144
Strategic Investing Fred Richards AAII – San Francisco March 17, 2012
Stra
teg
ic I
nve
stin
g
Fre
d R
ich
ard
s
AA
II –
San
Fra
nci
sco
Ma
rch
17
, 2
01
2
Dis
cla
ime
r
© S
tra
teg
ic I
nve
stin
g2
The
con
tent
of t
his
pres
enta
tion
is fo
r th
e ed
ifica
tion
of th
e au
dien
ce a
nd
has
not b
een
endo
rsed
, no
r ap
prov
ed o
f, by
any
of t
he p
erso
ns,
com
pani
es,
nor
web
site
s m
entio
ned
here
in,
or d
urin
g th
e co
urse
of t
his
pres
enta
tion.
The
aut
hor
and/
or s
peak
er h
as a
ttem
pted
to
verif
y al
l inf
orm
atio
n bu
t doe
s no
t tak
e an
y re
spon
sibi
lity
for
any
actio
n w
hich
a m
embe
r of
any
aud
ienc
e (b
oth
in p
erso
n or
in a
sub
sequ
ent
venu
e) m
akes
of t
he in
form
atio
n w
hich
is
pre
sent
ed h
erei
n.
Res
ults
obt
aine
d in
prio
r ye
ars
are
no g
uara
ntee
of r
esul
ts e
ither
this
yea
r or
in th
e fu
ture
.
You
an
d y
ou
alo
ne
are
resp
on
sib
le f
or
any
dec
isio
ns
you
mak
e b
ased
u
po
n t
he
info
rmat
ion
ob
tain
ed d
uri
ng
th
e co
urs
e o
f th
is p
rese
nta
tio
n.
Fre
d R
icha
rds .
Ma
rch
17
, 2
01
2
•W
e g
rate
fully
ack
no
wle
dge
th
e d
ata
pro
vid
ed
by
vari
ou
s so
urc
es
in t
his
pre
sen
tati
on
an
d
ha
ve id
en
tifi
ed
on
ea
ch c
ha
rt t
he
so
urc
e f
rom
wh
ich
th
e c
ha
rts
we
re o
bta
ine
d.
•S
pe
cia
l th
an
ks t
o M
ark
et
Ne
ws
Inte
rna
tio
na
l a
nd
Ha
ver
An
aly
tics
.
•C
urr
en
t A
gri
cult
ure
da
ta c
ou
rte
sy o
f P
roFa
rme
r.co
m.
Ack
no
wle
dge
me
nts
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
3
Wh
at’
s y
ou
r in
ve
stm
en
t g
oa
l?
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
4
© S
tra
teg
ic I
nve
stin
gM
arc
h 1
7,
20
12
5
Ma
rch
17
, 2
01
26
© S
tra
teg
ic I
nve
stin
g
Ma
rch
17
, 2
01
27
© S
tra
teg
ic I
nve
stin
g
Ma
rch
17
, 2
01
28
© S
tra
teg
ic I
nve
stin
g
Po
int
& F
igu
re C
ha
rtin
g
Pri
ce i
s P
rim
ary
Fo
cus
Ma
rch
17
, 2
01
29
© S
tra
teg
ic I
nve
stin
g
We
nt
to W
all
Stre
et
for
Fin
al
Inte
rvie
w o
n
Ma
rch
1,
19
62
AA
#1
Cra
she
d
Ma
rch
1,
19
62
Jam
aic
a B
ay,
NY
C
Arn
old
Kir
keb
y
de
ad
Ma
rch
17
, 2
01
21
0
Th
e B
eg
inn
ing
of
Tech
nic
al
An
aly
sis
usi
ng
Vo
lum
e -
19
63
© S
tra
teg
ic I
nve
stin
g
Wo
rds
of
Wis
do
m –
Will
iam
T.
Go
lde
n
Ma
rch
17
, 2
01
21
1
•In
vest
85
% o
f yo
ur
fun
ds
in s
tock
s w
ith
in
cre
asi
ng
sa
les
an
d e
arn
ing
s!
•In
vest
15
% o
f yo
ur
fun
ds
in s
pe
cia
l si
tua
tio
ns
•D
oe
s th
e c
om
pa
ny
ha
ve a
larg
e m
oa
t?
•D
on
’t b
e a
fra
id t
o o
nly
rid
e o
ne
ho
rse
!
•Ju
st b
e s
ure
it
is a
win
ne
r!
•C
ut
you
r lo
sse
s q
uic
kly!
•W
he
re a
re t
he
Cu
sto
me
r’s
Yach
ts?
© S
tra
teg
ic I
nve
stin
g
Are
yo
u e
lep
ha
nt
hu
nti
ng
?
