StockMasterProTM Tutorial By TurnerTrends
Welcome! Congratulations! You have just subscribed to the finest and most powerful stock investment tool on the market. The StockMasterPro™ is truly the next generation stock investment tool. This tutorial is designed to give you a brief overview of the StockMasterPro. It is a PowerPoint presentation, so you can navigate to the next screen or piece of information, by just pressing the space bar on your keyboard. However, you will also find many places where links (underlined text) are provided to the tool itself which will be active if you are connected to the Internet and have logged on to www.turnertrends.com with your User ID and Password. After going through this tutorial, I strongly recommend that you get on-line and try the tool out. However, if you have any question not answered in this tutorial, be sure to call us (512-577-2180) or email us at firstname.lastname@example.org. Best regards, Mike Mike Turner, President TurnerTrends, Inc.
Table of Contents • Getting Started • Understanding the theory behind StockMasterPro • Definitions • Objectives • Technical Analysis • Fundamental Analysis • Stop Loss Strategy • Mastering StockMasterPro • The StockMasterPro HomePage • Top 100 Stocks • Search Stocks • Sector Analyzer • New Hot Stock Picks
Getting Started (1 of 3) • Just as soon as you receive your “User ID” and a “password” from TurnerTrends, you will be ready to get started. We will email this to you in your “Signup Email” • After receiving your User ID and Password, you can log onto the TurnerTrends website, which is where you will find the StockMasterPro. • To log onto the website, click on this link: www.turnertrends.com. Once you do, you will see the TurnerTrends “Home Page”. At the upper left of the page is the login area that looks similar to the graphic, below: Here is where you would enter your Password Here is where you would enter your User ID
Getting Started (2 of 3) Once you have logged onto the website (Important: Be sure your browser has cookies turned on, as we store your User ID and Password in a cookie so that you don’t have to re-log in each time you pull up the TurnerTrends website), you will need to navigate to the StockMasterPro. You will want to click on the “StockMasterPro” navigation link, shown here:
Getting Started (3 of 3) When you click on the StockMasterPro navigation link, you will see several “sub-navigation” links. Each of these links will be discussed in more detail later in the tutorial, but include: StockMasterPro homepage, Top 100 Stocks, Search Stocks, Sector Analyzer, Industry Analyzer, New Hot Stock Picks and How We Rate Stocks. You can also just enter a ticker and jump straight to the StockMasterPro analysis results for that ticker.
Understanding the Theory (1 of 2) To get the most out of a tool, you have to believe in its theory and decision-making processes. No tool will give you the right choice 100% of the time. In double-blind testing, the StockMasterPro’s decisions on when to buy and when to sell generates an average return across its entire database of over 20% per year. Does that mean every trade will make a profit? No. It does mean, however, that extensive testing shows this tool will make the correct unassisted trading decision over 75% of the time. It will not tell you how to maintain your portfolio’s diversification, for example. However, if you are looking for a tool to assist you in finding the right stock at the right time… and even more importantly, when to sell the right stock at the right time… then, the StockMasterPro is the perfect stock tool for you.
Understanding the Theory (2 of 2) Critical to your use of this tool, is your willingness to believe what it is telling you. You should never blindly follow any tool, including the StockMasterPro. However, when this tool gives you a buy signal, you should understand why that signal is being given at a particular time. Likewise, when the tool tells you what the stop-loss price is for a stock, rather than wondering why it is so close to the current trading price or so far way… you should clearly understand the logic that goes into the formulas and processes that produced that stop-loss. We believe that if you know exactly how our tool determines its results, you will have more faith in its recommendations and understand why you should or should not be trading based on those recommendations. So, it is our hope that you will spend more time understanding the logic of the StockMasterPro tool, than learning how to run it. Running this tool is easy… very easy. Understanding the logic behind its results is somewhat more difficult, but infinitely more important.
Definitions Long – The stock’s week ending closing price is above the trend-line, has given a buy signal at some time in the past, and has not triggered a stop loss. The color of the line on the chart is green. Short – The stock’s week ending closing price is below the trend-line, has given a short sell signal at some time in the past, and has not triggered a stop loss. The color of the line on the chart is red. Out – The stock’s price has triggered a stop loss and has not given a buy signal or a short sell signal. The color of the line on the chart is black.
Definitions (1 of 2) Stop Loss – The price that is recommended to sell if long the stock or short the stock. Growth Rate – The rate of increase or decrease from the previous time, expressed as a percentage. Q/Q – Growth Rate from a year ago quarter to the current quarter Y/Y – Growth Rate from last year compared to this year Last 5 Years – Growth Rate over last 5 years Total Score – When available, an equity’s Demand Fundametals and Technicals are scored depending on the quality of both, resulting in a Total Score.
