The Kirk Report

Looking Ahead To May

As golf season finally makes its return to Minnesota, I have another thing to look forward to next month - a Q&A with Harry Domash!

Along with the many links I've shared throughout the year directing readers to his website and useful stock screens, Harry's book "Fire Your Stock Analyst!" is one of my most recommended readings. If you desire to learn more about steps you should take when evaluating any investment idea, that book is a helpful resource. We'll talk about his stock screening approach and investment analysis in the upcoming Q&A.

If you are unfamiliar with Harry's excellent work, I recommend you start by reading some of his previous columns at MSN. In fact, those of who are new to stock screening will find many of his columns a good starting point. Then I would venture on to his market workshop and basic training. Harry has built quite a nice education resource for investors and I look forward to May's Q&A with him.

Help Wanted

I'm looking for part-time programmer who is knowledgeable and proficient in Script Development (Perl, CGI, PHP, ASP), Script Installation (UNIX, Linux, Windows Systems), Database Design (MS Access, SQL, mySQL, Oracle, Postgres), Web Design/Development & CMS (HTML, XML, Java, Perl, VB/Visual Basic, Cold Fusion, Ruby on Rails), and Blog Design, Management, and Implementation in WordPress & Typepad. If you possess these skills or know someone who does who is interested in working for me, please let me know.

On Vacation Until Monday March 31st

Over the next couple of weeks we will be on vacation in Maui. Along with lots of golf, beach time, hikes, and just hanging loose, I will be offline.

Have a great couple of weeks and Easter holiday. May every trade you make be a good one until I return. Aloha!

March Madness

Now that February is in the history books, I'm already looking forward to March in a big way.

That is especially true this year for these two main reasons:

1. Monthly Q&A: I finally get the opportunity to interview Jason Goepfert from Sentimentrader for our March Q&A. Mr. Goepfert is a leading expert at sentiment analysis, especially as it pertains to market timing. He is one of the few people I read every day and, as a fellow Minnesotan, I'm a big fan of his work.

2. Spring Break: We are going to take two weeks of vacation at the end of next month. We've decided to celebrate Easter in Maui this year. (I can't hardly wait to thaw out from this long and cold winter.) Along with plenty of golf, hiking, beach time, etc. I have plans to meet up with Irwin Yamamoto, the legendary Maui contrarian (see this previous Q&A). I'll be sure to pass along any special insight from that meet up!

The market has a knack for making big moves when I'm away so next month should be even more fun than this one!

Substantive Additional Action

Bernanke hands the market another carrot along with enough trash talk about the economy to keep you wondering why he hasn't already cut rates.

The market's response, at least so far, has been tepid at best. (Where's the love?) Have the bears not been shorting this market as much as they have in the past? I do wonder.

With a 50 basis point cut or more coming soon and whatever the crackpots in Washington can come up with the stop the blood flow, the market should be acting much better than this.

Members' Top Picks (Winners)

In the 4th quarter, the best performing stock within the members' top picks screen was Baidu.com (BIDU). Three savvy members selected that stock on September 9th as their top pick and have won lifetime honorary memberships to The Kirk Report (will have to pay no more yearly dues), along with $50 to spend as they like and a small gift. Like with previous winners, I asked all three to answer a few questions about themselves and to share some thoughts I think you'll find of interest:

NAME:  Bill Haedrich (Queensbury, NY)

PROFESSION:  I am currently a substitute teacher with a BA in Mathematics and a Masters' degree in Divinity.

MARKET EXPERIENCE:  After receiving a number of stocks from my Dad (in 1996), I became interested in the stock market. Since that time I have read a number of different excellent investment books (among them Stocks for the Long Run by Jeremy Siegel.) I also subscribe to IBD as well as reading KIRK.

MARKET STRATEGY:  My strategy during the past year (I'm a slow learner) has been getting more settled about appreciating the unpredictability of both the stock market as well as the economy. "Grounding" myself in this regard is always a challenge. My basic approach is combining intuition, 'faith' and doing some research. After reading or hearing about a particular stock, ETF, etc. that sounds interesting, I will wait and see how often (if at all) I might read or hear about it again. If I do I go to different sources (among them Yahoo Finance and IBD) and do some further research. Some would say that I take a more visceral vs. an intellectual approach in my strategy! There is too much to think about. As Dick Davis elaborates in his book, there is so much to know! In any event, my reward has come with investing in the following stocks during market turn downs in 2007: BIDU, BHP, DE, MON, NOV, SLK, SYK, and VLO.

MOST IMPORTANT THINGS I HAVE LEARNED:  Looking back and obsessing about my "mistakes" is never very healthy! Lastly, there is a reason why it has been said that patience is a virtue!

NAME:  Eric Cadora (French Riviera, France)

PROFESSION:  Import/exporter

MARKET EXPERIENCE:  I started with Mutual funds in the past but I was going nowhere. Stumbled across Kirk Blog in 2005 and it was the beginning of an epiphany in the world of trading.

MARKET STRATEGY:  I am mainly an intra-day investor. I look for a gap up in the morning, especially when previous two to three days were down before the gap. For tech tools I like Bollinger band, 5 days moving average, MACD and Fibonacci set up. I look for inverted head and shoulder, also Cup and Handle.

MOST IMPORTANT THINGS I HAVE LEARNED:  Never stop learning. Emulate from other successful investors. Invest at the sound of drums and sell at the sound of trumpets. Know who much you're willing to lose per trade so you do not get run over by Mr. Market.

NAME:  Luke Friendshuh (Elko, MN)

PROFESSION:  I am a software engineer for Seagate Technology. I create computer models of disc drives (and subsystems of disc drives) to estimate performance for design decisions. I also am interested in Systems Modeling in general and have recently started a small research institute to pursue this interest.

MARKET EXPERIENCE:  I have watched and invested in the market since 1991. Mostly without too much success. I have learned a lot, but haven't made much money.

MARKET STRATEGY:  Right now, I am using option straddles. I look for very popular stocks with the idea that they will either continue to surprise on the upside or collapse on bad news because they have been priced for perfection. I like playing for extreme moves and the limited losses of options. Options are highly leveraged, so you have to be very careful about position sizing. BIDU was mostly just a lucky guess. I did notice it was acting strong in a weak market when you asked for a pick, so I went with it.

MOST IMPORTANT THINGS I HAVE LEARNED:  Be very disciplined about stop losses. That is what has allowed me to continue to play in the market even though I haven't had a lot of success. It has saved me more times than I can count.

Congratulations again to the winners - I'm honored to have you part of the membership!

A Letter To Readers

At the end of the first week of the new year, I would like to take this opportunity to reveal my goals, plans, and changes to the website in 2008. This is an important post and one you'll want to take time to read thoroughly.

