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Good Timing

Good Timing. Peter Mauthe Spectrum Financial Inc. May 15, 2004. OBJECTIVE. IS to Make Money!. OBJECTIVE. is NOT to be right. APPROACH:. Find or make price streams that are smooth and offer superior performance. Baskets. Pros: enhanced betas, enhanced performance,

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Good Timing

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  1. Good Timing Peter Mauthe Spectrum Financial Inc. May 15, 2004

  2. OBJECTIVE • IS to Make Money!

  3. OBJECTIVE • is NOT to be right

  4. APPROACH: • Find or make price streams that are smooth and offer superior performance.

  5. Baskets • Pros: • enhanced betas, • enhanced performance, • trade all day, unique price stream, • smooth price stream, can easily target market hot spots • Cons: • trade all day, • transaction costs need to be managed, • slippage needs to be managed, • trading and tracking of baskets

  6. Biotech Holders vs. Equal Weighted Basket Basket equals or betters the performance of the Holders

  7. Industrials vs. Equal Weighted Dow Basket Basket equals or betters the performance of the Holders

  8. IBD 100 Basket vs. NASDAQ Composite Basket far outperforms the NASDAQ Composite

  9. Lowry's Power Bank basket vs. NASDAQ Composite. (vs. BKX which was +46.29%)

  10. Lowry's Power Oil basket vs. NASDAQ Composite. (vs. OIH which was +26.89%)

  11. Lowry's Power REIT basket vs. NASDAQ Composite. (vs. IYR Real Estate ETF which was +45.05%)

  12. Top small cap growth fund picks vs. Rydex Mekros (1.5x enhanced beta) Mekros outperforms the average of our favorite small cap growth funds FOCUS ON STYLE SECTOR RATHER THAN SPECIFIC FUNDS

  13. CRUSH basket 1/14/03 – 3/11/03 vs. NASDAQ Composite Those that go down the most in a correction tend to go up the most in the following rally.

  14. CRUSH Basket 7/14/03 – 8/8/03 vs. NASDAQ Composite Those that go down the most in a correction tend to go up the most in the following rally.

  15. Lowry's “Power” REIT basket vs. NASDAQ Composite. • (vs. IYR Real Estate ETF which was +45.05%)

  16. Position Sizing • Dollar loss stops • Percent loss stops • % of Capital stops – dependent on where trade stop is. • Dynamic stops to keep positions from getting too large.

  17. Trading by Exposure

  18. Profile Forecasting

  19. Behavioral Finance • More errors are made when a trader has a forecast. Objectivity is compromised since subconsciously the trader tends to interpret indicators to fit the forecast.

  20. Good News / Bad News Discount Model

  21. Trend line anchoring

  22. Discretionary vs. Systematic • Discretionary: + Performance - Repeatability • Systematic: + Repeatability - Performance

  23. Moving average / New High Strategy

  24. PIMCO High Yield Institutional

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