VIX and More Subscriber Newsletter Prices to Increase as of March 31, 2012

Effective March 31, 2012, as the VIX and More subscriber newsletter begins its fifth year, there will be an increase in price from $30/month to $40/month and from $300/year to $400/year.

This is the first time I have raised the price since the launch of the newsletter. Part of the reason for the price increase is that since last July I have been sharing more specific and actionable trading ideas. The newsletter has been significantly underpriced since it was launched – and the upcoming price change is a small acknowledgement of that fact. The good news is that any existing subscriber – monthly or annual – can lock in the current $300/year price by extending their subscription term for an additional year at any time through the end of March.

I have received some questions about how to switch from a monthly to an annual subscription, so for those who may be interested, the easiest way to convert from a monthly to an annual subscription is to:

1)  Cancel existing monthly subscription by clicking on the “Cancel a Subscription – Unsubscribe” button that is just below the CBOE ad and just above the blog archive section on the right column. (I will manually add whatever time remains on your monthly subscription to your new annual subscription.)

2) Begin a new annual subscription by clicking on the Annual Subscription button on the upper section of the same right column 

For those who have an existing annual subscription and wish to extend their term for another year at the current $300/year rate, just follow the instructions for beginning a new annual subscription above.

If you have a problem with canceling your monthly subscription, just let me know and I will do it for you. PayPal will not allow me to add a new subscription for anyone or modify the terms of an existing subscription agreement.

Last but not least, for those who are not yet subscribers and might be interested in locking in the current rates for a full year, this would be a good time to take advantage of the 14-day free trial (see top of right column) and switch to an annual subscription by the end of the month.

VIX and More Subscriber Newsletter Prices to Increase as of March 31, 2012

Effective March 31, 2012, as the VIX and More subscriber newsletter begins its fifth year, there will be an increase in price from $30/month to $40/month and from $300/year to $400/year.

This is the first time I have raised the price since the launch of the newsletter. Part of the reason for the price increase it that since last July I have been making more specific and actionable trading ideas available. The newsletter has been significantly underpriced since it was launched – and the upcoming price change is a small acknowledgement of that fact. The good news is that any existing subscriber – monthly or annual – can lock in the current $300/year price by extending their subscription term for an additional year at any time through the end of March.

I have received some questions about how to switch from a monthly to an annual subscription, so for those who may be interested, the easiest way to convert from a monthly to an annual subscription is to:

1)  Cancel existing monthly subscription by clicking on the “Cancel a Subscription – Unsubscribe” button that is just below the CBOE ad and just above the blog archive section on the right column. (I will manually add whatever time remains on your monthly subscription to your new annual subscription.)

2) Begin a new annual subscription by clicking on the Annual Subscription button on the upper section of the same right column 

For those who have an existing annual subscription and wish to extend their term for another year at the current $300/year rate, just follow the instructions for beginning a new annual subscription above.

If you have a problem with canceling your monthly subscription, just let me know and I will do it for you. PayPal will not allow me to add a new subscription for anyone or modify the terms of an existing subscription agreement.

Last but not least, for those who are not yet subscribers and might be interested in locking in the current rates for a full year, this would be a good time to take advantage of the 14-day free trial (see top of right column) and switch to an annual subscription by the end of the month.

Highlighting Newsletter Content Focus with Content Pyramid

I periodically receive questions about what is included in the subscriber newsletter that is not available on the blog or in EVALS (ETP Volatility Analysis Long/Short, which is essentially a model portfolio.)

In prior posts in this space I have addressed the evolution of the content in the newsletter and described the rationale behind the changes I have made, most of which were prompted by requests from readers. The most recent changes, which I detailed in December in Changes to Newsletter Place More Emphasis on VIX Exchange-Traded Products, involve a shift in emphasis in the direction of the increasingly popular VIX-based exchange-traded products such as VXX, VXZ, XIV, TVIX and the like.

