Tharp's Thoughts Weekly Newsletter (View On-Line)

  • Article Memory is Made Up by Van K. Tharp, Ph.D.
  • Trading Education Many Workshops Selling Out, Register Now
  • Trading Tip Rush for Yield in Dividend Stocks Starts to Slow
  • Matrix Story Two Ideas from the Matrix—One Reader's Story

Low-Maintenance Ways to Earn Consistent Trading Profits

Ken Long once said that he offers the Core Trading Systems workshop out of a strong sense of civic responsibility to the investing public. There’s just no reason to suffer through market returns and worse when such simple systems exist that can consistently provide positive returns — regardless of what the market does short term. Everyone could benefit from having their retirement money or some portion of their trading equity managed this way…even if you mainly trade short term.

For more information on Core Trading Systems, click here.

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Poloron Products:
Memory is Made Up

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Many of you have heard the story of my first stock purchase at age 16.   Fortune Magazine listed a mobile home manufacturer called Poloron Products as having the greatest increase in earnings per share, so I bought 100 shares at $8.   I watched it go up to $20, and then down to $4.  At that point, I bought another 100 shares and it went down to $2 where I bought an additional 100 shares. Then it fell  to zero.  I made nearly every mistake that I possibly could in this trade. 

For the past 10 years, I have wanted to frame some shares of Poloron along with my story as a reminder.  During the days when I originally purchased Poloron, the broker gave me the actual shares, but because I thought they were worthless, I lost track and have no idea what happened to them. I have been searching for Poloron shares through eBay and companies that sell old stock certificates for a while now.  I finally found a certificate recently and bought it for $5.   Even though the certificate was for only for 8 shares instead of my 300 shares, it is still symbolic of my first market experience.


(To see this image larger, click here)

When I received the certificate I was shocked.  My memory tells me that I bought the first 100 shares of the stock in about 1962 when I was 16; the price change took place over the next four years.  The certificate I just purchased was dated 1983 even though my memory was that Poloron Products went bankrupt in the 1960s.  No way was I watching it in 1983.   Could it be that I made an even bigger mistake and lost a stock certificate that had real value and perhaps even went beyond $20 per share at some point?

So what happened? There are several possibilities:

  1. Could it be a different company?  No, it's Poloron Products. They sold mobile homes, picnic containers, snow mobiles, etc.,—which is also what my company sold. That leads me to believe it is the same company.
  2. Did I remember the dates incorrectly? Did the company go bankrupt and then resurrect itself?  No, I read about the journey into snow mobiles and that was in the late '60s and early '70s, however, I Googled the company to find, that in fact, it did go bankrupt in 1981.  But this certificate was dated 1983 and it says the company was founded in 1937, so it was the same stock and was still active in 1983.
  3. In my mind, Poloron Products was bankrupt when I was an undergraduate in the mid-1960s.  Did I just ignore a perfectly good stock for 10 plus years thinking it was bankrupt?  If so, that would be another huge mistake that I didn't know about.  Or did it just become worth only a few cents and so I wrote it off as bankrupt?
  4. If the company was a penny stock in 1983, why would someone only buy 8 shares?  They would have paid less than the $5 I just paid for a worthless certificate in 2013.  
  5. My memory tells me that when I bought the stock, it went straight up to $20 over a few years, and then it plunged to zero within another few years.  Obviously, that was completely wrong in some way.  But that's how I remember it.

The net result of all of this is just further proof that our memories are fabricated by our minds.   I discovered additional proof of this phenomenon when I recently realized that Libby Adams and I had totally different memories of our various meetings in the past.  I thought her version was made-up and my version was correct.  Who knows now?  Perhaps it's all just shared illusion.

I would be interested to know how much of history is made up of memories that may or may not be accurate.  Certainly it is colored by the minds of those who write it.  I'm currently reading a book about John Rockefeller.  The author comments about how inaccurate prior Rockefeller books are, and, of course, he is right.  He says that he found some secret, private interview that Rockefeller recorded late in his life.  But those memories of Rockefeller in his later years were probably as accurate as my Poloron memory.  Of course, when I write about Rockefeller and the money game it will all be my own invention and perhaps none of it will reflect what really happened.  Or perhaps, as A Course in Miracles says, the past is all an illusion.  Did it happen at all?

I'd like to explore the illusion of Poloron some more and you may be able to help me. 