For the past few weeks, it was a good time for rest, reflection, evaluation, and planning for 2008. I think it was time well spent and, like many of you, I'm well motivated to achieve great things in the coming year. I've always enjoyed the process of taking time to reflect and think, as well as to seriously evaluate what I'm doing and whether I'm reaching my goals. As the great philosopher Socrates once said, "the unexamined life is not worth living." How very true.

In looking back over what I've achieved in my lifetime so far, along with lots of good luck & strong family support, my achievements have come from consistent goal setting, discipline to achieve those goals, and hard-work. I've also been very fortunate to do what I want for a living and to structure my life in a way that matches both my skills and personality. The key to success, as I've said many times, is to make a career from what you love to do and I've been fortunate to do exactly that.

However, I have finally come to the realization that in recent years I've become so focused on my daily activities and responsibilities that I simply haven't been doing a good enough job of staying focused in the right way to make sure that I'm using my time and skills effectively. In essence, I do not believe I'm on the right track both with my professional and personal goals.

Upon extensive contemplation and intense soul-searching, I have decided to make some very tough decisions that will significantly impact what I do and how I do it. No goals worth achieving come without both sacrifice and change and the goals I've set for 2008 will require a great deal of both.

The Membership Survey

I do surveys because I really do care about what members think about the website. It serves as both a report card for me, but also helps me understand ways to improve the website and to change as needed. Unlike politicians who will say and do what they think most people want them to do, I will consistently seek to improve this website but ultimately I will make decisions based on what I think is best for all of us. After all, popular opinion isn't always the right opinion and it takes leadership to make and stick with tough decisions.

With that said, here are some things I learned from the survey:

• Members feel good about their membership. 48% said they love it, 51% said they like it, while 1% said they could care less. Fortunately, no member said they dislike or hate their membership

• 98% of members feel they are getting good value from their membership

• The top five favorite members' only offerings are: stock screen machine, after hours posts, premarket posts, Q&A ask me anything, and stock filters

• The top 5 least favorite members' only offerings are: guess this stock, extras (golf, family, trips, etc.), retirement investing posts, book reviews, and the model retirement portfolio

• The negativity expressed regarding the "guess this stock" posts I did were extremely high

• The trading portfolio/track record received lukewarm ratings

• Although most members think my link posts are "just right," 30% of members thought they are too long and need to be shorter and more concise

• Within my link posts, members' most liked links offering opinions/predictions, stock picks, investing, and education. The least popular links were those to lazy portfolios, personal finance, and fun/extra links I share

• A slight majority (62%) of members want me to do occasional software/product reviews

• 83% of members have found the stock screen machine helpful

• Members supplied a number of very helpful suggestions on how to improve my stock screen machine

• 94% members wanted me to take a much closer look at specific stocks showing up in my stock screens

• Outside expert Q&A sessions were still popular and 41% of members want me to do more than just 4 outside expert Q&A's per year

• Members also supplied a number of recommendations as who they wanted me to interview in future Q&A sessions. Popular recommendations were Jim Cramer, Warren Buffett, Ben Stein, Ben Bernanke, and Jim Rogers

• When asked what I should tell those who ask me why they should become a member, I received tons of interesting and helpful suggestions

• In addition, a lot of helpful comments were received concerning future improvements/upgrades

In the second part of the membership survey, members took time to share insight about themselves and their opinions about the market. Like last year, I plan to dedicate a number of posts this month concerning topics covered in this survey including members' New Year's resolutions, where members' think the market will go this year, which sectors will outperform and underperform, popular themes and trends, predictions, and so forth.

Nevertheless, there were two survey questions that I would like to focus some attention on. Namely, I was disappointed to discover two things: 1) only 62% of the members said they beat the S&P 500 in 2007, and 2) when I asked members to give themselves a letter grade for their results in 2007, the majority said they deserve a C+. In essence, only a slight majority of your beat the market in 2007 and most were not that happy with their performance.

While I think I've been helpful to members and I'm very grateful to see so many members feel good about their membership as this survey showed, at the end of the day, performance means everything. And, clearly, there is a tremendous room for significant improvement.

When 38% of members fail to achieve the performance of the S&P 500 in any year (which anyone can do simply by buying an S&P 500 index fund or ETF), I need to figure out ways to fill the information/education gap. In fact, with relatively poor ratings provided to my coverage of "lazy portfolios" and "retirement investing," it provides me with an important clue that members still do not understand the importance that passive investing plays in their long-term success. This is something I will have to remedy in the coming year. Although I spent a lot of time early last year covering retirement investing and lazy portfolios, I think the performance stats show that most are not using these strategies. At least not effectively. I suspect based on questions I receive that many are trying to either outsmart these passive systems or are not sticking to them when faced with a challenging market.

Although it is not my responsibility to make members do well in the market (nor should it be) it does matter a great deal to me that members find more success in the market. After all, that's the website's main purpose. At a minimum, I should think that at least 80% members should match or beat the market's performance or I'm simply not doing my job!

A Labor Of Love

As many of you know, this website is a labor of love for me and I do it because I think I'm being helpful to others and enjoy the writing/sharing process. In fact, I've often thought in the past I'm a better trader/investor as a result of sharing what I know and the things I think are important though this website. But, after three straight years of sub par trading performance, I have finally forced myself to face the reality that this is simply not true. Failure to achieve my own performance goals for three straight years in a row is more than enough evidence that something is wrong.

I made an agreement with myself at the start of 2007 that I would give it another year and, if I failed to hit my performance goals again, that I would make some substantial changes in 2008. Since I consider my performance in 2007 atrocious and unacceptable, I must take swift action to right the ship and get back on the right track. A disappointing +13.6% gain is enough evidence to show that I'm not applying my time and skills to my best ability, especially when compared with prior years.

Not Enough Time To Trade?

At around this time last year (if not a little before that), I was starting to realize that I was losing control over how I spent my time. After several discussions between me and my most trusted advisor (my wife), I decided to closely track the time I spent on my work through the entire year using special time tracking software. Everything was I did (both for work and for fun) was tracked so I would have a much better understanding of how I was spending my time and whether I need to make changes and re prioritize my work. Like I've often said at the website, you often get what you put into your trading and investing and my performance shows that I have not been putting the hours in the way that I should to achieve my goals.

Although I make it look easy, I think very few people really understand the sheer amount of time and effort it requires to produce the website. In 2007, I worked an average of 65 hours per week - Monday through Saturday - and here is how I spent my time last year:

• Writing & Preparing Posts:  29 hours per week

• Answering Email:  17 hours per week

• Website Management & Tasks:  7 hours per week

• Stock Screening:   6 hours per week

• Investment Research:  3 hours per week

• Q&A Sessions:  2 hours per week

• My Training & Skill Development:  30 minutes per week

• Trading & Related Tasks:  30 minutes per week

As you can easily see, the time dedicated to trading, skill development, and research are at the bottom while tasks directly related to the website are at the top. Is it no wonder then why my performance and trading goals are not being hit? I have been violating one of my most trusted and valued beliefs - that the work and effort you put into your trading makes a difference between success and failure in the market. At best case, I'm a very part-time trader, if that.

