Welcome to the World of the "PSYCLE"....an Interview with Jim Goodman
Q: So, Jim, what is it that you offer people ?
* I was one of a very small number of honest, veteran (19+ yrs.) trading/investment Broker/Advisors left, who specialize in helping people with stocks, bonds, options, industry groups, short-term/long-term, employing my "PSYCLE sm" concepts to predict/time probable price moves in Equities, and Industry Groups, BEFORE they are recognized by "the masses and the media", who are by nature, often incorrect in their assumptions, beliefs, suggestions and (in)actions....I became both, a Broker and an Advisor, so I could offer more nice people, more direct aid/services, with my many "PSYCLE sm" ideas, directly, and through my teaching....
Q: Specifically how do you try to accomplish things for your clients ?
* After determining each person's Financial and Psychological needs, situation, objectives, experiences, and beliefs, I tried to match the most attractive "PSYCLE sm" ideas available at any given time, to the type of accounts and services desired....special emphasis was placed on maintaining a non-emotional, non-judgemental, diversified, risk-managed approach, over a long-term time period together....this will differ greatly from what people have been unfortunately "taught" to believe, leading to vastly increased potentials, since this approach Removes much of the "extra (and unneccessary) risks" which 95% of all investors/traders often insist on taking, but have never realized....
Q: Besides eliminating all Emotions and Incorrect (mis)beliefs, what else are important benefits of letting your "PSYCLE" help me ?
* By ignoring 95% of the inputs which 95% of all "average" people and media sources incorrectly believe might/should affect prices of things from any moment on, we glean the best potential ideas (both long and short) by taking advantage of normal, usual patterns of Chart/Media/Human Behaviors, which have long existed and performed in the same way, many times before, in history---this is represented by my proprietary "PSYCLE sm" of sequential stages of repeating events/activity, over time....we also save tremendous amounts of time, and "resource chasing", and angst, which are unnecessary, in order to do well....again, very different, very special....
Q: Why do you ignore/avoid following/acting upon over 95% of the financial, fundamental, economic, political, corporate, etc., information, which most everybody else has always believed is so important to know, on which so many people try to use to base their buy/sell decisions ?
* Because many studies going back many decades, have continued to show, that very Little, if any, of the massive amounts of such information disseminated every day/week, truly affects the Prices of individual stocks, bonds, interest rates, etc., in the way that "the 95%" masses incorrectly think they should/will.... the problem, is that so many people have been brought up to believe so many things regarding investing/trading, which are just NOT TRUE historically---but few people have gone back and discovered the historical truth about these many incorrect "misbeliefs", by observing the thousands of continuing examples of "PSYCLES sm" repeating so often in the past, most running counter to "generally assumed (but wrong) presumptions" ....You have surely seen countless historical examples, where "acting upon/ following the generally assumed types of news announcments by Wall St." has caused losses for traders, time after time, often getting/ keeping them excited/long near tops, and nervous/fearful near bottoms.... think about it; "if" news and fundamentals "were" of future price-predictive-value ("FPPV"), then no one reading/acting upon generally disseminated news, would ever lose....and all reporters/analysts would be billionnaires, and never be wrong ....but they are incorrect, a lot, the vast majority of the time, right ?....so why use this/their info. at all, since it does NOT directly help anyone predict future prices enough, to justify the time/effort putting such items into one's brain/psyche in the first place ? Hence, another helpful element in mastering the PSY-chological side of the process....when was the last time anyone actually Taught you anything of significant, useful investing value ? Working with Jim, you will learn much....
Q: So how does your "PSYCLE sm" know where each item is, and is likely to go, in the future, at any given time ?
* Each phase of my "PSYCLE sm" is accompanied by a different combination of three elements, which each change, in combination, as the stock/industry group passes sequentially, from stage to stage, over time.... Each "PSYCLE sm" stage combines:
Q: In other words, you do NOT "recognize/use" the plethora of domestic/intl. news and corporate/earnings/product announcements, in the way "the 95%" use them, as potential inputs on which to base your timing decisions ?
