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Sterling Weekly for September 17th, 2003

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As part of an ongoing series of articles I have been writing about 11 "Rules for Trading" that I have developed. In last week's edition of the Sterling Weekly I covered my Fifth Rule of Trading, "If a stock or option does not move as you expect within a few days then look to exit the position." This week I am going to discuss my Sixth Rule of Trading, "Do not become emotionally attached to an investment!"

When an investor or trader will become emotionally attached to an investment or trade all the emotions that you strive to remove from the decision making process become a factor and they cause you to stop paying attention to any of the rules, methods, or anything else that has allowed you to be a profitable trader or investor. They are all bad, and do not help your efforts to maintain profitability. Fear of taking a loss will cause you to hold onto a stock that has moved against you and increase your losses. Greed will cause you to hold a stock you should be looking to take profits in because you want it to go higher. Insecurity will cause you to sell a stock before you should. I have seen investors and traders become emotionally attached to the idea that a certain sector of the market or a commodity was going to skyrocket in value and as a result they invested in stocks with very bearish chart patterns. Just think of all the people who bought gold stocks during the decade long bear market in gold. All that capital became nonproductive and wasted away. Or the large number of people who where buying Yahoo on the dips when it was coming down from its highs of $250/share.

In order to be a successful trader or investor you must be able to remove your emotions from the decision making process! It doesn't mean you should not trust your instincts, but know the difference between instinct and emotions.

I find it more than somewhat ironic that the head of the California retirement pension plan (CALPERS) is calling for NYSE Chairman Dick Grasso to resign from the NYSE when they do not have any money invested in the NYSE nor do they represent any of the represent any of the employees of the NYSE. Yet, they are not calling for the resignation of California Governor Gray Davis who has bankrupted the State of California and continues to give away state's money through executive decisions to anyone he thinks will accept a handout and vote to keep him in office during the upcoming recall election, and thus directly effecting the lives of people who pensions they are managing. On second thought, it is very hypocritical on their part and is an example of what happens when politics overly effect the management of an important office such as the giant CALPERS retirement fund.

Economic Calendar for the week of September 15th, 2003.
DATE Est. Time Release For Actual Consensus Prior Revised From
Sep. 15 8:30am Business Invent. Jul   0.0%


Sep 15 8:30am Current Account Q2   ($136.0B) ($138.0B) ($136.1B)  
Sep 15 8:30am NY. Empire State Sep   15.0 12.0 10.0  
Sep 15 9:15am Industrial Prod. Aug   0.4% 0.3% 0.5%  
Sep 15 9:15am Capacity Utilization Aug.   74.8% 74.7% 74.5%  
Sep 16 8:30am CPI Aug   0.2% 0.3% 0.2%  
Sep 16 8:30am Core CPI Aug  


0.2% 0.2%  
Sep 16 2:15pm FOMC Meeting            
Sep 17 8:30am Housing Starts Aug   1.825Million 1.844M 1.872M  
Sep 17 8:30am Building Permits Aug   1.80M 1.80M


Sep 17 2:00pm Treasury Budget Aug   ($78.0B) ($778.5) ($54.7B)  
Sep 18 8:30am Initial Claims 9/13   405k n/a 422k  
Sep 18 8:30am Leading Indicators Aug   0.4% 0.4% 0.4%  
Sep 18 12:00pm Phil. Fed. Sep   20.0 15.1 22.1  
Sep 18 2:00pm FOMC Minutes            

Prime Update:

Sterling Investment Services is an investment research and money management firm publishing the Prime Stock Newsletter. The Prime Stock Newsletter is a daily comprehensive newsletter that is useful for investors and traders alike. Whether you are looking for short term trading opportunities ranging from day trading to a couple of weeks or if you looking to acquire a long term portfolio at smart entry points. Subscriptions a $30/month. a 3 DAY TRAIL SUBSCRIPTION IS ONLY $4.95 (more).

Highlights from Recent editions of the Prime Stock Newsletter
Recommendation Date Entry Point Recent Close or Exit Price Profit* Note
Sandisk Corp. 'SNDK' Sep 4, 03 $61.21/share $65.10 exit on Sep 5th $3.89  
Neflix, Inc. 'NFLX' Aug 21st $28.25 $36.53 exit on Sep 9th. $8.28  
Yahoo, Inc. 'YHOO' Sep 3, 03 $34.00 $36.80 exit on Sep. 9th $2.15  
* The per share PROFIT is a theoretical calculation based upon the opening price the day the recommendation is published and the intra day high (or low for short sales) on the exit day.

The Dow Jones Industrial Average:

Today's Opinion: Closed @ 9,567.34 Current Expectations: I am still expecting the Dow to move higher and test 9,660.60 (our target level first published in the Sterling Weekly for August 18th.) over the intermediate term.

The S&P 500:

Today's Opinion: Closed @ 1,029.32 Current Expections: I am still expecting the S&P 500 to test 1,057.86 over the intermediate term.

The NASDAQ 100 (NDX)

Current Opinion: Closed @ 1,382.82 Current Expectations: I am still expecting the NASDAQ 100 (NDX) to move higher and test 1,555.11 and then 1,846.96 over the intermediate term.

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Disclaimer: The Sterling Investments series of newsletters is produced by Sterling Investment Services, Inc. All information used in the production has been obtained from sources believed to be reliable and accurate. Sterling Investment Services does not warrant or assume any liability for inaccuracy of the information used to produce our publications. To receive further information on these services please visit our web page at: If you would like to contact us our fax # is (404)-816-8830 Email address is: Sterling Investment Services may hold positions in the securities recommended or may be providing consulting services to the companies mentioned within this report.
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