PREFACE to STOCKS, OPTIONS, & SPREADS

My career in research and analysis began upon my graduation as an engineer when I accepted an offer from the world-famous Westinghouse Research Laboratory. It was the lowest paying offer on campus that year, but they offered me exactly the position I wanted. I was given the opportunity to participate in research throughout the many sections of the research laboratory until I selected what I preferred to be my principal area of research. I never regretted the decision to devote those early years to learning the many disciplines of research from experts in the field.

As a Commodity Trading Advisor (CTA) during the mid-1980s, I published a newsletter SPREAD LINE that advised clients about using SPREADS to add safety and profit to their investments. In 1986 I studied twenty years of Value Line Investment Survey (VLIS) data to demonstrate the value of spreads in the stock market. The study showed that a continuous selection of the 100 VLIS stocks from their highest rated group of stocks grew from $10,000 to $856,100 in twenty years and that a selection of 100 VLIS stocks from their lowest rated group decreased to $900. However $10,000 invested in a SPREAD between the two groups grew to $4,353,700 during the same twenty-year period. There was not any year during the total period in which the spread did not make a profit.

I offered to teach a group of commodity traders how to apply their trading knowledge to stocks rather than commodities. This group workshop formed the basis for the experimental development that is the subject of this books Section One, HOW TO PICK HOT STOCKS. Four months into the workshop the $100,000 of paper capital had grown to $312,000. Many of the trader/students changed their field of investment from commodities to stocks. One of the students said he planned to quit his position in the rat-race of New York City and move to a resort in New England to trade stocks full-time. Another student who owned a business in Arizona planned to sell his business and trade stocks by the methods he had learned during the workshop. This was our first experimental training workshop, now referred to as WORKSHOP 1992.

Because of the success of our first workshop, turning $100,000 into $312,000 in four months, we received requests to teach another workshop. The emphasis in this second workshop was on developing a trading program to generate a monthly income of at least twenty percent per month. Applying the same basic principles of experimental improvement from Section One, we developed a program that achieved an average of twenty to thirty percent per month. This was (and is) a great program to provide for early retirement. It suggested the possibility of returning $2,000 per month for every $10,000 invested. I realize this sounds almost too good to be true, but read about WORKSHOP 1995 in Section Two of this book for confirmation.

While conducting WORKSHOP 1995 I decided to include a discussion for those students who didnt have any nest egg yet to invest. They needed a program to develop a few hundred dollars into a large enough account to apply it to what they had learned in the workshop. Especially for them, but also for anyone who wants a MOONSHOT type of program, I taught them how to build STOCK OPTION PYRAMIDS. This program you can start with as little as $300 and build it into a fortune, if you are lucky enough to start with the right stock (or persistent enough to keep trying until you find one). This program is also included in Section Two, along with examples taken from our INVESTORS WORKSHOP newsletter.

Section Three incorporates techniques I taught in about 20 years of newsletter lessons and workshops valued at thousands of dollars. It describes my personal trading system that I use today. Its very simple and very profitable.