Definitions (2 of 2) Demand Fundamentals – We believe there are only a few Fundamentals that have the greatest impact on the demand of shares by investors, including: Earnings, Sales, Return on Equity, P/E Ratio within peer groups and Institutional Ownership
StockMasterPro Objectives The primary objectives of the StockMasterPro is to: • Find the fundamentally strongest stocks giving the best technical buy signals in the database. • Provide a weekly stop loss that is high enough to protect a pricing reversal and low enough to keep from getting whip-sawed. • Determine the best exit price for a stock, based on unrealized gains, technical trend in the stock, and technical trend of the market for that stock. The assumption inherent in these objectives is simple… generate strong and consistent profits in the stock market.
Technical Analysis (1 of 6) The StockMasterPro technical analysis relies on the following key elements: • A 10-week moving average, time-shifted forward in time by 3 weeks, and • The technical trend of a stock’s Industry and Sector, and • The last 12 months’ volatility of each stock, and • The Expected Move (maximum pricing movement) of a stock for the upcoming week, and • All decisions are based on the Friday closing price of each stock.
Technical Analysis (2 of 6) The StockMasterPro technical charts are simple to understand and extremely easy to use. Below is an example chart of AAPL: Blue Line:10-week Moving Average time-shifted forward 3 weeks. Green, Black, Red Line: The week-ending closing price, where Green=Long, Black=Out and Red=Short. When the week-ending close goes from Black to Green, that is the Buy Signal. A sell order is triggered when the stock’s price drops to the Stop-Loss.
Technical Analysis (3 of 6) At the very top of the charts are 3 “Rating” indicators. These indicators are the current Rating on the stock. The Technical Rating will either be Long, Out or Short. The Fundamental Rating will either be Strong Buy, Buy, Hold, Sell, or Strong Sell. The Composite Rating will either be Strong Buy, Buy, Hold, Sell or Strong Sell.
Technical Analysis (4 of 6) When you click on the AAPL ticker, you will be taken to a webpage very similar to the one on the right. There are 5 charts on this page, including: • Stock Technical Chart • Insider Trading Chart • 10-week Moving Average Volume Chart • Industry Technical Chart • Sector Technical Chart
Technical Analysis (5 of 6) The Technical Chart of the stock shows you the last 3 years’ week-ending close activity. By the colors of the week-ending close, you can see when the stock was recommended to buy (black-to-green), to sell (green-to-black), to short (black-to-red), and to cover (red-to-black).
Technical Analysis (6 of 6) Each stock in the StockMasterPro database is Technically Scored with a score from a low of -100 to a +100, and includes all of the following: • Current Status (Long, Out or Short) • Current Zone • 10-Week Moving Average Volume • Momentum Strength of the Stock’s Industry • Momentum Strength of the Stock’s Sector • Time degradation of last Buy or Short-Sell Signal Once a Stock is Scored Technically, its score is combined with the Fundamental Score to produce a Composite Score. This Composite Score can be sorted from best score to worst score as a part of the Search Stocks screen on the website.
The Fundamental Analysis (Page 1 of 2) The StockMasterPro utilizes a sophisticated process for its fundamental analysis, including the scoring of the following ‘Demand Fundamentals’: • Rate of Earnings Growth Quarter-over-Quarter • Rate of Earnings Growth Year-over-Year • Rate of Earnings Growth Last 5 Years • Rate of Revenue Growth Quarter-over-Quarter • Rate of Revenue Growth Last 5 Years • Peer Rating for Relative Value • Return-On-Equity • Dividend Yield • Institutional Ownership
The Fundamental Analysis (Page 2 of 2) Each of Fundamentals listed on the previous slide are scored. The higher the score, the stronger the stock’s fundamentals. The maximum score possible is 100. Stocks with a score of 70 or higher are considered to be fundamentally a “Strong Buy.” Those with a score of 15 or lower are considered a fundamentally “Strong Sell.”
Stop-Loss Methodology (1 of 5) One of the most important components of the StockMasterPro is its Stop-Loss calculations. Unlike other systems that rely on flat percentages, which completely ignore the volatility ‘personality’ of a stock, the StockMasterPro produces a weekly stop-loss price for every stock, based on each stock’s historical volatility and the statistical forecast of how much that stock is likely to move up or down in the upcoming week. This results in a stop-loss that is unique to each equity. It also means that as the stock’s pricing personality changes over time, so will the calculation of each week’s stop-loss. On the following slide, you will see how this stop-loss is calculated and how it is used to determine the perfect time to sell.
