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Updated November 13, 2009
Please read this page carefully. It is important to understanding our system and making profits.
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How the System Works
Portfolio Tracking: Accuracy and Integrity
Portfolio Calculator
Entry Strategy: Buying Your Positions
Exit Strategy: Taking Profits and Preventing Losses
Stop Price Color Codes
Diversification
Price Adjustments for Accuracy
Why We Don't Include Commissions
Stick With It
Don't Let Emotions Rule Your Investing
Trial Subscriptions
Cancellations
Contact Us
WELCOME
Welcome to IntelligentValue.com! We are pleased that you have chosen us to be a part of your investment information arsenal, and we'll do everything possible to uphold our obligations. We hope the time you spend with IntelligentValue will be both financially and educationally rewarding for you. We welcome your input, suggestions, compliments or criticisms. Please contact us if you have any feedback.
WEB ADDRESS SHORT-CUT
The first thing you should do is bookmark the IntelligentValue log-in page (http://www.intelligentvalue.com/login.htm) so you can easily access the site. You can also enter the site from a shorter web address; "intvalue.com." Use whichever address you remember and prefer.
One of the most important things you need to do right NOW is to make sure we have the proper information so we can contact you with newsletter alerts. Before you go any further, make sure your information is correct. Go to the Member's Home page and click the link in the top, right-side menu box ('Site Tools') that says 'UPDATE MY INFO.' Please make sure your e-mail address is correct or we cannot send you our notices. If you are not getting our notices, please contact us.
IMPORTANT: If you should receive a new credit card or a new expiration date, go to the Member's Main Page and click the button in the top menu box (under "Site Tools") that says, "UPDATE YOUR INFO." Please update with the new information or your subscription could be suspended.
In order to receive our e-mail notices, please add or "whitelist" our e-mail address in your spam-detection software. This includes the newer versions of Outlook as well as Norton, McAfee, Choicemail and any other spam protection that you may use. One of the best ways to insure you will receive our mail is to whitelist *@intelligentvalue.com so that anything we send to you from our site will get through to you (the asterisk is a 'wildcard' so that any e-mail sent from our domain will work). To contact us, go to our CONTACT US page to complete and send the form.
OUTLOOK: To "Whitelist" our address in Microsoft Outlook, go to "Actions," then "Junk E-Mail," then "Junk E-Mail Options," and select "Safe Senders." Add wm@intelligentvalue.com and *@intelligentvalue.com to the list of safe senders to make sure you get our notices and mid-week "Buy/Sell Alerts."
GMAIL: To whitelist our address with Google's GMail, use the instructions on this page.
YAHOO, HOTMAIL, ETC: All online e-mail services have similar instructions on how to 'whitelist' mail from a specific domain. It's possible that we will change the first part of our mailing address from "wm" (short for webmaster) at some point in the future, so it's best to whitelist all mail from our domain, such as anything from intelligentvalue.com or the wildcard of all e-mail from our domain, *@intelligentvalue.com.
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Remember that our portfolios are examples to demonstrate our 'Dynamic Value' approach to investing. They are both speculative. IntelligentValue has no knowledge of your personal financial circumstance and does not recommend any particular stocks. You should do your own analysis and homework to determine if our examples are appropriate for you, or use them to give you ideas for other investments which fit your needs.
In accordance with our Dynamic Value Investing approach, we modify our value-based stock-picking criteria to use the factors that are currently working, rather than hoping the market will come around to our way of thinking. In contrast to other value-oriented advisors, we combine valuemetric criteria with high-probability trading strategies to produce exceptional returns. During periods when the broad market is rising, we purchase stocks which are also rising in price in addition to meeting our value criteria.
AGGRESSIVE PORTFOLIO:
The AGGRESSIVE PORTFOLIO is for more speculative investors that wish to be more active in their investing. This portfolio does not do day trading, but sometimes we may only hold positions for a few days in this portfolio if it is a profitable strategy. This portfolio uses our Active Value Investing approach, but it utilizes shorter-term triggers to to tell us when to buy from short-term oversold levels or sell and move towards cash (or inverse ETFs) as the market becomes overbought.
Our Aggressive Portfolio chooses 5-10 example stocks that are undervalued based on our valuemetric fundamental analysis. The stocks in this portfolio are small-cap stocks (market cap>$100 M) and are more inclined volatile when compared to the large-cap stocks in our Model Portfolio. This portfolio uses shorter-term trends that generally last 1 week to 1 month.