As a visual learner, I have always believed that a picture is worth at least 1000 words, so to help to differentiate between what is in the blog, the newsletter and in EVALS, I have reproduced below the content pyramid that original appeared in Five Years of VIX and More on the main blog.  Note that in addition to VIX and More blog, the newsletter and EVALS, I also publish extended research and analysis pieces at Expiring Monthly:  The Option Traders Journal, the details of which I recently shared in Recent Research Projects and Expiring Monthly.

The good news is that for anyone who is unclear about what is in the newsletter and whether it will be of value to their trading, I offer a 14-day free trial (see top of right column) to the subscriber newsletter for all new subscribers.

Disclosure(s): long XIV; short VXX and TVIX at time of writing

Changes to Newsletter Place More Emphasis on VIX Exchange-Traded Products

Approximately five months ago I conducted a survey of newsletter subscribers and based on that feedback, implemented a number of changes. Specifically, since July I have been placing a much greater emphasis on VIX ETPs and volatility in general in the newsletter. I have also moved the publication date to Wednesdays from Sundays.

To set the context and provide some explanation for those changes, let me offer a brief bit of history.

Background
When I launched the newsletter, in March 2008, it was based on feedback from some readers who were interested in more details about my proprietary research and analysis on volatility and market sentiment. At the same time, another group of readers were more interested in hearing my general market commentary on a regular basis, as well as how I translated my views on the financial markets into specific trading opportunities. Initially I published two newsletters (research and analysis on Wednesdays and general market commentary and specific stock trading ideas on Sunday) and offered both newsletters bundled together as one subscription. While there was a peaceful coexistence of sorts, I felt a little as if I were making gelato on Wednesdays and cannoli on Sundays and while I liked idea of being an ice cream maker and a pastry chef at the same time, things occasionally got a little schizophrenic. As a result, I merged the two newsletters into one newsletter at the end of 2008.

Content Drift Due to New VIX Exchange-Traded Products
With the launch of the first VIX-based exchange-traded products in January 2009, I made a conscious decision to feature the new VIX products prominently. Initially the likes of VXX and VXZ had a mixed reception, but later these found a broad audience and spawned what is now a whole new asset class consisting of 31 volatility ETPs traded in the U.S. As the months have passed and trading volume in the VIX ETPs has risen, the newsletter focus has evolved from approximately 5% of the content related to VIX ETPs to close to 50%.

Reader Survey Results
A large part of the reason for an increased emphasis on VIX ETPs is due to reader feedback. At the beginning of the summer, I elected to survey subscribers to determine what their primary reasons were for subscribing to the newsletter, what content they enjoyed most and what changes they would like to see. The responses clustered around three main points. First and foremost, readers wanted more analysis of VIX ETPs, including trading ideas. Second, readers were interested in my analysis of volatility and more broadly in how that translated into trading opportunities. Third, quite a few readers expressed a desire to return to the Wednesday or “mid-week” publication schedule.

Changes to the Newsletter Implemented in July
As a result of the reader feedback, I made a number of changes in July. First, I changed the publication from Sundays to Wednesdays. Second, I added two new sections to the newsletter:

1) VIX Futures Term Structure – Includes a term structure graph for the current week and previous week, as well as some commentary about any unusual aspects of the term structure or recent changes in the term structure.

2) Trading Volatility – In this section I translate the VIX futures term structure into the relative attractiveness of various positions due to roll yield and the overall shape of the term structure. I also incorporate some analysis of VIX mean reversion and ultimate single out which VIX ETPs I believe are attractive longs and shorts in the current market environment, often incorporating ideas on how these might be traded with options and futures.

I also enhanced third volatility section, formerly known as Volatility Corner and now known as Volatility Overview. This section includes a table of 17 different volatility measures; my discussion and analysis of these volatility measures provides a lead in to the discussion of the VIX futures term structure and various VIX trading opportunities.

