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Birkelbach Investment Securities, INC. and Birkelbach Management Corp. since 1974. “ Investors are irrational in a predictable way” “Listen to the markets” “Let the markets tell you what to do”. How to make money in the Stock Market?. Buy and Hold? 50 Years : 9%

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Birkelbach Investment Securities, INC.

and

Birkelbach Management Corp.since 1974

“Investors are irrational in a predictable way”

“Listen to the markets”

“Let the markets tell you what to do”

Birkelbach Management Corp.


How to make money in the stock market

How to make money in the Stock Market?

Buy and Hold?

50 Years : 9%

1997-2009 : 0 %

Birkelbach Management Corp.


Annualized returns
ANNUALIZED RETURNS

Birkelbach Management Corp.


Dow 1928 present
DOW 1928-Present

Why Sideways?Global CompetitionRedistribution of wealth from Shareholders to managementBanks, corporations and individuals need to rebuild balance sheets.

Birkelbach Management Corp.


The great sideways
The Great Sideways

Since 1997 – UP 50%

DOWN 50%

Do you have an Investment Strategy for this kind of market ?

Birkelbach Management Corp.


New market reality
New Market Reality

Increased Volatility

UP 50%; Down 50% will continue

Investors must become more FLEXIBLE

AVOID

Buy & Hold Strategies

Mutual Funds

New Strategy

Learn market timing techniques to Buy Low & Sell High

Use ETFs to be Long and/or Short

Birkelbach Management Corp.


To be successful in the stock market become self sufficient

To be Successful in the stock market become self sufficient

Brokerage Reports

Company Announcements

News

S&P Ratings

Today’s stock market prices represent investors’ perception of the future

And Price is determined by supply and demand…

Birkelbach Management Corp.


Becoming self sufficient lasting truths
Becoming Self SufficientLasting Truths…

  • Nobody controls the markets

  • We do control our selection and timing

  • We can’t tell the market what to do

  • We can let the market tell us what to do

  • “The trend is your friend”

    • Technical Analysis (The forgotten art)

    • A Picture is worth a thousand words

Birkelbach Management Corp.


Investors are irrational in a “predictable” way

Learn to listen to the market

Let the market tell you what to do.

Birkelbach Management Corp.


The lone bull i barron s 1982
The “Lone Bull” I – Barron’s 1982

DOW : 1,000 to 11,000

Birkelbach Management Corp.


The lone bull ii fall 2002
The“Lone Bull” II – Fall 2002

Dow: 7,200 to 14,200 --up 97.22%

Birkelbach Management Corp.


Head and shoulder
Head and Shoulder

Head

Right Shoulder

Left Shoulder

Neck Line

Volume

Neck Line

Head

Amount Up

Head and Shoulder Top Formation

Right Shoulder

Amount Down

Left Shoulder

Volume

Head and Shoulder Bottom Formation

Birkelbach Management Corp.


The dow
The Dow…

Giant Head and Shoulders Formation

(2001 – 2005)

10,753 – 7,197 = 3,556;

3,556 + 10,753 = 14,309

Projected Goal? (14,309 + 32%)

Birkelbach Management Corp.


The s p 500
The S&P 500…

Giant Head and Shoulders Formation

(2001 – 2005)

1,170 – 820 = 350;

350 + 1170 = 1,520

Projected Goal? (1,520 + 31%)

Birkelbach Management Corp.


The nasdaq composite index
The NASDAQ Composite Index…

Giant Head and Shoulders Formation

(2001 – 2005)

2,000 – 1,195 = 805;

805 + 2000 = 2,805

Projected Goal? (2,805 + 45%)

Birkelbach Management Corp.


Lone bull iii
Lone Bull III

Dow: 6,470 to 10,000 --up 54.56%

Birkelbach Management Corp.


Price of Ford

February 12 2009- $1.79

Now-$10.00

Birkelbach Management Corp.


Apply technical analysis for evaluation

Birkelbach Management Corp.


The dow theory
The Dow Theory

Bear Market

Bull Market

Phase I

Phase III

Phase II

Phase II

Phase I

Phase III

Birkelbach Management Corp.


Characteristics of the market cycle
Characteristics of the Market Cycle

Distribution

Reversion

Progression

Accumulation

Birkelbach Management Corp.


Trend movements look at 3 month charts 1 year charts 10 year charts
Trend movementsLook at 3 month charts 1 year charts 10 year charts

Intermediate Trend

Intermediate Trend

Intermediate Trend

Intermediate Trend

Major Trend Line

Birkelbach Management Corp.


Exxon xom 5 years as of 12 31 2009
EXXON (XOM)5-Years as of 12/31/2009

Birkelbach Management Corp.


Exxon xom 1 year as of 02 01 2010
EXXON (XOM)1-Year as of 02/01/2010

Birkelbach Management Corp.


Monitor your investments

Let the market tell you what to Do.

Birkelbach Management Corp.


Resistance area
Resistance Area

B

GOOD

Resistance Area

A

C

E

D

Birkelbach Management Corp.


Support area
Support Area

D

C

E

B

Support Area

A

BAD

Birkelbach Management Corp.