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
12
MIC
RO
SOFT
-M
SFT
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
13
Re
bu
y Se
p
20
08
TR
AC
TOR
SU
PP
LY -
TSC
O
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
14
GO
LD
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
15
Ad
d t
o
po
siti
on
Oct
20
09
MA
STE
RC
AR
D -
MA
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
16
Ad
d t
o P
osi
tio
n
Jun
20
09
OR
are
yo
u s
ee
kin
g b
ug
s a
nd
fle
as?
Th
e a
nsw
er
de
term
ine
s yo
ur
lon
g-r
un
in
vest
me
nt
succ
ess
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
Slid
e 1
7
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
18
MO
AT
S A
RE
IM
PO
RTA
NT
!
AN
D
SO I
S R
IDIN
G O
NE
HO
RSE
!
Th
e c
on
fusi
on
insp
ire
d b
y h
op
e!
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
19
Str
ate
gic
In
vest
ing
’s M
issi
on
Sta
tem
en
t
•Fo
cus
on
sto
cks
wit
h in
cre
asi
ng
re
ven
ue
s a
nd
pro
fits
.
•Se
ek
Co
mp
eti
tive
wa
lls
or
“Mo
ats
”
•Is
th
e c
om
pa
ny
an
inn
ova
tor?
•W
he
re d
o y
ou
ra
nk
the
Ma
na
ge
me
nt?
•D
o t
he
y h
ave
a m
ea
nin
gfu
l st
ake
in
th
e
com
pa
ny?
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
20
Succ
ess
re
qu
ire
s u
nd
ers
tan
din
g:
•M
ajo
r tr
en
ds
in e
con
om
ics
tha
t ca
n a
ffe
ct m
ark
ets
•A
sse
t a
lloca
tio
n t
imin
g s
tra
teg
ies
•P
olit
ica
l re
alit
ies
•D
em
og
rap
hic
s
•T
he
co
nce
pt
of
mo
me
ntu
m in
tra
din
g
•T
he
re
qu
ire
me
nt
for
du
e d
ilige
nce
be
fore
inve
stin
g
•T
he
ne
ed
fo
r a
dis
cip
line
d a
pp
roa
ch t
o s
tock
s
•A
n a
pp
reci
ati
on
fo
r in
no
vati
on
th
at
will
aff
ect
th
e
futu
re
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
21
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
22
Co
nce
pts
of
Litt
le P
ract
ica
l U
se
Ma
rch
17
, 2
01
22
3
•M
od
ern
Po
rtfo
lio T
he
ory
–A
ssu
me
s m
ark
et
pa
rtic
ipa
nts
ne
ver
ma
ke m
ista
kes
–A
ssu
me
s a
ll ri
sks
can
be
he
dge
d a
nd
ne
ver
me
lt d
ow
n
–A
ssu
me
s e
very
on
e k
no
ws
the
“co
rre
ct p
rice
”
–A
ssu
me
s vo
lati
lity
leve
ls t
ha
t a
re n
ot
rea
listi
c
–C
rea
tes
secu
riti
es
tha
t b
eco
me
we
ap
on
s o
f m
ass
fin
an
cia
l d
est
ruct
ion
, i.e
., c
red
it d
efa
ult
sw
ap
s, o
the
r d
eri
vati
ves
–Im
plie
s th
at
no
n-r
eg
ula
ted
ma
rke
ts a
lway
s fu
nct
ion
we
ll
•Sh
arp
e R
ati
o
•D
ive
rsif
ica
tio
n
•P
ost
-mo
de
rn P
ort
folio
Th
eo
ry
© S
tra
teg
ic I
nve
stin
g
Wh
at’
s yo
ur
Nic
he
?
Ma
rch
17
, 2
01
22
4
•In
div
idu
al
Inve
sto
r o
r O
PM
?
•G
row
th v
s. V
alu
e
•In
com
e/D
ivid
en
d
•La
rge
, M
ed
ium
or
Sma
ll
•Sm
all
Ca
p v
s. L
arg
e C
ap
•A
gg
ress
ive
vs.
Co
nse
rva
tive
•P
erf
orm
an
ce v
s. D
ive
rsif
ica
tio
n
© S
tra
teg
ic I
nve
stin
g
Co
nce
pts
to
Co
nfu
se .
. .
