Who We Are
Dr. Winton Felt founded Asset Management Systems (AMS) in 1988. During the following years, Asset Management Systems created a publication called Value Indicator, managed investment portfolios, and tested the profitability of more than 50,000 investment strategies. This system testing involved complex multivariate analysis using real data spanning many years and a wide range of market environments. The project usually required 8 to 16 hours a day and continued for 3 years. The goal of this research was to find investment disciplines (systems) that could consistently outperform a buy and hold approach by at least 20% a year. AMS also conducted investment strategy seminars and tutorials for investors and brokers.
Research and the evidence of trading activity in a real account convinced us that obtaining consistent returns of well over 40% a year was attainable (without the use of leverage) if a person implemented a good well-disciplined investment strategy. However, in the process of teaching others some of the principles of effective trading, it became clear that most people do not know how to time their purchases correctly, what constitutes a sell signal, or how to determine where to place effective stop-losses. Also, most did not know how to find good investment candidates.
Investor's Need for Tools and Education
The average investor tends to depend on television "gurus" who tout their favorite stocks. They read Forbes, Barrons, and Money to find investment ideas. Articles like "Five Stocks You Should Buy Now," are favorite reading for finding investment ideas! How can there be ANY precision in the timing of a purchase when the purchase is made pursuant to the suggestion of a magazine article that was conceived weeks before its publication? Then there is the portfolio manager in the TV interview who gives a list of his favorite picks. The viewer does not know that the speaker has been buying those stocks for several months and that it won't be long before he begins to lighten up on his positions. Such people buy and sell over a period of months and they have an unending source of new money. The reality is that it may be too late for an individual with a finite amount of money to begin taking his initial position in any of the recommended stocks.
Unfortunately, most people do not know how to find timely stocks on their own. By "timely," we mean stocks that are ready to "go" within a few days. The average investor does not know how to define a non-performing stock. Most do not know how to weigh the risk of holding on to a stock against the probable reward. In short, most do not have a well-designed discipline to guide them in their buying and selling. They let others do their thinking for them. At one time or other, we have all been ready to sell a stock only to be talked out of it by a broker who said "Don't sell now, this is the time to buy," and then watched the stock decline. Everyone who has ever invested has probably been there and done that at some time in their investing "career." We have seen the analysts we have listened to and trusted discredited because of "conflicts of interest" or because their recommendations were fraudulent. We have all been talked into stocks that go nowhere for months on end. We do not say there is anything wrong with reading investment publications or listening to media gurus. Smart investors monitor the media to tune in on market sentiment. When the gurus are most bullish, that is usually the time to become wary. The bottom line, though, is that most investors do not know how to do their own thinking to the point where they can be self-directed. They are directed by others. Thus, we perceived a need for investor "enablement" through training and education.
Tools, Resources, and Education
How did our offerings to address this need for enablement take shape? For many years we had been designing tools and defining procedures that would bring clarity and precision to our own investment decision-making. Thus, over the years, the company has developed many tools, disciplines, and resources. We simply decided to share some of the most important tools and procedures with others. Though training and education had been a major part of our business before, we concluded that the time had come to focus our efforts entirely on addressing that need through our publications, software tools, and tutorials.
On December 31, 2005, Felt Financial stopped managing portfolios for others to focus entirely on investor enablement. In keeping with that shift in emphasis, the company changed its name from Felt Financial, LLC, to Stock Disciplines, LLC. Our company's marketing identity is now StockDisciplines.com. The efforts of our personnel have undergone a seamless evolution of purpose going back to 1988. The goal of the company is to provide investors and traders with the tools and knowledge necessary to invest intelligently and with discipline. Though the term "trader" is generally applied to a person who holds a position for a relatively short time, we consider all investors to be traders. Both "traders" and "investors" must buy and sell. How successful a trader or investor will be is determined, for the most part, by how the processes of buying and selling are managed. It is this process of buying and selling that requires attention, and that is where we focus our efforts. We use the terms "investors" and "traders" interchangeably because they both must use the same key processes to implement their plan. One just moves a little slower than the other. The other differentiating factor is that "fundamentals" are increasingly important in stock evaluation as the holding period increases. However, that is not to say that fundamentals are not important to the short-term trader.
We have stated that "the goal of the company is to provide investors and traders with the tools and knowledge necessary to invest intelligently and with discipline." How do we realize that goal? We believe that the key to successful trading is in the correct timing of purchases and sales. The Valuator (in publication since 1990) was created to help us find stocks that are timely from a fundamental perspective (it now provides both fundamental and technical information on about 500 stocks). StockAlerts was created about 2002 as a private tool used by members of our company to enhance their trading performance. At first only a few scans were included but that changed quickly and StockAlerts became a major resource in our effort to keep an extensive "watch list" of timely trading candidates (so we could quickly replace stocks recently sold). In 2007, it was decided that StockAlerts should be made available to the public. Its purpose is to make it easy for traders (and investors) to find stocks that have recently completed or nearly completed a technical "setup." By "setup," we mean a pattern of stock behavior that often precedes a price surge. Buying on a meaningful "trigger event" just after completion of a "setup" is generally a much better way to buy than the undisciplined approach used by many people. There are many "trigger events." One, for example, might be evidence that the expected price surge has just begun. Our stop loss calculator, ATR Stops, was created to help people improve the timing of their sales. A good "trailing stop" can make an excellent selling discipline. It can be either a sell discipline in its own right or a backup system to another well-conceived selling strategy. The educational goal of our enterprise is carried on through our tutorial and training programs. The "Free Tutorials 1" and "Free Tutorials 2" links will take you to our tutorials pertaining to strategies, procedures, or indicators. Remember that our site is very new and it is still being "tweaked." We expect that the number of tutorials offered will eventually increase. Our paid-for training programs are not described on this website because they are generally not available to new trainees at this time. When they become available, an announcement to that effect will be made on this website. Descriptions will be provided at that time.
For more on why we stopped managing money for others to focus on our own trading, see question #10 after clicking on
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Costa Mesa, CA 92628 USA.