As the table below shows, the only section I dropped from the newsletter was the VIX and More Focus Model Portfolios. I also used this opportunity to fold The Week in Review and The Week Ahead into one larger Market Commentary section.

Old VIX and More Newsletter	VIX and More Newsletter Since July
The Week in Review:  What Moved the Markets	Market Commentary (includes a look back and a look ahead)
Market Commentary
The Week Ahead:  What to Look For
Aggregate Market Sentiment Indicator (AMSI)	Aggregate Market Sentiment Indicator (AMSI)
Volatility Corner	Volatility Overview
	VIX Futures Term Structure
	Trading Volatility
Asset Class Outlook	Asset Class Outlook
Current Investment Thesis	Current Investment Thesis
VIX and More Focus Model Portfolios
The Stock of the Week	The Stock of the Week

EVALS Relaunched, Now Focusing on VIX ETPs
The final change that came from the reader survey was a relaunch of EVALS (ETP Volatility Analysis Long/Short) two weeks ago. Whereas the prior incarnations of the newsletter and EVALS were completely independent of each other, now EVALS, which is a model portfolio consisting almost entirely of VIX ETPs, is a tightly linked complement to the newsletter and specifically extends the analysis of Volatility Overview, VIX Futures Term Structure and Trading Volatility to an actively-traded model portfolio.

Conclusion
For those who find my summary of the changes less than crystal clear, the good news is that I continue to offer a 14-day free trial (see top of right column) to the subscriber newsletter for all new subscribers.

Disclosure(s): long XIV and short VXX at time of writing

Newsletter and Portfolio Performance Update Through 12/31/10

Today marks the third anniversary of the VIX and More Newsletter. To be honest, I had no idea what I would be getting in to when I started this venture. The primary impetus for the newsletter came from blog reader who were interested in my thoughts on a broad range of subjects, from the various geopolitical and macroeconomic influences on volatility to a more comprehensive look at market sentiment, to my assessment of some asset classes that I rarely mentioned on the blog, such as commodities (now more prominently featured), bonds and currencies.

Each Sunday I sit down to reflect on the events of the past week and plan out my trading for the coming week. I write the newsletter partly for myself, in order to organize my thinking, and partly for the benefit of readers whose questions and comments have given me a sense of which areas I should emphasize and drill down on.

From the outset I have considered the core of the newsletter to be a discussion of the main influences on the market during the past week, an evaluation of the most important economic data and earnings report scheduled for the coming week and a discussion of my current investment thesis and trading ideas across a broad range of asset classes, sectors, geographies, etc.

As time went on, reader feedback has caused me to place increased emphasis on volatility, including the VIX, various other volatility indices, VIX futures, VIX options and the growing number of VIX ETFs and VIX ETNs. As a result of this feedback, it has been the Volatility Corner section of the newsletter that has seen the most growth in terms of dedicated space and analysis. This trend continued during the fourth quarter, when as a result of the proliferation of volatility-based ETNs and ETFs I expanded the Volatility Update table to include data and analysis of three new VIX ETNs:

• TVIX -- VelocityShares Daily 2X VIX Short-Term ETN
• XIV -- VelocityShares Daily Inverse VIX Short-Term ETN
• XVIX -- UBS E-TRACS Daily Long-Short VIX ETN

I am proud of all the positive feedback I have received along the way and consider the unusually high renewal rate to be a sign that readers are getting a good deal of value out of what I write.  Thanks to those who have been subscribers from the very beginning and those who have offered their support and encouragement along the way.

Of course, each quarter I publish performance data for three model portfolios and a Stock of the Week ‘Sequential Portfolio’ (SOTW). During the fourth quarter the model portfolios performed extremely well, racking up substantial gains. Three of the four portfolios topped their benchmarks during the quarter, some of them by huge margins. The sole exception was Focus Foreign Growth, which still managed to top its benchmark (the EAFE index ETF, EFA) by more than 16% for the year.
The one disappointment for 2010 was the Focus Growth 2. As detailed in the post below, I decided to revamp both the stock selection rules as well as the position management algorithms for Growth 2 and implemented those changes on August 30. Since that change, Growth 2 is up 30.8% and is making up ground on the benchmark S&P 500 index.