* Once again, NO, unless I/we sometimes use them from a Contrary P.O.V.....since I have eliminated the tons of things which "the 95%" try to employ (and we all know how most people (and professionals) do, as investors/traders, trying to use all that drivel), I have greatly Simplified the whole process, while Removing negative and potentially damaging attitudes, many incorrect presumptions, and predjudices, saving tons of time and effort, while also lowering stress, angst, and expenditure....
Q: Why do so Few people do the "right" things, when they invest/trade ?
* Probably the biggest reasons, are because everybody "wishes" for a "quick fix, black box, overnite approach, which takes no time to employ, works every time guaranteeed, and costs nothing ever" ....Yet I have found almost NO ONE ever thinks to "backtest/check" the actual historical facts nor accuracy of the plethora of mostly "wasted output" which pervades the financial media and advertising claims daily.... people just often tend to "believe" whatever is said/written, just because that person is on the air, or published, or has some "purchased fame or exposure"....plus, almost NO ONE ever even looks at the past "price chart" of the ideas they're considering putting thousands of dollars into, before they act; WHY ? also, many people in recent years, have just occasionally gotten "lucky" (which is fine, mind you, provided the don't become UN-lucky), just holding some issues which have had unsual, long-term rises....it remains to be seen whether they will get "out" before inevitable corrections, or worse....history has few exceptions.
Q: What about "earnings", and "company events", and "economics" ?
* Again, since NO fundamental items have ever exhibited real, consistent, predictable effects (all fundamentals are subjective, and can be manipulated and are often "adjusted" later anyway), no usable "rules" exist on these kinds of "input items", which might be combined into a trading strategy, which can actually PREDICT future PRICE movements in a STOCK, DIRECTLY from such corporate numbers/news....for example, many people "try" to "force" fundamental items, into a "hope" that a stock will "rise", based upon "something they heard/read" somewhere. Then, they compound this illogic, by having NO disciplined strategy/plan, no preset "up" targets, nor stop-losses, no diversification, no portfolio/money mgmt., etc. Sound Familiar ? I invented my PSYCLE to solve much of this situation for you.
Q: What do you mean by "Future Price Predictive Value ("FPPV") ?
* In order to achieve the most, with the least effort and angst, you must SEPARATE, inputs/factors which can be DIRECTLY used to predict price moves, from news, announcements, and items which, while they may be important or interesting to know from corporate, or political, or economic, or human interest reasons, DO NOT directly lead to the ability to predict the near-term rise/fall of a specific stock/group....as I keep saying, over 95% of all inputs are NOT of a "price predictive nature", and are therefore USELESS to put into our brain/psyche in the first place....plus, you must learn to buy things BEFORE they rise ("the 95%" buy at much higher prices than they need to/should, and/or on "breakouts" only....why not buy BEFORE the breakout/ rise ? somebody is). You should ONLY be concerned with stock PRICE move....period. You didn't buy the "news item"....or the "company"....you bought their "stock"....dig ? THEY ARE OFTEN TWO DIFFERENT THINGS.
Q: Meaning, that news items, and changes in corporate fundamentals, are totally Separate from price moves which might follow announcements ?
* YES....but this is so difficult for people to accept, they really fight me on this....always to their detriment financially....very insidious....but this plethora of incorrect misbeliefs and wasting of time and effort chasing fudamentals to no avail, is what led to the "PSY" in my PSYCLE....Psychology.
Q: You mean, How people "react" to things/events is at least as important as a specific trading strategy itself ?
* Absolutely....but even this does not occur in the way most people have been "taught"....in my 25+ years near this business, I discovered that the single most important thing to learn, is to be strong enough to actually ADD MORE MONEY to your account, AFTER an occasional "downer" period.... re-read that.... Every good trader will have "off" periods....the key, is to take advantage of the likely improvement which follows, by INCREASING your investment specially at those very times....dig ? VERY valuable advice....but, I have found very few people who do this....in fact, they do the opposite.... they STOP trading after a "down" period, and add money only after they have been "hot" for a while....have you noticed this also ? So they are most often buying near tops, and selling near lows....and, another PSY-chological problem most people have, is they fail to learn their OWN internal "Psycle"....whether they personally are "hot or cold"....and they then fail to take advantage of the trading opportunities this provides....I could cover many more examples of this, if I had the space....but now you understand.