Stop-Loss Methodology (2 of 5) In theory, stocks have a tendency to trade in reasonably definable trading patterns. Statistically, the movement of a stock’s price can be measured by using volatility and time. That volatility can be used to forecast the amount of movement a stock’s price is likely to make within a predetermined period of time. The StockMasterPro calculates the volatility of each stock over the past 12 months, then it uses that number to forecast how much the stock is likely to move in the upcoming week, within one standard deviation of its norm. We call this potential pricing swing, the stock’s “Expected Move.”
Stop-Loss Methodology (3 of 5) The StockMasterPro assumes that if a stock stays within one standard deviation of its norm, it has not broken out of the trend it is currently exhibiting. Therefore, the objective would be to hold on to a stock as long as its trend is moving in the direction we want. The StockMasterPro will give you the stop-loss price of every stock that is one standard deviation below last week’s lowest low. The assumption is this will keep you just below the normal movement of the stock’s volatility and, therefore, outside of the ‘whip-saw’ action of the stock. Other than for dividend declarations, stop-loss settings are never lowered for long positions and never raised for short positions.
Stop-Loss Methodology (4 of 5) In addition, the StockMasterPro keeps track of the amount of unrealized gain theoretically in each equity, based on its most recent buy or short sell signal. As this percentage increases, and more risk is added to the holding due to the unrealized gain, the StockMasterPro watches the directional movement of the stock’s Industry. Then, should the stock’s Industry begin to weaken, the StockMasterPro will move the stop-loss closer and closer to the stock’s current trading price. The assumption is that a weakening Industry will have a negative pull on the stock’s price, and it is better to get out of the position with a profit than hope that the stock will counter the trend of the Industry and continue to move in the direction desired. This is a very sophisticated approach to protecting capital, capturing unrealized gains, and taking what the market is willing to give.
Stop-Loss Methodology (5 of 5) The chart on the right shows you the typical stop-loss price (light grey line). Each week, the StockMasterPro provides you with the Stop-Loss and Expected Move for the upcoming week.
Mastering StockMasterPro The StockMasterPro will save you hundreds of hours in research, but more importantly, you will soon have such confidence in its results that you will wonder how you ever invested in the stock market without it. A next generation tool, the StockMasterPro is easy to use but is, at the same time, extremely powerful. As mentioned at the beginning of this tutorial… mastering the tool is easy… understanding and believing in the theories driving this tool can be somewhat more daunting. You do not have to master the theories… but you will enjoy the tool all the more if you do.
The StockMasterPro HomePage When you click on StockMasterPro at the top level of the TurnerTrends navigation bar, you will see a screen similar to the one on the right. Click Here to see the actual page. On this page, you have: • The Top-100 stocks • The Sector Ratings • The Industry Ratings • The Current Picks for the Week • Near-term Market Forecast
The Top 100 Stocks On this page, you have the Top-100 stocks, ranked by “Total Score”. You can sort this list by any of the column headings. By clicking on a Ticker, you will see the detail page for the equity, including charts, profile, fundamentals, and stop-loss.
Search Stocks This is one the StockMasterPro’s most powerful screens. This is where you can search on hundreds of combinations of criteria. The more fields you select, the more restricted the search results. Once you have a set of stocks located, you can sort on any of the columns.
Sector Analyzer (1 of 4) This is the screen you use to find the best (or worst) stock in any Sector. Each Sector is scored, based on the average fundamentals of all the stocks in the Sector and on the Technical analysis of the Sector. Clicking on a Sector takes you to the next level, which is the list of Industries for the Sector selected.
Sector Analyzer (2 of 4) After selecting a Sector, you will be shown the Sector Technical chart, the average fundamentals, and a list of all the Industries associated with the chosen Sector. Now, you can select the desired Industry, based on the Composite Rating. Clicking on an Industry, will bring up the detail page for the chosen Industry, and a list of all the stocks associated with the Industry selected.
Sector Analyzer At this point, you have selected a Sector. Then from a list of Industries, you have selected an Industry. Now, on this screen, you are presented with the Technical chart of the Industry and a list of all the stocks within that Industry.
Sector Analyzer (4 of 4) From the Sector, you have selected an Industry. From the Industry, you have selected a stock. Here is the stock detail page, which includes: • Stock Profile • Technical, Fundamental and Composite Ratings • Technical Chart • Insider Trading Chart • 10-Week Moving Average Trading Volume Chart • Industry and Sector Technical Charts • Stop-Loss and Expected Move • Fundamentals and Star Ratings
New Hot Stock Picks This page lists all the stocks that have just given a new signal, including: • Strong Buy • Buy • Hold • Sell • Strong Sell Clicking on any Ticker will take you to the detail page for that equity.
StockMasterProTM The End… Thank you!