It doesn't take much to understand that I'm simply not spending my time in a way where achieving my goals is even remotely possible. In fact, there's no balance. Frankly, the most remarkable thing about this is that my performance hasn't been worse given the little amount of time I dedicate to my trading and research. Looking back just to last year, if I hadn't stepped up to make some very aggressive trades at year-end, my performance would have been even worse.

I know it will come as a great shock to many that preparing posts, answering email, Q&A sessions, and various website management & tasks fill up over 50 hours per week. But, it is true, I really do work that much. I was shocked when I started tracking the stats last year and couldn't believe that the amount of hours and effort that go into it. I enjoy it so much that it was convenient for me to ignore how I was really spending my time and what dire ramifications it had on my performance as a result. But, facts do not lie.

Change Is Needed

Clearly, I must change the way I spend my work time. Although I heavily considered it over the past couple of weeks, not doing this website is simply not an option for me. I enjoy it too much and it provides me with a sense that I'm being helpful to others. I know that I've made a positive impact on many people. In fact, just in the past few weeks alone, I had dozens of members write in to express their gratitude for the website and for all that I do. Even in spite of what many consider to be a challenging market in 2007, I was told by at least 30 members that they had their best year ever and that I helped them achieve it. Everyone should be so lucky to have a job where you feel like you're really making a difference in others in this way. Helping others achieve their financial goals in the market is a privilege for which I am very grateful.

But, with all things, there must be balance. Blogging and the website have literally taken control over my life and I'm not happy with how I'm spending my time. In addition, it is irresponsible for me to not find out how well I could really do in the market. If I can outperform most portfolio managers by spending as little time as I currently do on trading, just think of what I could achieve if I dedicated more time and energy to it.

Financially speaking, I'm never going to achieve my own financial goals through blogging. The money I receive through membership fees only slightly offsets the time and money I put into it. Since I refuse to sell advertisements (that will never change), engage in quid pro quo marketing arrangements with others (not going to happen), and do not want to increase the membership fees (so it remains affordable to new and little guy investors) even amid substantially higher operating costs, some tough business decisions are required.

Big Picture Goals

My two big picture goals for 2008 include the following: 1) significantly improve my trading performance with a minimum +35% yearly rate of return, and 2) continue to help others through the website. Everything I do professionally stems from these two goals. So, how do I achieve both? Here's my plan.

My Plan

As I see it, there are three ways that I need to improve:

First way to improve: Allocate more time for trading, research, and skill development.

The biggest time problem I have is answering email. 17 hours a week - 68 hours a month - and almost 37 full days per year is out of control. I also estimate that only 5% of the email I respond to is necessary. I receive a lot of questions and more than a few members think they've hired me as their personal research assistant/advisor for $50 per year. Abuse is rampant and I've got to get the email beast tamed.

Solutions:

A) Make upgrades to the website so that members can take care of routine membership tasks on their own through the website. For example, if members need to change their email address, modify their user name/passwords, or find out when their membership expires, they should be able to do that only through the website without any assistance from me. (I expect this to be done by the end of the month through the a new membership page).

B) Although I would like to answer every question asked (which has been my policy in previous years), I simply cannot do that any more. The membership has grown to the level where doing that just is no longer remotely possible. The problem is that some of the questions I receive are useful and important and my replies to them would be helpful to everyone. Starting next week, I will begin a new weekly feature called "Mailbag." Every Friday, I will select a few questions to answer. Questions will be selected based on popularity, relevance, and how helpful my answer will be to others. Unfortunately, not all submitted questions will be answered as I will pick and choose from those submitted. In essence this will be a small version of an "ask me anything" Q&A but instead of 4 times per year I do it every week. I think it offers a reasonable compromise.

C) No email during trading hours. As a new rule, I will not answer email during trading hours for any reason. That time will be reserved exclusively for trading. I may still post and do intraday updates at times, but when the market is open, my focus and concentration will be on trading.

D) All email received will be filtered and prioritized into three main groups: Member support (For problems with your membership that require personal attention. Some examples include trouble accessing the website, requests to change your email address, and problems with a specific website function), Mailbag Questions (Questions about investing, trading, stocks, or how best to utilize The Kirk Report. The vast majority of email I receive should be sent here and used for the weekly mailbag post); Suggestions & Feedback (In addition to the surveys I do, this will allow you to send feedback, correction, etc. that you want me to know). Among the three above, only member support requests will receive personal replies. In addition, email received from the free website will filtered in the same manner and will receive a slower response rate. Email received from members have always taken higher priority, but this will be even more true in 2008. Direct email sent to email addresses I've used in the past will not be received so to send me messages, please use the contact forms.

E) Add video instructional tutorials to the website. Many questions I receive could be avoided if I offered video training to show members how best to utilize the website. Of course, this still requires members to watch the videos, but if I do them properly they should go a long way to answer a lot of questions I receive especially from new members. I would like to have this done by the end of the year.

F) Personal help: I know many of you still want personal help and private one-on-one interaction. Later this year, depending on time constraints and how I'm actually doing on achieving my own trading goals, I will offer the opportunity with an additional fee for private sessions via online chat for those who desire them.

I think these 5 solutions will go a long way to helping me to eliminate the email time drain. I would appreciate your cooperation to utilize member support only when really needed and to send email to me only through the new contact form so that your email is filtered properly. I still encourage members to ask questions and I will do my best to offer answers through the weekly mailbag posts.

Second way to improve: Move my trading portfolio offline

Trading and investing in a fishbowl where others can review, constantly question, and critique every move I make has proven not helpful. In fact, I think it has stalled my progress, ultimately paralyzed my trading, and fostered an environment where I'm become afraid to make mistakes which is not conducive to good trading. Warren Buffett once said that the largest mistakes he has made are those which no one knows about because they are things that he decided not to do and opportunities he missed as a result. Well, in my experience the very same is true.

As I see it, the cons outweigh the pros for disclosing my trading portfolio any longer. Back in 2004, I decided to open up my portfolio so that others could benefit and learn from watching over my shoulder, but I don't believe that the manner that I've done this is beneficial to members or myself for the following reasons:

• The potential for and rampant knowledge of copycat trading by members. The website is about opening doors, not pushing you through them

• The invitation of market manipulation of stocks I trade because I trade them

• The potential for unintended front-running of trades by me ahead of other members. Even the slight appearance of manipulation by me for profit is something I will avoid at all costs

• The use of strategies (like daytrading) that are simply unsuitable and unrealistic for the vast majority of members

• The complete paralyzing of my own short-term approaches due to their constant supervision and third party evaluation. Trading in a fishbowl is not an effective strategy and causes too much emphasis on "high win/loss ratios" versus overall profit.