You can access our Aggressive Portfolio by clicking its link on the right side menu of the Member's HOME page under "PORTFOLIOS," or you can click this link: AGGRESSIVE PORTFOLIO.
MARKET TRENDS PORTFOLIO:
The goal of the MARKET TRENDS PORTFOLIO is to provide steady gains each month based on our analysis of price trends of the Standard and Poors 500 stock index. We use the 2X leveraged ETFs by PROSHARES (SSO and SDS) as the vehicles for our trades.
The Market Trends portfolio is easy to understand and execute with only two potential stocks to choose from, no company-oriented surprises such as an accounting scandal that can dramatically affect stock prices, vast liquidity (as much as 40 million shares traded daily), minimal volatility, and easy, instantaneous entry and exit of the positions.
To read more about the details of this portfolio, click this link: MARKET TRENDS PORTFOLIO DESCRIPTION
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ACTION ALERTS
Although we try to make portfolio changes in the weekend WEEKLY ANALYSIS, we will send an e-mail BUY ALERT, SELL ALERT, or STOP ADJUSTMENT during the week before the market open in the morning (around 8AM EST) when changes in the market or our portfolio necessitate it. These Action Alerts are published online with a link on the right side of the Member's Main Page. Should an alert be posted to the site, an e-mail will be sent to notify you.
Most notices will be issued before the market open in the morning (around 8AM EST), and if you are following our portfolios, you should place an electronic order for the recommended trade with your online broker. During the day (after a trade at the market open), we will create a 'Portfolio Adjustment' page that shows the updates to prices in the portfolio as well as the cash amount. In this way, you are guaranteed to get exactly the same results we get.
Occasionally, we will issue an intraday Alert for buys/sells in our Aggressive Portfolio, but we attempt to keep these to a minimum.
If you are traveling without a laptop or having trouble receiving e-mails, you may wish to check the Member's Main Page of the site each morning around 8AM Eastern time to see if any new Alerts have been posted.
DO YOUR OWN HOMEWORK
Remember that our example portfolios and investment suggestions are just a starting point for your own analysis. By law, we cannot provide personal investment information. Although we consider our approach to be logical and prudent, it may not be appropriate for you. One man's 'prudent' may be another man's 'aggressive.' However, we can say with confidence that you definitely should not have all of your eggs in the IntelligentValue basket. A diversified portfolio which consists of both conservative and aggressive stocks, bonds, treasuries, real estate and other alternatives is prudent for any investor. If you are not able to self-assess the investments which are appropriate for you, please consult a Certified Financial Advisor (CFA).
FinancialContent.com is a data provider for stocks details, news, charts and other services for many major publishing companies (such as CBS News, CNET, Denver Post, San Francisco Chronicle, CBS Radio, San Diego Union Tribune, ABC TV-KGO, Street IQ and many more). The data tracking that FinancialContent.com provides to IntelligentValue.com includes the Portfolio Table (member's only) for each of our portfolios, with the prices and profit/loss for each stock in each portfolio updated every five minutes during the trading day.
As our portfolio stock prices are updated throughout the day, the profit amount and profit percentages of each of the stocks in our portfolio is continuously updated. Detailed individual stock information (example) for our holdings is also provided. News on each stock as well as its particulars including market cap, volume, returns over different periods, etc., are provided by clicking a ticker symbol of any of the stocks in our portfolios.
FinancialContent.com also maintains the Daily Profit/Loss tracking and the ongoing accumulation of profits in our individual portfolios (example). The returns are also visually displayed on each portfolio's Graph Page, which is updated daily.
According to Wing Yu, CEO of FinancialContent.com, "The investment performance of the IntelligentValue portfolios has been incredible. Yet, Chris Michaels is all about credibility. He has created an index based on his very successful investment strategies which lets his subscribers monitor every position that he takes.
The IntelligentValue Newsletter relies on its community of subscribers to vet the daily reporting; subscribers would complain if they don't get buy or sell recommendations by email and the recommendations later get recorded in the portfolios.