Trendlines and trend movements
Trendlines and Trend movements

GOOD

BAD

Uptrend Broken

Sideways Trend

Broken

BAD

GOOD

Downtrend Broken

Birkelbach Management Corp.


Step-1

Determine your risk/reward tolerance

Birkelbach Management Corp.



What are the benefits of using etfs
What are the benefits of using ETFs?

Diversification

  • Exposure to wide spectrum of asset classes and investment styles

  • Helps to limit single-stock risk

    Lower Fees & Expenses

    -US Equity ETFs charge relatively lower fees than competing investment vehicles

    Tax Efficiency

  • Passive management and the creation/redemption process can help minimize capital gains distributions

    Trade on major stock exchanges throughout the day

  • Not subject to trading issues associated with 4:00 pricing of open-end funds

    Hedging

    - Be long and/or short the market

Birkelbach Management Corp.


Exchange traded funds etf s
EXCHANGE TRADED FUNDSETF’S

  • IYY Dow Jones Index Ishares

  • DOG Short Dow 30 IndexProshares

  • QQQQ NASDAQ-100 Powershares

  • PSQ Short NASDAQ-100 IndexProshares

  • IVV S&P 500 Index Ishares

  • SH Short S&P 500 Index Proshares

  • IWM Russell 2000 Index Proshares

  • RWM Short Russell 2000 Index Proshares

  • IEO Oil & Gas-Ex Index Ishares

  • DDG Short Oil & Gas Proshares

  • VFH Financials Vanguard ETF

  • SEF Short Financials Proshares

  • EEM MSCI Emerging Markets Index Ishares

  • EUM Short MSCI Emerging Markets ProShares

Birkelbach Management Corp.


Current market assessment
Current Market Assessment

Step-2

Birkelbach Management Corp.


We avoided another Depression (Large Government Debt)

Recession ending

Corporate earnings improving because

-Cutting expenses

-Cutting employment

Downstream effect negative

Birkelbach Management Corp.


The new normal economy slow growth
The New Normal EconomySLOW GROWTH

Consumers account for 70% of the economy

Reverse wealth effect

  • Increasing unemployment

  • Maxed out on credit cards

  • Home equity down

  • 401K retirement funds down

  • Credit tight

Birkelbach Management Corp.


Dow 1928 to present
DOW 1928 to Present

Why Sideways?Global CompetitionRedistribution of wealth from Shareholders to managementBanks, corporations and individuals need to rebuild balance sheets.

Birkelbach Management Corp.


The great sideways1
The Great Sideways

Since 1997 – UP 50%

DOWN 50%

Do you have an Investment Strategy for this kind of market ?

Birkelbach Management Corp.



Dow 1997 to present
DOW 1997 to Present

11,261

Drop 14,198-6,470 = 7,728 Points

50% Retracement = 3,864

6,470

3,864

10,334

62% Retracement= 4,791

6,470

4,791

11,261

Birkelbach Management Corp.


Dow sep 2008 to present
DOW Sep 2008 to Present

9,683 - 6,470= 3,213

9,683+ 3,213=12,896

Birkelbach Management Corp.


Dow april 2009 to present
DOW April 2009 to Present

Birkelbach Management Corp.


Technical market comment
Technical Market Comment

Current value

Dow 10,584

NASDAQ 2,308

S&P 500 1,135

Birkelbach Management Corp.


S p 500 1999 to present
S&P 500 1999 to Present

Drop 1,576-666= 910 Points

50% Retracement = 412

666

455

1,121

62% Retracement = 600

666

600

1,266

Birkelbach Management Corp.


S p 500 january 2009 to present
S&P 500 January 2009 to Present

Birkelbach Management Corp.


Nasdaq 1999 to present
NASDAQ 1999 to Present

Birkelbach Management Corp.


Nasdaq 2007 to present
NASDAQ 2007 to Present

Drop 2,861-1,268 = 1,593

50% Retracement = 797

1,268

797

2,065

62% Retracement = 988

1,268

988

2,256

Birkelbach Management Corp.


Nasdaq january 2009 present
NASDAQ January 2009- Present

Birkelbach Management Corp.


Hang seng hsix
Hang Seng ($HSIX)

Birkelbach Management Corp.


Euro to us dollar 10 years
Euro to US Dollar-10 Years

Birkelbach Management Corp.


Stagflation gold 1975 present 1 120
STAGFLATIONGold-1975-Present (1,120)

Birkelbach Management Corp.


Deutsche bk ag london dgz 1 year daily as of december 31 2009
Deutsche BK AG London(DGZ)1 Year Daily as of December 31, 2009

Birkelbach Management Corp.


Step-3

Establish the right broker/client or money manager relationship

Birkelbach Management Corp.


Choices
Choices

  • Discount Broker

  • Financial Planner

  • Mutual Funds

  • Broker

  • Investment Manager

Birkelbach Management Corp.


SRP vs S&P 500Socially Responsible Portfolio UP by 3.28% and S&P 500 DOWN by 6.19%As of January 04, 2010

Birkelbach Management Corp.




Investors are irrational in a “predictable” way

Learn to listen to the market

Let the market tell you what to do.

Birkelbach Management Corp.


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