This brings me to the Stock of the Week ‘Sequential Portfolio’ (SOTW), which has become a rock star of sorts. After returning 97% in 2008 (from the March 30^th launch until the end of the year, the SOTW gained 265% in 2009 and followed that up with a gain of 179% in 2010. As I am sure the publication of the numbers for the full year will once again bring in a rash of emails, let me offer up some pre-emptive commentary.

First, I recommend that anyone who is interested in exploring the SOTW in some detail examine the work of Michael Stokes of MarketSci, who had a three-part series in April 2010 in which he reviewed the SOTW, first as a single stock portfolio, then using a short SPY position to hedge market risk and finally examining a theoretical 10-week holding period. The quick summary of MarketSci’s findings is that the performance of the SOTW was very strong both unhedged and hedged, but there is not convincing evidence of persistent outperformance past the initial post-selection week.

The full set of MarketSci reviews can be found at:

• Review of the VIX & More Stock of the Week
• Hedging the VIX & More Stock of the Week – uses a short SPY position to hedge market risk, with impressive results
• Holding V&M’s Stock of the Week for Longer than a Week – looks at a 10-week holding period and does not find persistent outperformance past the initial post-selection week

For the record, MarketSci’s analysis assumes that an investor would buy the SOTW at beginning of the first session of the following week and close out the position at the end of the final trading day of that week. As I stated in a VIX and More post MarketSci on the Stock of the Week ‘Sequential Portfolio’:

“This is different from the Friday close to Friday close data I have always reported in my subscriber newsletter, because I always wanted to report a cost basis in the newsletter on Sunday and assumed that if I avoided stocks which had news over the weekend, the difference between using a Friday close vs. a Monday open as a cost basis would not be meaningful in the long run.”

Many readers have asked me to provide an analysis of how the SOTW would have performed in 2010 had someone used the SOTW selections to purchase the SOTW at its opening price on the following Monday and sell it at its closing price at the end of the week. I hope to have this information and some additional related analysis published in short order.

For those seeking additional information, I am offering a 14-day free trial (see top of right column) to the subscriber newsletter for all new subscribers.

Disclosure(s): long XIV and short VXX at time of writing

Newsletter and Portfolio Performance Update Through 9/30/10

During the third quarter of 2010 I made two important changes to the subscriber newsletter.

The first change is relatively straightforward. Acting on quite a few requests for more analysis VXX, I added my proprietary VIX Futures Contango Index to the Volatility Update table I publish each week in the recurring Volatility Corner section of the newsletter. Each week I now review the VIX futures, the VIX Futures Contango index and the VXX roll yield in the context of their impact on VXX and other volatility products.

The more substantial change involves changes to the Focus Growth 2 model portfolio. After two years of disappointing performance, I decided to revamp both the stock selection rules as well as the position management algorithms. The changes result in a model portfolio that places increased emphasis on greater long-term growth potential and recent earnings growth, as well as an attractive valuation and volatility profile. The net result is a model portfolio that more closely resembles another portfolio I have been managing in real time for five years that has an average annual return of 39%. It is my intent not to jettison this underperforming model portfolio, but rather to accept the challenge to work to make it a benchmark-beating performer, just as the other two model portfolios have been.

This brings me to the performance data below. All three of the model portfolios topped their benchmarks during the quarter, with the changes to Growth 2 responsible for about a 3% advantage over the benchmark S&P 500 index during the last month of the quarter.