• According to the members survey, it simply wasn't a highly rated part of the website. I know some feel strongly about this feature, but the fact that only 60% beat the market last year who are members is evidence enough that it isn't helping to the degree it should.

• I now have capital that require much different strategies and approaches than those who read the website. How you manage a million dollar portfolio versus a portfolio of $20,000 is different in many ways.

• In spite of efforts to discourage copycat traders from signing up, the website attracts a lot of people who simply want to "ride my coattails" for $50 per year. I must refocus the website so that those who want to learn and improve, versus those seeking advice, will become members

• Providing stock advice in this manner goes completely against my view that to do well in the market you have to work your own strategy versus trying to follow another person. Yes, I can provide the same tools I use (like my stock screen machine) and show how best to utilize it as well as offer perspectives and information that will help you become more successful, but sharing my trading portfolio turned out to be more of a hindrance than a real benefit. Ultimately, it causes sheep-like behavior among the membership, which will only delay your success

Solutions:

1) My trading portfolio will be removed from the website. I will no longer report trades I make or how I perform in the market. I will still submit my results to an outside third party as I have every year in case I should need to establish a track record for others to evaluate at a future time.

2) In order to still meet the demands of those who still wish to improve their trading, I will start a new feature at the website in 2008 called "trade flashback." When time permits and I have good situations to use as training examples to illustrate specific techniques, patterns, and strategies, I will discuss a trade I've made in the past and literally walk members through both sides of the trade including any lessons learned, etc. from start to finish. Members have been asking for me to do anatomy of specific trades in much more detail but I could not do that without also crossing the line into providing investment advice. It would have made my job of preventing copycat trading even more difficult than it already was. However, utilizing real examples in the past (both with successful and failed trades/investments) I think will prove far more instructive than simply asking members to reverse-engineer trades on their own and not specifically providing information that led up to the entry and exit of that trade. Again, focus on education versus advice so you can actually improve and achieve your goals. It will also help me to find flaws in my own trading.

By taking the portfolio offline, I fully expect two things to occur: 1) membership ranks will be lower and far fewer people will become members, and 2) those who seek to ride my coattails will move on to other websites and services. With the number of social investing websites now gaining in popularity, it won't be difficult to find alternative resources to use. But, I'm placing a large bet on what I think will be a majority of members who will stick with me and understand that what I'm doing is in all of our best interests. I have a number of very good members who are seriously working on improvement and that's who this website is for, not those looking for fast money, stock tips, or short-cuts. The latter will not find success in the market no matter what I do.

Third way to improve: Refocus the website

Although long-term members can and have noticed the progress, I have consciously made an effort to refocus the website on education and incorporating a lot of different ways to achieve financial goals. Even the sharing of my stock screen machine has an educational component as I show others how to incorporate screens within their own strategies. But, I can and should do more. Some of the things I would like to do include the following:

• I need to spend more time showing how to utilize the stock screens and incorporate them in various different strategies, both short, medium, and long-term.

• Even though they are not popular, I need to show how to incorporate passive investing strategies and why these are so very important even for short-term traders.

• In the membership survey, 94% members wanted me to take a much closer look at stocks showing up in my screens. Soon I will start a "Stock Of The Week" feature where I will look at a stock showing up in my screens and how I go about evaluating, researching, and ultimately develop a plan of attack to buy and sell it in the future. I do this somewhat in the stocks only Q&A sessions, but I'd like to do more and I think the process I go through would be helpful.

• Members want to interact with each other and, as long as it doesn't require constant supervision or time from me, I'm very much in favor of it. Although I'm not a fan of message boards, they can be useful to enable members to discuss and help each other if done properly. Later this year, I will try to integrate one (on a trial basis) and see how it goes. If it proves helpful, it will remain. If it is abused, it will go to the graveyard along with the "guess this stock" feature of 2007.

• A lot of members really enjoy the outside expert Q&A's I do even though they require a huge time commitment by both me and the person I interview. For example, I have no doubt that between both me and Dick Davis, the recent Q&A probably took us well over 100 hours of our time. The end result was terrific, but it is quite overwhelming. Although I still plan to do these Q&A sessions, I think real-time moderate chats with me and other leading professionals would be nice. Not only would they be less time consuming, but would be more interactive for members.

• Theme investing is very important and I think I could do a better job of covering themes than I have in the past, either though specific sector-based stock screens or simply writing theme based posts that open up the idea to invest in certain trends.

• I enjoy offering (and also reading) opinions about software/books/brokers/tools and I would like to make time for doing some product reviews in the next year. In the survey members provided a lot of suggestions for products to review and that will help me figure out what to review. I don't think these reviews would take a lot of time, but would be helpful because I've used and tried just about everything out there.

• An improved and more consistent batch of link posts. When 30% members say the link posts are too long, there's a problem. I understand now that a long link post can be intimidating because it represents a big time commitment and because it represents a flood of information to process. After all, you expect me to do the picking and choosing and the list will be more valuable if I do a better job of discarding the peripheral and included only the most interesting, original, timely and informative. As my mentor Dick Davis told me, "there may be a perception that you're throwing everything but the kitchen sink and leaving him with the time-consuming job of separating the wheat from the chaff." I must realize that less is more and I will strive for significant improvement in this area.

• Members will soon have the option to subscribe to a daily email newsletter that will provide quick access to any updates made at the website and some special content that will make this a fast favorite among members. The goal here is make it easier for members to stay on top of everything I do at the website without being forced to visit the website constantly. After all, just like me, your focus should be on the market during trading hours.

• I'm not happy with the timing indicator in its present form and comments received in the survey have helped me consider some ways to improve it.

• Improvements and analysis of my stock screen machine will remain a high priority in 2008. In five years from now, if I dedicate the time and energy as I intend to, it will become one of the most powerful screening systems available. What you see now is only the first step of many to come.

• By the end of 2008, I would like to introduce an entirely new website design that will be more user friendly and accessible. As you know, I made a substantial upgrade to the members' only website last Spring and the next upgrade will be even more important and pave the way to even more good things ahead. A substantial part of the budget will be dedicated to this upgrade.

Time For Transition

With all of these changes, I have committed the rest of January to making this transition. It will take a lot of time for me to restructure the website (both free and paid) before I can really put my plans to work and start the new routine. My programmer and I have also been laboring quite extensively over the past couple of months on the technology that runs the members' only website to allow for many of the solutions I've identified above (like enabling members to access and change information on the membership online and the ability to receive a daily newsletter if you want).

