bubble popped. People suddenly realized that the
Internet shares where way overpriced and the market (for
Internet shares) dropped, but then everybody had to find
an alternative so they invested in Pharma and Health funds.
In such a situation you have to sell every stock that drops
(we use the 20% under the highest point) and start to buy
stocks when the new winners are clear. (we use a schedule as
described in our newsletter of February 2nd).
It seems like we have a number 1 case now, but it can turn
into a number 2 case if people decide that they don't want
stocks of companies which are approved by certain accountancy
firms.
This is a good opportunity to discuss the protection system
of the portfolio. We sold Digital River, AC Moore, and
Multimedia games when they crossed the 20% under the highest
point.
This may seem to early if these stocks recover in the near
future, but it can really hurt the portfolio if we go to a
number 2 situation, and they drop further, so we stick to
the 20% rule. We have seen too many portfolios go down the
drain because they kept there stocks to long.
This way we build down the portfolio until we are sure that
we know which way the marked is heading, so we can decide
on the new winners.
It looks like it is going to be an interesting week, you can
follow every move we make when you subscribe to (a trial of)
the Magic Charts!
There is a screen
shot of the sample portfolio on the bottom
of this page.
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Copyright 1998-2002 by Magic Charts. All rights reserved.
This document may not be copied in part or full without
express written permission from the publisher.
Trading in stocks involves risk. You can lose money. We are
not making recommendations to buy or sell any stock. We share
our views about how to trade stock.
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Magic Charts sample portfolio per 02-08-2002
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