Every time I post this data, invariably the big story becomes the Stock of the Week ‘Sequential Portfolio’ (SOTW) and its 91% gain for the first three quarters of 2010 and 1281% gain since its March 30, 2008 inception. I should probably reiterate what I said last quarter, notably that Michael Stokes of MarketSci had a three-part series in which he reviewed the SOTW, first as a single stock portfolio, then using a short SPY position to hedge market risk and finally examining a theoretical 10-week holding period. The quick summary of MarketSci’s findings is that the performance of the SOTW is very strong both unhedged and hedged, but there is not convincing evidence of persistent outperformance past the initial post-selection week.

The full set of MarketSci reviews can be found at:

• Review of the VIX & More Stock of the Week
• Hedging the VIX & More Stock of the Week – uses a short SPY position to hedge market risk, with impressive results
• Holding V&M’s Stock of the Week for Longer than a Week – looks at a 10-week holding period and does not find persistent outperformance past the initial post-selection week

For the record, MarketSci’s analysis assumes that an investor would buy the SOTW at beginning of the first session of the following week and close out the position at the end of the final trading day of that week. As I stated in MarketSci on the Stock of the Week ‘Sequential Portfolio’:

“This is different from the Friday close to Friday close data I have always reported in my subscriber newsletter, because I always wanted to report a cost basis in the newsletter on Sunday and assumed that if I avoided stocks which had news over the weekend, the difference between using a Friday close vs. a Monday open as a cost basis would not be meaningful in the long run.”

For those seeking additional information, I am offering a 14-day free trial (see top of right column) to the subscriber newsletter for all new subscribers.

Disclosure(s): short VXX at time of writing

Newsletter and Portfolio Performance Update Through 6/30/10

Largely as a result of overwhelmingly positive feedback, I made no significant changes to the subscriber newsletter during the second quarter of 2010. After two years of tinkering and considerable reader input, the sections, graphics and commentary seem to have found a flow and style that I enjoy and readers appear to be getting a great deal of value from the current structure and format as well.

One interesting development that occurred during the quarter was a review of the Stock of the Week ‘Sequential Portfolio’ (SOTW) by Michael Stokes of MarketSci. In a three-part series, MarketSci has a very positive review of the SOTW, first as a single stock portfolio, then using a short SPY position to hedge market risk and finally examining a theoretical 10-week holding period. The quick summary of MarketSci’s findings is that the performance of the SOTW is very strong both unhedged and hedged, but there is not convincing evidence of persistent outperformance past the initial post-selection week.

The full set of MarketSci reviews can be found at:

• Review of the VIX & More Stock of the Week
• Hedging the VIX & More Stock of the Week – uses a short SPY position to hedge market risk, with impressive results
• Holding V&M’s Stock of the Week for Longer than a Week – looks at a 10-week holding period and does not find persistent outperformance past the initial post-selection week

For the record, MarketSci’s analysis assumes that an investor would buy the SOTW at beginning of the first session of the following week and close out the position at the end of the final trading day of that week. As I stated in MarketSci on the Stock of the Week ‘Sequential Portfolio’:

“This is different from the Friday close to Friday close data I have always reported in my subscriber newsletter, because I always wanted to report a cost basis in the newsletter on Sunday and assumed that if I avoided stocks which had news over the weekend, the difference between using a Friday close vs. a Monday open as a cost basis would not be meaningful in the long run.”

Regarding the performance of the SOTW and the model portfolios during the second quarter, it was a mixed bag. The S&P 500 index fell 11.9% from 1169 to 1030 during the quarter, with both the Aggressive Trader Model Portfolio and Growth 2 Model Portfolio underperforming the benchmark, while the Foreign Growth Model Portfolio and the Stock of the Week both outperformed the benchmarks. In fact the SOTW increased its margin on the S&P 500 index from 40% to 69% during the period, riding weekly gains of more than 10% from XRTX, VPHM and PQ.