IntelligentValue also turns to FinancialContent to track the portfolio values as they change throughout the trading day and to record the end of day values for historical purposes. The combined "notarization" by the community and FinancialContent certainly won't be as accurate as an actual audit, but an even more powerful factor compels the editors of the IntelligentValue newsletter to maintain their integrity: subscriber retention."
FinancialContent.com has tracked the performance of the IntelligentValue portfolios every day since our site was launched on September 6, 2004.
FinancialContent.com provides our Portfolio Calculator feature that allows you to easily see how many shares of each stock you should buy if you are following our example portfolios.
Below the portfolio table on each portfolio page (see the Model Portfolio or the Aggressive Portfolio pages), there is a heading called "Portfolio Documentation." The link to the Portfolio Calculator is on the far right of the list of links.
To use the calculator, first decide how much money you are allocating to the IntelligentValue portfolio of your choice, then enter that amount in the box on the bottom right ("Total Invested"). All dollar amounts and number of shares for each individual stock will automatically fill in to match your investment funds to our allocation for each stock. This eliminates the need for you to pull out your calculator and try to match our portfolio. All the work is done for you instantaneously.
ENTRY STRATEGY
Our stock suggestions are provided in the before the market open in the morning (around 8AM EST). To follow our portfolio, place in an electronic order to buy the stock when the market opens and forget about it until you get another notice to sell it. The prices in our example portfolio are always adjusted to the day's opening price - the same price you get.
Once you receive a Buy/Sell Alert before the market open in the morning (around 8AM EST), log onto your online brokerage account and buy or sell the stocks with execution scheduled for the market open. It is as simple as that.
We always update our purchase or sale prices from the closing price on the day of the Alert issuance to the opening price on the day of purchase or sale. The changes are documented in the PRICE ADJUSTMENTS section.
BUY-STOP-LIMIT ORDERS
We have found in backtesting that the results of a portfolio's performance is dramatically improved if we only make a purchase if the stock has moved higher at the open. Returns can be as much as 30%-80% higher annually.
Therefore, all purchases are contingent on each stock moving higher than yesterday's close at the market open! Use a Buy-Stop-Limit order at your broker's site if you can't be at a computer in the morning.
"I'M A NEW SUBSCRIBER, SHOULD I BUY THE PORTFOLIO STOCKS NOW?"
This is probably the #1 question asked by new subscribers. It's a logical question. If you just joined the site and want to get in on our winning methodology, do you buy a stock that's already in the portfolio and has gains?
Unfortunately, we are prohibited by SEC regulations from answering this question for individual subscribers. We are only allowed to publish our stock suggestions broadly. So here's our broadly published suggestion:
The answer to the question isn't as easy as "yes" or "no." The logical answer would be to only buy stocks when a new purchase is announced. But sometimes a stock we have purchased may have been held a for a while, already made sizable gains, but has more room to run.
The bottom line is that we can't give you personal feedback on this question. You'll need to look at how long we've held a stock, how much it's already gained, what the stock's chart looks like, and what your risk tolerance is. If you're not sure whether a stock is likely to go higher after it has matured in our example portfolio, the safest bet is to wait until a new purchase is announced.
EXIT STRATEGY
Although we try to identify long-term business cycles (for the Model Portfolio) and intermediate-term trends within a cycle (for the Aggressive Portfolio), there are always unknowns that can occur in business, such as a surprise product-liability lawsuit, a CEO scandal, or a change in government policy that will affect a particular business or product line. Any of these things can cause the price of an equity to drop abruptly.
This risk of an unforeseen loss of capital is what keeps many conservative investors out of the stock market. They would rather have the assurance that they won't lose their original principle that comes with fixed, risk-free equities such as U.S. Treasury Bonds or a CD. Beyond problems with individual companies, there are also macro events, both social and economic, that can cause rapid investor knee-jerk fear reactions which result in overall stock prices plummeting dramatically.
Wars, presidential assassinations, foreign economic meltdowns can also cause US markets to crash, at least temporarily. As examples, consider the shocking religious-based ideological crimes committed on 9-11-2001 or the government-allowed bankruptcy of Lehman Brothers in September 2008 that caused emotional shock waves resulting in major selloff of stocks across the board. Part of the extra return that stocks have historically produced is a result of investors acceptance of these risks which can cause the loss of a stock buyers original investment.