Q: What about "Sentiment"....do you use sentiment as timing help ?
* Of course....Going opposite ("fading") the masses or the majority of individuals, newsletters, media, etc., almost always helps, but I figure you already are aware of this phenomenon....BUT---just because people are "aware" of a concept, still does not mean they ACT properly to take advantage....I have found few investors know how to use Sentiment.... much of the time, what traders "say", differs greatly from what they actually "do" with their investable funds....and, I have had clients who, themselves, are great "contrary indicators", which has helped me and my clients many times (you know, people who are most always late, and/or wrong, right near major turning points in stocks, etc.), especially people who work FOR the very companies/industries my PSYCLE predicts might rise/fall....the biggest sucker punch for most people is the "I know something about or someone with XYZ Co., and they say_____," yeah, right....I don't need to discuss this....
Q: So you're saying that "the chart" of an issue, itself, is pretty much THE biggest single aid, in future price prediction for your clients ?
* Yup....if I had only one item I could choose, the PRICE/ VOLUME CHART would be it....which is great, considering so few people use them.... actually, it is partly BECAUSE so few people use "technical analysis" of charts, that it works so well....It's like "shorting" or buying Puts, to take advantage of the DECLINES in specific issues....so FEW people do this, that it leaves 95% of the gains here, to the 5% (or less) of traders who even try this side of the marketplace---ever think about that ? Almost ALL the money on the downside is made by just a FEW players....pretty good, huh ? Have YOU worked with Puts before ? Why not ? I find most people harbor massive, illogical fears of things they know very little about, and actually believe that it is somehow "riskier" to play the Down side, than the Upside.... yet many issues do Fall in price, every week....hmmm. So, all the money made on the short side, is made by very few.
Q: Great....now, let's cover your "Relative (industry) Rotation" concept....
* Not only have I eliminated the many psychological, misbelief, and information problems which 95% of all investors/traders have, plus most all "timing" problems as to when and where to buy/sell/short issues, plus most "portfolio/risk management" problems people let hinder their performance potentials, I also discovered a layer of protection I add on top of all the benefits the "PSYCLE sm" offers....after viewing 2,500 individual stock charts every weekend, I find that often, Several attractive issues will come from the same few similar Industry Groups, which I'm sure you have noticed , but perhaps not taken advantage of enough.....i.e., not only do many Energy stocks move together generally, so do the Airline, Utility, Financial, Gold, Food, Technology, etc., stocks.....plus, when many companies' price chart patterns in similar industries have the same Patterns, at the same time, this gives us even more protection/ potential for being correct in our price prediction...."Groups" move, much more independently of "the market", every year, than "the 95 %" incorrectly believe.
Q: So most Wall St. homilies, like "all boats float/sink together", are wrong ?
* Not only is MOST ALL "Wall St. Wisdom" WRONG in historical fact, I have noticed, that sometimes, "groups of groups" can be combined to predict things, like, interest rates, BEFORE the move occurs....i.e., if all utility, bank, insurance, mortgage, bond funds, are in depressed "bases" (the cornerstone to all PSYCLE long buys), then, not only might we make money buying these long for you, it also means "interest rates" are very likely to FALL as well, helping you in other areas of your financial life, like Real Esate and your general Business....see it ? I do not have space to illustrate all the benefits of such "PSYCLE SENSE sm" here....but it covers most everything....
Q: What about trying to time "the market", and indexes, etc. ?"
* more money has been lost, or, not made, by the infernal and ridiculous attempt to find a "holy grail" system for picking S.T. moves in averages themselves.....look, why buy ALL the issues in an index, when you can more easily Pick the best/worst few ones ? also, individual issues will always, by nature, give you bigger % moves, than any portfolio of hundreds of issues, right ? If you are overly concerned with "risk", try having preset targets and stops, and more portfolio mgmt., and less emotion, etc....