Last but not least, my apologies for the delay in getting this update posted in a timely basis. Not that much changed in the newsletter during the second quarter, but as there have been a number of important changes in the third quarter, I will do my best to provide another update discussing those changes in two weeks or so.

For those seeking additional information, I am offering a 14-day free trial (see top of right column) to the subscriber newsletter for all new subscribers.

Disclosure(s): long VPHM at time of writing

Newsletter and Portfolio Performance Update for 3/31/10

The newsletter continued to fire on all cylinders for the first quarter of 2010 and it was great to get so much positive feedback.

Most of the recent enhancements were relatively minor. I added a color coded Economic Data Highlights table to summarize the actual and estimated numbers for five different areas of economic activity, as those data points have been critical in painting a picture about the relative health of the economy as of late. I also added entries for the VIX front month and second month futures, as well as the VXX roll yield for the Volatility Update table. Finally, I made some minor enhancements to the proprietary Aggregate Market Sentiment Indicator (AMSI) to better tune some of the bullish and bearish signals to the current signal to noise ratio for volatility, put to call data, market breadth, volume, etc.

The real star of the newsletter continues to be the Stock of the Week ‘Sequential Portfolio,’ which is one (relatively) unknown stock I highlight each week. In terms of performance, the Stock of the Week (SOTW) was a consistent performer in the first quarter, experiencing only three losing weeks and generating a cumulative return of 40.9% for the first quarter. The three biggest gainers were RELL, OFIX and BELM. In fact, BELM was selected one day before the company was bought out for a 29.2% premium over the previous close.

The Aggressive Trader Model Portfolio also had a very strong first quarter. This portfolio, which draws from some of the same approach as is used by the SOTW, managed a 27.8% gain in the first quarter. Also beating its benchmark was the Foreign Growth Model Portfolio, which was up 2.1% during the quarter. The mystery sub-par performance continued for the Growth 2 Model Portfolio, which was down 10.8% in the first quarter and was the only portfolio to underperform its benchmark during during this period.

The graphic below shows the performance of the three model portfolios since inception, with a separate breakout for 2008, 2009 and 2010 (first quarter only) results. Note that the benchmark data are slightly different due to the fact that one of the focus model portfolios (Growth 2) was launched later than the others and another focus model portfolio (Foreign Growth) uses the iShares MSCI EAFE (Europe, Australasia and the Far East) ETF, EFA, for a benchmark instead of the SPX benchmark data used by the other portfolios.

For those who may be interested, I am offering a 14-day free trial (see top of right column) to the subscriber newsletter for all new subscribers.

Disclosure(s): none

Newsletter and Portfolio Performance Update for 12/31/09

In 2009, I continued to tweak and enhance the subscriber newsletter, but during the last quarter of the year there were no changes to the regular sections of the newsletter, as reader feedback persuaded me that a year of adding new features and graphics had finally resulted in a newsletter that was best left in its current incarnation.

One of the unquestionable success stories of the newsletter has been the excellent performance of the three focus model portfolios and the Stock of the Week ‘Sequential Portfolio’ that consists of one relatively unknown stock which I highlight each week. In terms of performance, two of the three model portfolios (Aggressive Trader and Focus Foreign Growth) ended up with returns of more than 100% for the year. The Stock of the Week was the real star performer, however, racking up gains of 265% for the year, with 10 of the 52 weekly picks logging gains of at least 10% during their week in the sun. The top three weekly gainers were Kirkland’s (KIRK), RINO International (RINO) and last week’s selection, Great Plains Renewable Energy (GPRE).

The graphic below shows the performance of the three model portfolios since inception, with a separate breakout for 2008 and 2009 results. Note that the benchmark data are slightly different due to the fact that one of the focus model portfolios (Growth 2) was launched later than the others and another focus model portfolio (Foreign Growth) uses the iShares MSCI EAFE (Europe, Australasia and the Far East) ETF, EFA, for a benchmark instead of the SPX benchmark data used by the other portfolios.