Along with all of this, I will also have to ramp up my trading and significantly modify my daily routine in order to break old habits and create a new daily routine that puts my priorities and goals in balance. None of this will be easy for me and the temptation to revert back to my old ways will be intense. Your patience will be appreciated as I go through this rough transition.

In Conclusion

After much time and consideration, I have to go with what I think is best for everyone and remain true to my objectives both in trading and at the website. I understand and expect that many will not like or accept these decisions. These were tough decisions to make without many easy answers. But, at the end of the day, I must do what I think is right and make the necessary sacrifices to achieve my goals. Nothing that is worth achieving in life comes from anything less than your very best.

Let's make 2008 our best year ever!

Merry Christmas & A Happy New Year!

One of the great privileges of trading for a living is to be able to take time off to spend with family and friends during the holidays. I will return on January 2, 2008.

For those of you who are members, I will be updating the members' only website throughout the next couple of weeks although my top priorities will be focused on what really matters this time of year - enjoying the holidays and taking some time off for rest and reflection.

In so many ways 2007 has been another wonderful year and I look forward to the challenges and opportunities we face together in 2008. I wish you and your family have a Merry Christmas and a happy, healthy, and prosperous new year!

Gone, But Never Forgotten

My aunt, Linda Tomlinson (1946-2007), passed away this afternoon after a long battle with lung cancer.

Always cheerful and full of life, Linda was one who looked at the world with optimism and gratefulness even in her last days. I had the privilege of seeing her just a few weeks ago on my September trip to Ohio where I took the photo you see. Even though we lived many miles apart, visiting her was one of the things I looked forward to the most.

Funeral arrangements are now in the works and I'll be traveling to and from Ohio for the remainder of the week. See you upon my return. - Charles

Just In Time For Christmas

Stocks & Commodities Interview

Although I haven't received my copy in the mail yet, the November issue of Stocks & Commodities has a lengthy interview with yours truly. You can read a clipping of the interview online or, better yet, go out and buy yourself a copy of the magazine to access the entire interview!

As many of you know, Stocks & Commodities is one of my favorite offline reads. Specifically, I really like the fact that they offer in-depth analysis of the use of at least one indicator/strategy per month (along with the code to inport it in various different trading platforms) which is a great way to increase your skill set. In addition, their annual readers' choice awards that allow subscribers to provide their feedback on just about every tool and service out there is a tremendous time saver.

Stock Blogger Meet & Greet

Yesterday was a fun day. I don't get the opportunity to meet with other bloggers very often, especially those which enjoy playing golf.

Mike Steinhardt has developed his own unique approach to stock selection that he shares at his subscription-based website called HEDGEfolios ($40 per month with a free month trial). Although his proprietary system sends out a lot of buy and sell signals, the benefits include lower turnover and tight risk management which are two key ingredients to any sound strategy.

As many of you know from the blogs I read page, Mike also writes a blog where he shares his market thoughts, often covering stories that the mainstream media has either ignored or simply got the story wrong. Honestly, I expect that Michael will go back into professional money management at some point. However, for the time being at least, his desire to spend time with his kids while they are still young is more important than making boatloads of money. As you might expect, I have a tremendous respect for that decision.

I say all of this not as an some blatant advertisement for Michael or his service (you know I don't do that), but to also bring up something that I think will be an exciting thing to look forward to next year. Over the past couple of months, I've had conversations with many well-known bloggers about starting an annual charity golf tournament and conference next year. So far the preliminary feedback I've received has been very positive. The tournament and conference would invite readers from all our blogs and provide a one-on-one opportunity to meet, greet, and get to know their favorite bloggers (even if you don't want to play golf). As a personal goal, I'd also like the tournament and conference fees to be given completely to charity.

If you have lots of experience in setting up golf tournaments and conferences of this nature and would be interested in volunteering a lot of time and energy, please let me know. As a goal, I would like to set something up for the summer of 2008. And, of course, all of you would be invited!

Christmas in September

Like a drug addict who stumbles upon a cache of powerful drugs, the market finally got its fix as Bernanke & Co. decided that the way to solve our economic problems is by lowering interest rates more than expected. Obviously, a market and economy so dependent on easy money, liquidity, and credit this is like being a 5-year old who just unwrapped their favorite present on Christmas morning.

Obviously, arguments like "what does the Fed know that we don't know" will fester as the market makes another climb to new all-time highs (at this pace we'll see them before the end of the month). As I write this, only two stocks within my stock screen machine are lower and money is being put to work aggressively across the board.

Membership Value

Twice a year I ask members to take a survey so I can obtain helpful feedback on ways to improve the website. Many questions I ask offer members the opportunity to provide helpful feedback on things they like the most (and the least) so I understand how I can improve and prioritize my efforts. Although I'm not one to boast, when members were recently asked the following question, I was happy with their response:

Do you think that you're getting good value from your membership?

99.48% of members answered yes. While there are still areas that need improvement (and I'll be working on those for the remainder of the year), I now understand why so many members renew their memberships year after year.

The bottom line is that if you like the free area of this website, you will appreciate the members' only website. I've purposefully kept the membership fee low enough so that most everyone can afford it - just $50 per year or roughly about a $1 dollar per week. If you are interested, you can sign up by visiting my donation page.

On Vacation

I'm currently on vacation until Monday, August 20th, but I will be providing updates (new blog posts, updates to my favorite stock screens, etc.) to the members' only website from time to time.

For those who are new to the website, you may want to look through the archives and favorite posts from the past as well as sign up for my email newsletter. I'll be back soon!

Vacation Time

Bad timing. That's the two words I have used many times today when my wife and I sat down to finalize our upcoming vacation.

Every year since we've been married we've taken at least two weeks every summer for a nice trip/vacation somewhere. (My wife, who is a teacher, goes back to work in a couple of weeks.) In fact, we had previously made plans to go on a nice trip in late July, but I made the serious mistake of canceling that trip because I thought I should be here and watching the market. Heed my advice - don't make that same mistake! If you have a trip planned, don't let the market no matter what alter your vacation schedule. By delaying our trip, it seems like our timing is even worse now than it would have been if we just kept our previous plans.

The bottom line is that it looks like we're going to try to give it another go this week. During this time, I will have limited access to the internet (via laptop and blackberry) and will be making infrequent updates (stock screens, portfolio, blog, etc.). We are planning several trips in and around Minnesota (for hiking, fishing, golf, etc.) so while I won't be far from home, it will be just enough of a vacation to keep the wife happy and for us to have some time together before her summer break ends. And, if absolutely necessary, I can go back to work again if needed. If all goes well, I'll be back full-time on Monday, August 20th.