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
25
•M
AC
D
•B
OLL
ING
ER
BA
ND
S
•F
IBO
NA
CC
I
•K
ELT
NE
R C
HA
NN
ELS
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HIM
OK
U C
LOU
DS
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RA
BO
LIC
SA
R
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WA
P
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CI
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RIX
•ST
OC
HA
STIC
S
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HA
IKE
N O
SC
ILLA
TO
R
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HA
IKE
N M
ON
EY
FLO
W
•FO
RC
E I
ND
EX
•P
VO
•W
ILD
ER
S D
MI
(AD
X)
•A
RO
ON
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RO
ON
OS
CIL
LAT
OR
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CT
R L
INE
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ND
ON
AN
DO
NA
ND
ON
EC
ON
OM
IC I
ND
ICA
TO
RS
AN
D
MA
RK
ET
OV
ER
VIE
W
Fre
d R
ich
ard
s
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
26
Frid
ay
clo
se 1
1/1
1/2
01
1
Th
e M
ark
ets
Inv
est
or’
s B
usi
ne
ss D
ail
y®
Su
mm
ary
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
27
IBD
®C
urre
nt O
utlo
ok
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
28
Fu
ture
ea
rnin
gs
fore
cast
s vi
a N
AS
DA
Q
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
29
Ba
sic
Tre
nd
Co
nce
pts
Th
e S
imp
le T
imin
g I
nd
ica
tor
Sup
po
rt/R
esi
sta
nce
Lin
es
Ch
an
ne
ls
Acc
um
ula
tio
n/D
istr
ibu
tio
n L
eve
ls
Th
e S
imp
le T
imin
g I
nd
ica
tor
•It
is a
mo
vin
g a
vera
ge
cro
ss-o
ver
syst
em
.
•St
rate
gic
In
vest
ing
use
s a
n 8
x20
sim
ple
mo
vin
g a
vera
ge
.
•H
igh
Gro
wth
Sto
cks
(HG
SI)
use
s a
9x1
7
exp
on
en
tia
l m
ovi
ng
ave
rag
e.
•A
va
rie
ty o
f sy
ste
ms
are
in
use
.
© S
tra
teg
ic I
nve
stin
gM
arc
h 1
7,
20
12
31
NA
SD
AQ
–8
x 2
0 S
MA
Ma
rch
17
, 2
01
23
2©
Str
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In
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S&
P 5
00
–8
x 2
0 S
MA
Ma
rch
17
, 2
01
23
3©
Str
ate
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In
vest
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Sim
ple
Ch
art
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Te
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Ma
rch
17
, 2
01
2©
Str
ate
gic
In
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ing
Slid
e 3
4
•Tr
en
d L
ine
s
•Su
pp
ort
/Re
sist
an
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eve
ls
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ovi
ng
Ave
rag
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ha
nn
els
•C
an
dle
stic
ks,
OH
LC,
HLC
, C
lose
on
ly
Su
pp
ort
/Re
sist
an
ce –
Tre
nd
Lin
es
Ma
rch
17
, 2
01
2Sl
ide
35
© S
tra
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nve
stin
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Acc
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ula
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istr
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Acc
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istr
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tio
n
© S
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ic I
nve
stin
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7M
arc
h 1
7,
20
12
Inst
itu
tio
na
l Bu
yin
g –
20
11
-2
01
2
Ma
rch
17
, 2
01
2©
Str
ate
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In
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Slid
e 3
8
Th
e B
ig B
oys
Att
itu
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ab
ou
t th
e
Eco
no
my
Ma
rch
17
, 2
01
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Str
ate
gic
In
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Slid
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9
Will
th
is F
TD
fa
il?
Ma
rch
17
, 2
01
2Sl
ide
40
Da
ta s
ou
rce
: In
vest
or’
s B
usi
ne
ss D
ail
y. U
sed
wit
h p
erm
issi
on
.
© S
tra
teg
ic I
nve
stin
g
A +
B s
ug
ge
st c
au
tio
n!
Ma
rch
17
, 2
01
2Sl
ide
41
© S
tra
teg
ic I
nve
stin
g
Vo
lati
lity
no
t a
fa
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low
Ma
rch
17
, 2
01
2©
Str
ate
gic
In
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ing
Slid
e 4
2
Wo
rds
of
Wis
do
m f
rom
Ha
rva
rd
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u c
an
no
t b
eli
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yth
ing
yo
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ea
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n t
he
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ew
Yo
rk T
ime
s
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nd
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he
Wa
ll S
tre
et
Jou
rna
l
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SNB
C,
CN
N,
CN
BC
an
d o
the
rs)
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he
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ll lie
!•
Will
iam
A S
ah
lma
n,
Pro
fess
or
an
d A
sso
cia
te D
ea
n,
HB
S, M
ay
20
11
, in
Da
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Ma
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17
, 2
01
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Str
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43
Se
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17
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Str
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45
21
02
= 4
89
1
19
84
= 2
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Ma
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17
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Str
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53
On
ly $
1.2
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Tri
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n F
Y2
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1..
GA
AP
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Ma
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17
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Str
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De
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17
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Ma
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01
2©
Str
ate
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In
vest
ing
14
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Wh
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Ma
rch
17
, 2
01
2©
Str
ate
gic
In
vest
ing
14
4