For those who are interested, I am currently offering a 14-day free trial (see top of right column) to the subscriber newsletter for new subscribers.

Disclosure: none

Newsletter and Portfolio Performance Update for 9/30/09

The last few months have seen a surge of interest in the Stock of the Week (SOTW) selection and has led to several posts on the subject, including a detailed September 7^th piece with the title, Stock of the Week ‘Sequential Portfolio’ Up 466% Since 3/30/08 Launch.

With the increased interest in the SOTW has come increased interest in the VIX and More portfolios in general and has led to my resuming coverage of the Aggressive Trader Portfolio in the newsletter. The Aggressive Trader was one of the original features of the newsletter, but in the early months I became concerned that the newsletter was tilting too much in the direction of model portfolios and stock selection, at the expense of original research on volatility, market sentiment and related subjects. Based on reader feedback over the past few months, I have made some refinements and now believe the newsletter strikes an appropriate balance between commentary, analysis and trading ideas. A large part of the reason that I added the Aggressive Trader back to the fold is that the portfolio has a great deal in common with the SOTW. As recently as two weeks ago, for instance, 79% of the Aggressive Trader holdings were represented by former SOTW selections.

The graphic below shows the updated performance data for the VIX and More portfolios for 2008, 2009 and since inception, both in absolute terms and relative to their respective benchmarks. As noted previously, these are long-only portfolios of individual stocks that do not invest in ETFs or options and are rebalanced only on weekends. The Focus portfolios derive their name from the fact that each portfolio is limited to only five stocks. Both the Aggressive Trader and Stock of the Week portfolios were launched on March 30, 2008 and use the S&P 500 index as a benchmark. The Focus Growth 2 Model Portfolio was launched on August 31, 2008 and utilizes the S&P 500 index as a benchmark; the Focus Foreign Growth, was launched on March 30, 2008 and uses as a benchmark the EAFE (Europe, Australasia and the Far East) Index ETF (EFA).

The unquestioned star performer has been the Stock of the Week ‘Sequential Portfolio,’ which racked up a 97.7% gain during the turbulent 2008 markets and has easily surpassed that mark with a 218.2% gain for the first nine months of 2009. Two other portfolios have had stellar years so far: the Focus Foreign Growth portfolio is up 103.2% year-to-date; and the Aggressive Trader portfolio is up 75.5% during the same period. The laggard among the group has been the Focus Growth 2 portfolio, which is the only portfolio not to have a cumulative gain since inception. Somewhat ironically and to my slight consternation, two sister portfolio to Focus Growth 2 have been up and running for about five years and sport cumulative returns of about 350% during this time.

In terms of content, the newsletter has been relatively stable during the last three months, with no significant changes in terms of the standard sections. For more information on the standard sections and content, readers are advised to investigate:

• Content Changes and Portfolio Performance Update for 6/30/09
• Subscriber Newsletter and Portfolio Performance Through December 2008
• Stock of the Week ‘Sequential Portfolio’ Up 466% Since 3/30/08 Launch

As a reminder, I am currently offering a 14-day free trial to the subscriber newsletter for new subscribers.

Stock of the Week ‘Sequential Portfolio’ Up 466% Since 3/30/08 Launch

By far the subject which seems to generate the most emails is what I call the Stock of the Week ‘Sequential Portfolio,’ often known simply as the SOTW.

I launched this feature on 3/30/08 with the first issue of the newsletter. My intent was to highlight one relatively unknown stock each week, which I believe is worth owning for both fundamental and technical reasons. While all positions are long-only and are limited to one week, the purpose of the SOTW is not to encourage readers to hop on a single stock and ride it for a week, but rather to generate a new idea each week that might be a candidate for further investigation and perhaps an extended holding period.