The good news is that the market usually performs quite well when I take vacation and now that we've finalized our plans today the market rallies like there's nothing to worry about. Sometimes you can't help to feel that the trading gods are after you and I can't help feeling that way right now especially after having to move to cash earlier today and seeing this giant sized oversold rally this afternoon.

Perhaps a vacation is more needed than I realize.

Our 14th Anniversary

"I don't have all the answers. In life, to be honest, I've failed as much as I've succeeded. But I love my wife. I love my life. I wish you my kind of success." - Dickie Fox

Very well put Mr. Fox! Today my wife and I are celebrating our 14th wedding anniversary and it has been a wonderful journey since this wedding photo was taken outside of our church on July 2, 1993.

Rough Six Day Stretch

We're up and running again! Members' can now login to the members' only website!

It's been a tough six days. Problems began last Wednesday (lucky June 13th) when our webhost provider decided to shut us down because of usage overload problems. From then, it was a mad scramble to find an alternative and do so quickly.

After some debate, we decided to go with ViaVerio on Friday who seemed to offer the best solution. They offered a managed private server with all of the bells and whistles, backed by 24/7 telephone support. Little did we know how much we would need to rely on that support.

Between early Saturday morning and Sunday, we experienced major hardware issues requiring numerous reboots and customer service hand-holding. By Saturday night, I decided to cut bait and move to a different company and do so as soon as possible. The problems we were experiencing were unusual and convinced me that ViaVerio simply did not have their act together. This is not unusual in the webhosting industry. Over the years I've had experienced with roughly a handful of providers and all of them have big room for improvement. In fact, I learned today from our customer sales rep at ViaVerio that "they've been having issues with those servers for some time now." Great, that was information that could have come into use a few days ago before we wasted two days, programming time, and lost productivity.

From Sunday morning to this afternoon, we've then been working around the clock to get the website up and running again. My programmer has been patient, vigilant and hard-working throughout and I owe him quite a bit of gratitude. Because I know some of you want to know this - the members' only website is now hosted by mediatemple and we're crossing our fingers now that the worst is behind us. (The free website will remain at TypePad for the foreseeable future). At mediatemple, I'm on the ultra-expensive plan with as much raw firepower that should be able to handle anything we throw at it and more. Which is good, because I'm only half done with the major upgrades planned to the members' only website this year.

So, thank you for you again for your patience. It will be nice to be able to return to the routine tomorrow. :)

Sentiment Headlines

I'm a fast reader. In fact, lightning fast. And, I love to skim over headlines on some websites particularly as a sentiment tell. For example, just a few moments ago (while taking a 5-minute break from other tasks), I decided to pull up RealMoney to see what their gurus are chatting about. Here's a quick snapshot:

I love the titles of these posts: "can't be cautious" and "nothing wrong with averaging up." That pretty much tells you where the sentiment is on the professional side of this tape. In fact, I see that even the bloggers have finally thrown in the towel and turned bullish. Uh oh!

Members' Only Website Update

I'm sorry to report that we are still in the process of making the transition to the new server. A number of unforeseen software/hardware issues have delayed the completion of this emergency transition. While we are doing everything we can, the members' only area will currently remain offline.

As it stands now, we cannot predict when service will be restored but realistically we anticipate that the members' only area will be up and running with 24 to 72 hours. Fortuantely, I add time to every membership to offset these kinds of situations and I assure you that we're putting every effort into restoring service as quickly as possible.

Until then, any updates will be made to this page. Thank you.

Website Issues

We're in the process of making an emergency transfer to a new website server. In the meantime, there will be service disruptions throughout the website, especially within the members' only area. My apologies for the inconvenience.

We will keep you posted on any updates as they occur and I appreciate your patience during this transition.

Cabin Fever

As an astute observer of the obvious, it seems like the market doesn't like this morning's housing report. Perhaps the buy programs will come online like clockwork to save the day, but so far I'm not seeing anything actionable from my vantage point. Then again, I'm a bit biased as I already have one leg out the door.

With temperatures in the 70s and the sun out and shinning, I've already made myself a tee time this afternoon. After spending the entire weekend chained to the computer working on some important upgrades to this website, I've come down with a major bout of cabin fever. Since my concentration is already pretty low and I know it, I see no reason to resist the urge. Hopefully I'll miss some good things this afternoon, but I'd keep expectations pretty low based on what I'm seeing so far.

CNBC Bump

After putting everything else on hold following the CNBC invite, they've just bumped my appearance until next Wednesday. Apparently they were able to book Donald Trump at the last minute instead!

So, it's back to business as usual which means we're on Fed watch for the rest of the day. In the department of be careful for what you wish for, didn't I just say only yesterday that I hoped things would get more interesting today?

Fast Money

I've been called up to make a 3-minute appearance on CNBC's Fast Money this evening at 5PM. I've been asked to talk about the the U.S. consumer and the Fed. If time permits, they may even let me reveal a few of my favorite tips for traders. It should be an entertaining experience and I appreciate the opportunity.

I'm On A Hawaiian Vacation

Like many of you this time of the year, I'm going to be on vacation over the next couple of weeks. We are visiting Kauai, my favorite Hawaiian island. Over the next few days, I'll be spending lots of time on the beach, hiking in the mountains, snorkeling, and my absolute favorite thing - just being lazy in paradise. I'll be back on Monday, July 10th with some new experiences and photos to share. Aloha!

Bontrager Connection

William Bontrager, and his very nice wife Mari, dropped by our home over the weekend. Will is both a very good friend and my tech guru. He makes a living by writing specialized computer programming scripts for people's websites. They both live and travel full-time throughout the United States in their RV.

We spent numerous hours yesterday outlining future projects for The Kirk Report and discussing a long to-do list for him to work on in the coming months. Some of the very important upgrades you'll see, while many other projects will help me organize, automate and manage the website more effectively with a lot less time.

Will is quite a character. Though we only see each other an average of once per year because he and his wife are always on the go, we're in contact by email almost daily. He is both "scary smart" and a real pleasure to be around. He is also former Amish. (Yes, I know that is ironic!)

Bottom line - if you have a website (or manage other people's websites) and would like to add something to it (contact form, special tool, etc.), I'm sure Will can help you. I've known him for the past 8 years and couldn't be more pleased with his work. Frankly, The Kirk Report wouldn't exist without his help, and though I don't say it often as I should, I really appreciate everything he has done for me through the years.

On Vacation

I'm on vacation until Tuesday, June 6th. I will be traveling back to Columbus, Ohio to spend some quality time with mom and we plan to attend the Memorial Tournament.

Don't worry - I'll be taking the laptop and any updates to the trading portfolio and/or market commentary will be posted at the members' only website during this time. See you next week!

