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By: Chris Rowe — September 26, 2007

Tycoon Reader at Chris' House!

A quick note on this market ...

Consumer confidence is at a two-year low.  Oil is up around $80.00.  Major retailers are lowering expectations on sales, the dollar looks like it's going to get even weaker, and yes, the housing market is still headed downhill.  

But be sure not to get too wrapped up in the "story" of the moment, or else you'll be the person on the other side of my trade in a stock market turnaround.  Focus on technical indicators.  The only thing you'll ever be able to know for certain is what's happening currently.

Remember, there is always a bear argument and a bull argument.  The question is, which one is highlighted currently while the other's volume is turned way down?  That's why we follow technical indicators.  We don't ask why the market is doing what it's doing.  Instead we focus on clearly understanding what exactly the market is currently doing, and we act on it. 

Our technical indicators are showing increasing strength, with more to go on the upside.  As soon as that changes, we act on it, and we'll profit from the next trend, whether it be horizontal or down.  There are over 10 major warning signs of a trend reversal that I know to watch out for that I can think of off the top of my head in a split second. 

All you have to do is understand what the signs are.  Anyone who doesn't believe in technical analysis or technical indicators never bothered to investigate either what they actually are or their historical accuracy.  They are usually the same people who still believe that options can only INCREASE stock market risk!


Anywho ... I can't let this week's article pass by without talking about ...

3 Years of Tycoon, 2 years of The Trend Rider (Happy Anniversary TTR!)

By the way, thanks, Ben, for Monday's article.  Made me feel all warm and fuzzy.  (Thanks for the comments, too, Tycoon Readers.)

First I want to congratulate our readers for evolving with the times. 

Since launching The Tycoon Report three years ago, and The Trend Rider two years ago, I have seen a change (on aggregate) in the questions being asked, and the comments being made. 

I'm not going to suggest that the apparent increased understanding of the stock market is solely a result of Tycoon, because that would suggest (arrogantly) that you don't know how to click to another website or read and learn from others. 

But, for whatever reason, whether it be the result of the internet's rapidly advancing our knowledge or elevated interest in the stock market from individual investors (which we tend to see in the last 2 - 3 years of a bull market), I feel like the people who have been writing us seem to have really stepped their game up over the last two or three years.

Some of you have even told me that you write down every mistake and every lesson learned.  That's awesome! 

I have something to tell you ...

Over the last few weeks, I've had the pleasure of teaching one Tycoon Reader  - face to face - how to take the same exact approach that I take to investing/trading. 

Because I have been creating a new investing course, and then actually teaching it to a reader over the last three weeks at my house, I feel like my own game is tighter than ever. 

It was an awesome way to organize my thoughts more than I had ever been forced to do.  You think you have all of your thoughts clear and organized until you have to teach it to someone else (while being recorded).  I couldn't afford to be wrong about anything I was teaching, so the pressure was on.

Anyway, I was forced to do it so that I could put the lesson on video in a way that anyone could understand.  So my point is that writing your thoughts down, as if you have to share them with the world (or at least someone you care about), is one of the greatest exercises ever.

Few people (including myself) are disciplined enough to actually write down EVERYTHING that they learn on any subject whether it be from the web, a book or an expensive mistake.  But if you make yourself a journal (that you study over time), then you are guaranteed to improve your skill rapidly.

We launched The Trend Rider two years ago, so happy anniversary to me, and to all the members who have been with me since the beginning.

In light of the two-year anniversary of The Trend Rider, I'll reflect a bit (for your entertainment) ...

Happiest Personal Experiences

1. Launching Tycoon with Dylan
2. Launching The Trend Rider
3. Meeting my wife Katie
4. Marrying Katie
5. Katie giving birth to Maya

Most nerve-wracking experiences

1. Launching Tycoon with Dylan
2. Launching The Trend Rider
3. Meeting my wife Katie
4. Marrying Katie
5. Watching Katie give birth

Hardest work - ever

1. Doing everything that I do (Trend Rider: Trade alert research, Monday Commentaries, Position Updates, answering member e-mails, Tycoon Report articles) while creating the investment/trading educational video and book that I have been promising Tycoon readers for about a year now.  (Sorry folks, but it took about six months of research to figure out the best and most effective way to do this before I could even start the job.) 

2. Making absolutely sure that I spend time with my family while I do all of this.

One lesson, in my house, that the Tycoon Report reader told me that he learned, was that it's now going to be HARDER to pick stocks!

Now that he knows what to look for, and what to watch out for, he is cursed with high standards.  (This inevitably will lead to much higher profits.)  Anyway, I thought that if I were going to write about the TTR anniversary in this week's Tycoon Report, I should also have a profitable point ...

High Standards

The older you get, the higher your standards become when it comes to the friends that you choose, the people that you allow to take up your precious time (or said more nicely, the people that you decide are well worth spending your precious time on), and the significant other that you decide to spend your time with, or stop spending time with.

The same holds true with stocks.

And time is more precious than money (as long as you don't absolutely hate your life every day for not having money).  However, if you make the mistake of regretfully spending precious time on a particular human, at least you can start all over again since your maker has given you the gift of more time.

But with the stock market, you don't have the luxury of starting out fresh.  Many people grow up and find that they now have higher standards in the investments that they choose, but the problem is that they are all out of funds by that time. 

Maybe they still have some, but maybe they lost 70% of the investment capital along the way.  In this case, it would have been better to sit in cash, and rather than spend a few years losing money, it would make more sense to spend a few years educating oneself, while having a minimal amount invested in stocks.

So my point, I guess, is this:

If you can't decide which of the many ideas in front of you to choose from, then your screening process isn't tight enough.  If you're frustrated sometimes because you can't seem to find a good stock idea, then you're just going through what the greatest investors in history often experience.  Pat yourself on the back.   

Only bet on high probability outcomes.  Only trade when the odds weigh heavily in your favor.  Otherwise, sit on the sidelines, and collect 5%.

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