Each week I combine my broad market outlook, sector analysis and favored stock selection criteria (sometimes overweighting technical factors and other times favoring fundamentals) to arrive at a handful of finalists for the SOTW. More often than not, the selection of the SOTW for a particular week is the result of analysis of the charts, recent news flow for the stock, and sometimes my perception of how likely I think a particular stock is to become a story stock.

The self-imposed rules of the SOTW state that each week the entire portfolio is invested in a single stock that is purchased at the beginning of the week and sold at the end of the week, regardless of performance. To make for easier accounting, I elected to use Friday's closing price as the official cost basis in the newsletter and do not subsequently adjust that priced based on Monday's open or any other data. At one point I toyed with the idea of editing the data the following week so as to use Monday's open as the official cost basis for record-keeping terms, but over the long run, the difference between Friday's close and Monday's open should be negligible. Also, to my knowledge, I have never there have not been any SOTW selections that have had significant news over the weekend.

The results of the SOTW selection are below and include the date of the newsletter in which the SOTW selection was published, the ticker and the price change from Friday to Friday. For 2008, the SOTW was up 97.7%. For the first eight months of 2009, the SOTW is up 186.5%. Over the full 17 months since the SOTW was launched, the cumulative gains to date are 466.5%. For the record, during this same 17 month period, the S&P 500 index is down 22.7%.

For more information, try:

• Stock of the Week ‘Sequential Portfolio’ Up 343% in 14 Months (VIX and More)

Content Changes and Portfolio Performance Update for 6/30/09

Thanks to those who reminded me to update what has happened to the subscriber newsletter and specifically the three VIX and More portfolios over the course of the last quarter.

Starting with the newsletter content, I see at least four areas in particular in which I have expanded and enhanced the information and analysis. These include:

• more earnings data and a new earnings surprise graphic
• increased focus on key economic reports, with an emphasis on looking under the hood at the full set of numbers to get at the nuances the major media headlines missed or glossed over
• a broader scope of analysis for the Volatility Corner feature and an expansion of the accompanying Volatility Update graphic
• a more detailed discussion of the Stock of the Week selection

With these changes, I have heard from some subscribers about the dangers of page creep. For now I am capping the weekly newsletter at 10 single-spaced pages and am targeting 8-10 pages for each issue.

The graphic below shows the updated performance data for the VIX and More portfolios since inception. To reiterate, these are long-only portfolios of individual stocks that do not invest in ETFs or options and are rebalanced only on weekends. The Focus portfolios derive their name from the fact that each portfolio is limited to only five stocks. The Focus Growth 2 Model Portfolio was launched on August 31, 2008 and utilizes the S&P 500 index as a benchmark; the Focus Foreign Growth, was launched on March 30, 2008 and uses as a benchmark the EAFE (Europe, Australasia and the Far East) Index ETF (EFA).

Focus Growth 2 was up 5.6% for the first half of the year, nearly doubling the performance of the benchmark SPX. The three stocks that were the strongest performers were FRPT, HRBN and HOGS. Even more impressive were the results turned in by the Focus Foreign Growth portfolio, which gained 56.1% for the six months ended 6/30/09, 52.4% better than the benchmark. The biggest winner was TSL, which gained 242% since being purchased in late February. The portfolio, which was heavily weighted in Chinese stocks during the second quarter, also benefited from a 124% gain in SNDA.

As impressive as the Foreign Growth returns were, the star attraction has clearly been the Stock of the Week ‘Sequential Portfolio,’ which ended June up 101% for the first six months of 2009. During the second quarter, the SOTW saw a streak of 13 consecutive gains come to an end. The biggest winner was Kirkland’s (KIRK), which gained 29.9% one week in the middle of May. For more details on specific picks, check out VIX and More Stock of the Week Selection Up 343% in 14 Months.

Starting next quarter, when I provide an update through September 30^th, I will provide some more detailed portfolio performance data in this space.

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Finally, for those who may be interested, I updated the second quarter performance for EVALS earlier in the month in EVALS Q2 2009 Update: +18.47%.