2007 Review
First, thank you all for subscribing to the Newsletter. I hope
each of you and your families have a wonderful 2008.
Now that 2007 has passed into history, it is time for me to
review my performance in my subscription service trades. Trend Trader
had a very good year. I closed 35 trades during the year and 94% were
winners (33 out of 35). In fact, I have closed 26 straight winners
that have an average gain of $1.19 a share. Including the 2 losers,
the average gain per share for closed trades worked out to 95 cents a
share. I was in 2 trades for over 4 months, but held the remaining 33
trades for an average of 12 days each. Factoring in the longer trades,
the average time in trade increased to only 20 days. I still had a
couple open positions in Trend Trader at year end. One is down
substantially after a gap down, but I am writing covered calls on it
to reduce the loss and bring in monthly income. I could have used it
for a tax loss in '07, but I know I have a large long term capital
gain in 2008 and will use the position to take a loss against that
gain if the stock does not turn profitable. The other position I
entered some time ago to produce regular income and it has performed
quite well in that regard, returning almost 10% per year on my
original investment. I began Trend Trader in March of 2006 and it has
had 84% winners since inception.
Option Trader is my oldest service. It began in 2004 and has had
70% winners since then. In 2007, Option Trader enjoyed 68% winners in
the 34 trades I closed. The average trade excluding only one longer
trade (106 days) was 15 days. The size of investment in my Option
Trader trades is generally less than in the Trend Trader trades where
I am actually buying stock. Risk is ordinarily limited in the option
trades as well through strategies such as spreads or condors though I
do also make straight directional trades too. At the end of 2007, I
had 5 open plays, one of which looks like it could provide substantial
profit at January expiration and the others are spreads. Two of the
spreads expire in January and look like they should wind up with
relatively small gains or losses. The other two have quite a lot of
time to expiration and permit me to adjust as conditions suggest. The
winning trades averaged a gain of 86 cents a share and I did enjoy an
overall gain in my Option Trader trades again this year.
In 2007, I closed 28 trades in the $10 Trader. I did suffer a
dip from last year in terms of winning percentage when I achieved 64%
winners this year. Overall, the winning percentage on these cheaper
stocks since I began the $10 service in April of '06 is 75%. The
average cost per share in 2007 was $6.20. I was in the average trade
for 2 weeks and, including losses, averaged a gain of about 1% on each
2 week trade. I must confess, I did have a more difficult time with
these cheaper stocks as a result of market conditions including high
volatility in 2007.
When I look back, I certainly can't complain when my worst
performing service had 64% winners and my best hit 94% winners.
I truly enjoy writing the Newsletter articles and appreciate the
bloggers and emails. I try to answer each communication personally
and will continue to do so as long as time permits and the writers
recognize I cannot and do not give personal investment advice. I do
have one favor to ask of those very few who complain about the
articles or portions thereof in the blog and emails. Though I don't
mind the complaints, I would ask that those few complainers refrain
from talking about how much they pay for the Newsletter since they get
it for FREE!
Good Trading!
Bill Kraft
January 5, 2008
Copyright 2008, Makin' Hay, Inc., All Rights Reserved
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