Thank You Barron's!

A few weeks ago Barron's Kathy Yakal came up to my home to talk about the market, my background, and this website. Following that interview, Barron's decided to run a feature story in this week's edition. (This is no April Fool's joke!)

First, a big thank you to both Barron's & Kathy for the opportunity. Back in October 2004 Kathy was one of the first to actually write about and recommend The Kirk Report in a major financial publication. As many of you already know, I don't do anything to publicize this website so these efforts are greatly appreciated.

For those of you who are new to my website, please feel free to take a look around. I generally post new content during the trading week. If you want to dig in right now, please look through the archives.

I'll be back on Monday before the opening bell to start the second quarter. I have a feeling that it is going to be an interesting one. See you then!

Labor Day Weekend!

I'll be back before the opening bell on Tuesday, September 6th. Until then, I wish everyone safe travels and a good holiday.

Over the next few days, I plan to play a little golf, finish up a few projects, visit with family, and just get in a little rest. I've been putting in some very long hours of late and I need the time to recharge my batteries.

See you soon!

I'm On Vacation

I will be on vacation until Monday, August 1st!

While I'm away, feel free to review the extensive archives, take full advantage of the search function to look up your favorite topics, or sign up for my newsletter. I'll be back very soon.

During this time, I'll be providing sporadic commentary only at the members' only website. Have a wonderful two weeks!

I'm On Vacation

I will be on vacation until Monday, August 1st!

While I'm away, feel free to review the extensive archives, take full advantage of the search function to look up your favorite topics, or sign up for my newsletter. I'll be back very soon.

During this time, I'll be providing sporadic commentary only at the members' only website. Have a wonderful two weeks!

Super Size Me

Writer/director Morgan Spurlock spent 30 days eating nothing but McDonald's for his hugely successful, Oscar-nominated 2004 documentary Super Size Me. Now, Spurlock has convinced others to live in someone else's shoes for 30 days for his new FX series called 30 Days which premiers tonight. I've got my TiVo set to record the episode in which they try to survive a month working for minimum wage in Columbus, Ohio. It should be an eye-opener!

Thank You Barron's

Once again Theresa Carey & Kathy Yakal have provided The Kirk Report with a positive writeup in Barron's. Thank you! Here is what they wrote:

"We've reviewed several financial blogs, but our overall favorite is still the first we covered in Oct. 2004, the Kirk Report (www.kirkreport.com). It's authored by professional trader/writer Charles E. Kirk, who shares his market musings and investing thoughts (he doesn't make recommendations), provides links to related Web content and tracks the market in his daylong conversations. Nicely done: Kirk's portfolio was up 65.3% in 2004. Donors of $50 and up can access his updated portfolio holdings and trading notes. Blogs like this are quite beneficial to people who don't have time to read through the financial press."

Although I'm sure I don't deserve the continued praise amid the explosion of excellent stock market blogs I've seen in recent weeks, I will keep working hard to make this website even better in the coming months!

Alan F. Wilt (1937-2005)

I am greatly saddened to announce the death of Alan F. Wilt. On Saturday, May 7th, Alan lost a very short battle with Interstitial Lung Disease.

I had the great pleasure of knowing Alan since 1990, when I began dating his daughter in college. His love and support for his family, as well as his dedication to making a difference in the world impacted thousands of lives in a positive and meaningful manner. If a man's success can possibly be measured by how many ways he made the world a better place, it would be difficult to find someone more successful.

Alan was a Professor Emeritus of History at Iowa State University. His professional career was focused on military and German history, in particular those events surrounding World War II. He was the foremost expert on the chiefs of staff in the U.S. & Britain during World War II.

In addition to teaching, he wrote several books including The Atlantic Wall, War From The Top, Nazi Germany, The French Riviera Campaign, and Food For War. Recently he had been spending time working on what he frequently said would be his most important book; it was left unfinished.

On a personal note, Alan was a friendly, gregarious, intelligent but exceedingly humble man. Anyone who had the pleasure of spending time with him wanted to spend more. And, as his son-in-law, I always felt the same way. Looking back over the past 15 years, I can't remember a single time we didn't get along or a time I didn't tremendously enjoy being around him.

In the end, Alan was one of my favorite people in this world and I can't possibly imagine not having him with us in the future. It was always so comforting to know that he would be a part of my life and I truly wish I had at least another 15 or more years to spend, learn, and be with a man who I so respected, admired, and loved with all of my heart.

(Please note: Alan's funeral has been set for Friday, May 13th and I will be taking one week off to spend with family and friends. I will return on Monday, May 16th. For more information on Alan, please read his obituary in the Des Moines Register.)

Alan F. Wilt (1937-2005)

I am greatly saddened to announce the death of Alan F. Wilt. On Saturday, May 7th, Alan lost a very short battle with Interstitial Lung Disease.

I had the great pleasure of knowing Alan since 1990, when I began dating his daughter in college. His love and support for his family, as well as his dedication to making a difference in the world impacted thousands of lives in a positive and meaningful manner. If a man's success can possibly be measured by how many ways he made the world a better place, it would be difficult to find someone more successful.

Alan was a Professor Emeritus of History at Iowa State University. His professional career was focused on military and German history, in particular those events surrounding World War II. He was the foremost expert on the chiefs of staff in the U.S. & Britain during World War II.

In addition to teaching, he wrote several books including The Atlantic Wall, War From The Top, Nazi Germany, The French Riviera Campaign, and Food For War. Recently he had been spending time working on what he frequently said would be his most important book; it was left unfinished.

On a personal note, Alan was a friendly, gregarious, intelligent but exceedingly humble man. Anyone who had the pleasure of spending time with him wanted to spend more. And, as his son-in-law, I always felt the same way. Looking back over the past 15 years, I can't remember a single time we didn't get along or a time I didn't tremendously enjoy being around him.

In the end, Alan was one of my favorite people in this world and I can't possibly imagine not having him with us in the future. It was always so comforting to know that he would be a part of my life and I truly wish I had at least another 15 or more years to spend, learn, and be with a man who I so respected, admired, and loved with all of my heart.

(Please note: Alan's funeral has been set for Friday, May 13th and I will be taking one week off to spend with family and friends. I will return on Monday, May 16th. For more information on Alan, please read his obituary in the Des Moines Register.)

Volatility

If the futures are providing a clue to today's action, get ready for a volatile day out there. I'm impressed that the futures were able to shake off the CPI. I'll see you in a few hours.

U.S. March CPI Increases +0.6%

U.S. consumer prices jumped a seasonally adjusted +0.6% in March, with core prices increasing a larger-than-expected 0.4%. Energy, clothing and hotel prices increased during the month, offsetting falling prices for new cars and prescription drugs. Premarket futures have turned red in response. READ

Imergent Plays Hardball

How risky is it to say something negative about a company? Imergent (IIG) just filed a $15 million dollar lawsuit against StockLemon.com. And, you wonder why I don't talk more about excellent shorting opportunities!