Therefore, when we buy a stock, we also provide an End-of-Day (EOD) Sell Stop price for each position. Usually, this stop price will be at a prior technical support level. If a technical support level can't be identified, the stop price is set at a fixed percentage, such as 15% below the purchase price.
Then, as a stock rises in value, we will update the stop price if a new technical price support level has been established. These changes to the stop price will be announced in the weekend Weekly Analysis or in a mid-week (morning) Action Alert. In all cases, stocks purchased or sold as well as Stop Price changes are announced before the market open in the morning (around 8AM EST).
We issue a Price Adjustment the following day to set the actual opening price of the stock as well as adjust the cash in the portfolio to insure that our results are EXACTLY the same as the results that you receive. It is impossible to get a discrepancy between our published results and the results you get. IntelligentValue is the only investment newsletter publisher that we know of who provides this unprecedented level of price documentation and integrity of performance.
STOP PRICE COLOR CODES
The Aggressive Portfolio may use two different types of stop prices. The stop prices listed in the third column from the left in the portfolio tables have a background color that indicates whether the stop is an Intraday (ITD) Stop or an End-of-Day (EOD) Stop.
INTRADAY (ITD) STOPS
Intraday stops are fixed amount stop sell prices that can be set with your broker. We set our stops based on technical analysis of support and resistance levels. We do not use percentage (%) stops simply because they are arbitrary. If a stock touches the published stop price in our portfolio table, the stock is automatically sold and the stock is moved into the Closed Positions section. The stock may not immediately be removed from the portfolio, but it will be removed before the market open the next day.
End-of-Day (EOD) Stops
With End-of-Day (EOD) stops, if a stock closes below the listed stop price, we will send out an Action Alert before the market open in the morning (around 8AM EST) and the stock will be sold at the market open. Therefore, you should NOT enter the listed stop price with your broker. The reason we might use an EOD stop is that some low volume stocks can have volatility that could cause the stock to be sold in a single, two-party trade. The EOD stop helps prevent these sales when we don't intend for the sale of a position to be triggered by a single transaction. EOD stops are not available with your broker. If a stock hits an EOD stop, we'll send and e-mail and sell the stock at the market open the next day. The legend for the ITD and EOD Stops are as follows:
Intraday (ITD) Stops:  |
End-of-Day (EOD) Stops:  |
The Market Trends portfolio will always use Intraday Stops (which you can place with your broker) because the two ETFs that are used in the portfolio (SSO or SDS) have very high volume (16M-25M shares traded daily) and liquidity. They are not subject to the intraday, two-party trades far from the normal price which can will trigger a sale when not intended.
DIVERSIFICATION
IntelligentValue uses a minimum number of example equity positions to accommodate ease of use. We only provide 5-10 example picks, so the portfolios DO NOT accomplish proper portfolio diversification. The IntelligentValue portfolio should NOT be used as the sole basis of your equity investments. It should only be used as a small part and/or the speculative portion of your portfolio equities, in addition to bonds, treasuries, real estate, etc. To achieve your financial goals, please self-assess or consult with a Certified Financial Advisor (CFA) for the proper mix that the IntelligentValue speculative portfolios should constitute of your total investment and retirement plan.
In order to make our portfolio performance EXACTLY the same as your portfolio, we adjust our prices to the Opening Price of the stock on the day after we send a buy or sell alert. We know of no other investment newsletter that provides pricing as accurately as IntelligentValue.com. And, as mentioned previously, our portfolio tracking is not provided by us. It is provided by FinancialContent.com, an independent, publicly traded third party that provides data for many well-known companies such as CBS, Denver Post, Kiplinger, San Francisco Chronicle, etc. To many subscribers, this credibility is an important feature of our site.
When we have a change to the portfolios, an Action Alert will be issued before the market open in the morning (around 8AM EST), we discuss stocks to be bought or sold using the latest closing prices. That's because that is the only price we have to work with. However, after picking stocks before the open, we will adjust the prices to the Opening Price in our online Portfolios and issue a "Price Adjustment" update. The price updates are available under Price Adjustments" in the right-hand menu on the Member's page.
This update provides the Opening Price of each new stock and makes appropriate changes to the cash account. These adjustments are intended to provide you with the confidence that we are showing the same results as that which you are getting.
We are sometimes asked why we don't include commissions in our performance calculations. First, we don't include trading costs because it is standard procedure in the newsletter industry to exclude commissions or other trading costs in the calculations. It is also standard procedure to exclude dividends.