Q: What about costs, and/or the number of trades per year per account you manage for others....I "assume" trading, means "more trades" ?
* Once again, "conventional assumptions" are Wrong....Two things.... First, you'll do a lot better if you concentrate on positive RETURNS and Risk mgmt., over long time periods, than by worrying about costs.... strategies which carry much Higher return potentials might carry seemingly slightly higher internal costs, but the real key is "the bottom line"....who cares what it costs along the way, as long as the end results are high(er), including costs.... Second, contrary to incorrect investor assumptions, "PSYCLE sm" accounts only effect about 25-30 trades a year, versus "self-trading" accounts which tend to Overtrade, perhaps 100's of trades per year, at so-called discount firms, where, they trade too often, get too emotional, waste time better spent in other endeavors, and often end up generating much more commissions over time than even at full-service firms....studies have shown that such supposed discount accounts actually cost the investor MORE each year, because they tend to do so many more trades, not even counting your additional expense of time and angst, which I save you, by using my PSYCLE....plus, as recent articles/studies have shown, sometimes, executions are worse, and all costs are not always disclosed, but you already know that.
Q: I know you are working on your "PSYCLE" book, but can you just give a few historical examples of your "PSYCLE" in action from recent years ?
* Way too many to list here, but try these:
Q: How did your actual client accounts do, and your own ?
* First, while I have had many wonderful people as accounts over the years, the biggest reason why some have not achieved as they could/should have, is due to each person's already-often-ingrained sets of misbeliefs, plus their personal life situational pressures, even after following and supposedly learning, many "PSYCLE sm" tenets alongside me, which at important times, tended to cause them to often NOT act, properly, as per Psycle signals, whether due to illogical overreactions to S.T. performance, or fear after a drawdown, or too much excitement after a good period, etc. Also, people in recent decades have been too mobile/changing in their families/ lives/careers, which has tended to prevented many clients from staying with the program long enough as desired....it's just the way this wonderful country has evolved....BUT--- my own, real, actual, no-nonsense, "straight long options on individual stocks only" account, begun Oct. 1990, has, as of Feb. 1997, had a way-above-average rise in value, so far, with 39 completed option trades (see my track record elesewhere).... But, I shy away from creating too lofty expectations (that would be emotional, right ?) so please contact me for more info. about my own "PSYCLE sm" acct. Also, in print, in advance, and I can prove it, I have probably correctly predicted more, and more successful individual stocks/ groups movements, than anyone in the business....my "problems" have rarely been the result of my buy/sell decisions trying to help others, but more, other people's resistance/unacceptance of proper actions or "the PSYCLE sm" itself, and/or people's inability to learn, or let someone else help them.
Q: For what kinds of accounts might your "PSYCLE sm" work ?
* Obviously, all personal trading/investing account needs.... short-term and/or long-term, for rises and/or declines in items....for high-priced and low-priced ideas, NYSE and OTC and Bonds and Mutual Funds....for all types of Pension, IRA, Keogh, and corporate accounts....for conservative/ speculative and income needs....for all ages....etc....specific strategies can be molded to YOUR situational needs....There are tons of consistent, historical examples of how and why the PSYCLE works so well, so often....too many to list....I'm sure you know of many anyway....the problem, is that 95% of all people self-defeat their potentials beforehand, with useless/damaging inputs, incorrect and inbred (mis) beliefs, wasted energy, needless pressures, lack of portfolio risk mgmt. skills, and ignorance of historical facts and technical analysis....life is wonderful and difficult enough, without sabotaging, what is a pretty simple process, which "the 95%" insist on complicating....I have spent my life creating a possible answer to the investing/trading question, "the PSYCLE'', for you to take advantage of....hey, I didn't invent Physics, or Human Nature....but isn't it about time YOU took advantage of the long-existing, repeating, more easily identifiable Patterns within the financial marketplace, for your own benefit, for the rest of your life ?
(949) 786-2577 or "(949) STOCKS 7", M-F, 12-5 pm, EST, or at: P.O.B. 17596, Irvine, Ca., 92623 Thanks for your sincere and serious interest,