Only 110,000 Jobs!

Change in non-farm payrolls for March came in at 110,000 versus 220,000 exp - unemployment rate for March came in at 5.2% vs 5.3% exp. Bottom line - this is a much weaker number than expected. The 10-year yield just fell to 4.40% in reaction and premarket futures are up!

Gas Prices

Anthrax Scare

The market is having a difficult time as a new anthrax scare makes the rounds. The market has usually done a good job of shrugging off concerns over terrorism, but obviously traders are going to look to profit from the headlines as we see from the moves into stocks like AVAN, CPHD, & VXGN.

Other than running a few screens, catching up on my email, and getting caught up on my reading, I'm not motivated to stick my neck out at this point.

I'll Be Back On Monday, March 14

"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely." - Warren Buffett

You won't have to wait long for me to return back from vacation, and in the meantime, please feel free to explore around. This is especially true if this is your first visit to The Kirk Report.

If you have a few minutes, here are three quick suggestions: 1) read previous posts at the archive, 2) put my search engine to work by looking up any stock or search term, and/or 3) sign up for my free newsletter which will be sent out when I return on Monday, March 14th. See you soon!

Jobs Report: +262,000

• Non-farm payrolls (Feb): 262k vs 225k exp.


• Manufacturing payrolls (Feb): 20k vs 7k exp.


• Unemployment rate (Feb): 5.4% vs 5.2% exp.


• Avg. hourly earnings m/m (Feb): 0.0% vs 0.2% exp.


• Avg. hourly earnings y/y (Feb): 2.5% vs 2.6% exp.


• Avg. weekly hours (Feb): 33.7% vs 33.8% exp

Happy New Year!

I would like to wish you a very happy new year! Like 2004, this new year will bring plenty of new opportunities and I'm looking forward to it. If 2005 is anything like 2004, it will be an interesting and prosperous time.

On Friday, the major market indices closed out the year with gains of +3.1% in the Dow, +8.6% in the Nasdaq, +9.0% in the S&P, and +17.0% for the Russell 2000. Not a bad year, to say the least, despite several months of sideways movement. Interestingly enough, looking through the predictions many made this time last year, most of the gurus called it right by predicting high single-digit gains for the major averages in 2004.

As with previous years, quite a few readers ask me for predictions for the new year and, even though I find the predictions of others very entertaining, I rarely make them myself. I suppose the reason has to do with the fact that I'm not much of a crystal ball reader. My strategy, with trading and investing, is to simply make the most of of the cards I have been dealt by Mr. Market. To that degree, I accomplished that goal in 2004 and, with hard work and some luck, I hope to achieve the same result in 2005.

While I won't make any bold predictions, I will provide you a helpful tip that will go a long way to achieving your goals in the coming year as well as the years that follow. As soon as possible, sit down and write 12 goals on a piece of paper. Then put that list of goals where you will see it often, if not on a daily basis. Your bathroom mirror is a good place, as well as your wallet. I do the latter.

To help you get started, you should pick 2 goals that can be reached in two months, two more goals in six months, two more in 12 months, and then have six long-term goals. In order of time, they should go from being the most achievable to the most difficult and every year you'll want to add new goals to the list. By having them in writing where you can see them, you'll be well motivated to make those changes that are required before you can achieve your dreams. If you need additional motivation, you may also want to share the list with those who are close to you who can help keep you focused on those goals.

Of course, setting goals is only the first step. They key is to then ask yourself as frequently as possible if you're doing everything you can to work toward your goals. If you think of it in this way, you'll be amazed on how your habits will change so that those goals become achievable, frequently more easily than you previously thought.

I give this piece of advice because I have followed it for the past few years and I have found it very helpful. That's one of the reasons why I lost 70 lbs of weight (and kept most of it off), why I was able to achieve the returns I have from my trading last year, and while I'm slowly, but surely on the path to achieving financial freedom. Many of you desire the same things and while there will certainly be failures along the way, the key is to keep moving forward toward those goals.

As someone once said, if you don't know where you want to go, you'll probably end up somewhere you don't want to be. By knowing what you want to achieve in the weeks, months, and years ahead, you'll make the first smart step. There's no better time than the present to get started.

See you on Monday!

Merry Christmas & Happy New Year!

I'm currently on vacation, but I'll be back on January 3rd, 2005. If you would like to receive a friendly reminder by email when I return, just subscribe to my free newsletter.

Like 2004, I expect 2005 provide us with plenty of new & exciting opportunities and I look forward to sharing them with you.

Until then, I hope your travels are safe, your holidays happy, and as always, I wish you and your family plenty of good health, prosperity, and joy for the new year!

Nonfarm Payrolls 112K vs 200K consensus

So the jobs report doesn't confirm the bullish chatter after all. Does it really matter? One of the main convictions of the herd is that the job market is finally showing some major improvement.

Nevertheless, the bulls have been doing a good job of spinning any bad news that hits the wires. Case in point - interest rates are going up so that means the economy is stronger, the falling dollar will take care of the deficit, etc. Given the current mood of the herd, it wouldn't surprise me to hear that a weak jobs report is bullish since companies don't have to pay more for increasing their staff.

But, as we know from the latest consumer confidence surveys and same-store sales reports, not all is right with the American consumer. Even though the economy and the market are not dependent on one another over the short-term as inflows trump everything, it will be interesting to see what affect if any today's news will have. If current trends continue, investors will focus on Intel and maintain the view that "we're fine until January."

I'll be on the road today and I'll see everyone next week! Have a great day. I'll leave you with a few interesting articles I found this morning:

• Henry Blodget tells the truth about mutual funds
• The wild cards in the bond market
• The structural breeding ground for rising inflationary pressure
• Gold & Silver remain undervalued
• Mr. Icahn is furious about the Perry trade
• Top insiders at Sears (S) take their money and run
• Will Dubya raise taxes?
• If unemployed, just go work for yourself
• Art prices are setting records again

Trading Volumes Dramatically Increase

I know from personal experience that individual investor's fascination with trading stocks frequently goes up and down depending on overall market conditions. (i.e. when stocks rally small retail investors trade more frequently). Wall Street knows this as well, that's why they are so excited to see overall trading volumes significantly uptrend, like those reported by Etrade this morning. They haven't been this good since April 2004.

The real question is whether such higher trading volumes provide a good contrarian indicator for market-timing purposes? We all know that the small time retail investor is usually the last one to the party, but I haven't personally seen any research that confirms the direct correlation between trading volume increases and market performance. In recent history, we know that