The reason that trading costs are not included is that they fluctuate so widely from broker to broker that it would be impossible to provide an accurate representation of what those trading costs would be. One subscriber may have a large account and may pay pennies per trade. Another subscriber may be a beginner with a starter account that costs $19.95 a trade at Ameritrade or E-Trade. Yet another subscriber wants a full-service broker he can talk to and he pays $75-$175 per trade at Merrill Lynch or Morgan Stanley. Therefore, we leave commissions out.
We hope you will remain a subscriber with IntelligentValue and our business relationship will last for years. But many subscribers give up within the first month or even within a few days of subscribing. The stock market is not an instant gratification machine. There is no doubt that you will have days of fulfillment when one of our recommended stocks - or the entire portfolio - grows in value rapidly.
But it is a bad decision to bail out because you've recently joined and lost some money on paper. Fortunately, we have very few declining periods that last very long. But to give up the chance to reap the investment returns you can hope to achieve over many years just because you've lost money over a couple of months (or worse, days) is very illogical If you have that type of an "instant-gratification" outlook on investing, then you probably should not be investing at all. IntelligentValue is not a day-trading, make-money-instantly kind of service.
As Warren Buffett is famous for saying, "If you can't watch your portfolio drop by 50% without getting nervous, then you probably shouldn't be investing in the stock market." We don't allow our portfolio to drop 50%, but we do allow time for solid companies with undervalued assets and strong revenue streams to bounce back from a drawdown.
Additionally, although an excellent opportunity to have more up days than down, IntelligentValue is not a panacea for all that rubs you wrong about the stock market. We are subjected to the same market cycles and emotionally based buying and selling that occurs all the time in stocks. Our stocks will go up and down. Occasionally we'll get a call wrong and we'll tell you to buy (or sell) when it is inappropriate, only to see the stock go down (or up) afterwards.
Investing takes time, and value investing can sometimes take even more time (but has much higher returns). Your IntelligentValue portfolios will go up and down, sometimes significantly. But if you stick with it, you will be handsomely rewarded for your patience.
So please give the newsletter - and the stock market - a chance to do well for you. You won't be disappointed.
There is a very important theory of human decision making on which we base our newsletter. It is the basis of a field of study called, 'Behavioral Finance.' Most investors are victims of their "Lizard Brains" and base all their financial decisions on hopes and fear. You may think to yourself that you never would do such a thing, but I would almost guarantee that you (and I) are making emotionally based decisions every day. You can read about how emotions affect our investment decisions in this article. Don't be a "lizard!"
We offer trial subscriptions and are hopeful that people will not misuse this promotion. Our objective is to allow people, who wouldn't otherwise take the chance, to use this opportunity to experience the incredible returns we are getting from our IntelligentValue portfolio of stocks. We want to share our methods with as many people as possible to give you the same kind of returns we are getting ourselves.
For your protection, all cancellations must be submitted after logging into the website Member's Area. Your cancellation record is based on your log-in passwords. This system is designed to protect your personal information, personal portfolios, custom stock screeners, and your newsletter subscription from being cancelled fraudulently or in error.
In addition, our policy of requiring you to cancel yourself online insures that there are no lost e-mails, unclear voice-mail messages, or confusion about whether you cancelled or not. When you cancel yourself on the Cancellations Page in the member's area, both you and IntelligentValue will receive a time and date-stamped receipt of your cancellation for our records. The receipt also provides you with the date your subscription will be ended.
HOW? To cancel, just log-into the Members Area of the site using your passwords and click the "Cancel Subscription" link at the bottom of the Member's Main Page. Follow the instructions to cancel if you are absolutely sure you want to cancel. Of course, we hope you'll have another look at the high performance of our portfolio returns compared the alternatives, and decide to stay.
I realize that this page contains a lot to read and digest, so you may want to go over specific sections again. But if you made it this far, it means that you are serious about investing and you are the kind of subscriber we want. We are building a base of serious, intelligent subscribers that will stick with us through thick and thin, understanding that the market moves in strange ways and we can't always hit home runs. But when we do, we knock them out of the ballpark! Thanks again, and feel free to contact us if you have any questions.
CONTACT
For answers to your questions, other details about IntelligentValue newsletter or the website, please CONTACT US.
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2012
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