  • Does anyone know how I can find the prior stock symbol for Poloron?  Right now, I can't remember it or find it. 
  • Does anyone know how I can get data of Poloron's price history from 1962 through 1983?  
  • Does anyone know how to find out exactly when Poloron ceased to exist? 
If you have insights on how I can find the answers to my questions, please email me. I might as well know all my mistakes, including thinking the company was bankrupt when it wasn't and then losing the “worthless” certificate. 

I suppose if I really want to play with this particular illusion, I could always find a back issue of Fortune from around 1962 that lists Poloron as the top stock in earnings per share growth.  But what if that doesn't exist either?  I'm not sure I want to enter the Twilight Zone…or perhaps I'm already there.  You, the reader who is probably 100% sure that your viewpoint is correct and that you don't make such mistakes, probably think I am in the Twilight Zone.

This situation with my Poloron experience highlights the problems with looking at past trades. Perhaps now you understand why I have my Super Traders do an exercise in which they list everything they can remember for each year of their life.  It's an exercise to show how we create our imaginary past.  What's the difference between your experience of this moment and a memory of what happened 10 minutes ago, or yesterday or perhaps 20 years ago? 

About the Author: Trading coach and author Van K. Tharp, Ph.D. is widely recognized for his best-selling books and outstanding Peak Performance Home Study Program—a highly regarded classic that is suitable for all levels of traders and investors. You can learn more about Van Tharp at His new book, Trading Beyond The Matrix, is available now at

Trading Education

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Trading Tipdr

Rush for Yield in Dividend Stocks Starts to Slow

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Where do investors turn for income in a yield-starved world? 

There is a not-so-cynical view that Bernanke, Draghi and the other central bankers around the world have knocked interest rates so low to force investors into more speculative arenas to collect yield.  Bonds and note yields are at or below the rate of inflation.  And forget about CDs or passbook savings — these returns look like rounding errors for zero.  

Even mom & pop investors have been forced into the stock market (helping fuel this rally) in search of yields and income.  How do we know this?  Because traditionally staid, plodding companies have been performing like growth stocks!

In the end of my April article, “I Can’t Believe It’s Not Cyclicals”,  we discussed how traditionally defensive or counter-cyclical sectors like health care, utilities and consumer staples had been leading the charge in an up market.  We showed how this pattern was very different relative to other recent bull runs. In that article, I suggested that the run up in defensive stocks would end when retail investors were convinced that the bull would last “forever” and then start rotating into higher beta cyclical sectors like technology and materials.

In the subsequent article, “Are We Unwinding the Defensive Trade?”, we saw this sector rotation is actually happening.  The same logic applies to stocks that investors have bought for yield — they have helped underpin this rally and are now starting to unwind as market participants chase returns more earnestly.  Let’s look at some of the evidence for this trend and discuss where it might lead us.

P & G Imitates Google and Other Yield-Starved Anomalies

Back when it still held a government-allowed monopoly, American Telephone & Telegraph was known as the stock “for widows and orphans.”  It was a safe haven — a defensive stock that threw off a nice dividend.  The same can be said for the telecom sector as a whole in the post-breakup era. While more volatile than utilities, they have the perception of a slow growth area with a service everyone needs (of course, many of the major telecoms have ventured into cellular, internet, TV and other areas — but we’re talking perception vs. reality here…).  Both AT&T (Symbol:T) and Verizon (Symbol:VZ) throw off nice dividends of 4.9% and 4.0% respectively.  And like many dividend stocks, they rallied during the first part of the year but have started to sputter during the latest up leg — along with other defensive stocks.  Let’s take a look:


We can see this same phenomenon with many of the dividend darlings.  Practically all of the utilities (Duke, Southern, American Electric Power, Consolidated Edison, etc.) and many consumer staple stocks (Clorox, Walmart, etc.) look similar. 

One stock that got a lot of attention in the first quarter was venerable Proctor & Gamble.  It’s list of products is a veritable “Who’s Who” of consumer products: Tide, Crest, Pampers, Head & Shoulders, Charmin and Bounty to name just a few.  Over a century and a half old, this company had an impressive 6% revenue growth posted for the last year. Yet, over the past six months, its Price-to-Earnings ratio has been running from 17.5 to 19 — in the zone of growth stock!  Even this dividend blue chip, though, has seen investors rotate away in the last few weeks of market run-up:


Of course, all dividend stocks haven’t topped.  Lockheed Martin (symbol: LMT) and Johnson & Johnson (symbol: JNJ), for example, have kept making new highs along with the market. But the broader rotation is certainly away from the defensive and dividend plays and into traditional cyclical sectors.  With that type of activity, the little bit of cash that remains on the sidelines can finally come in to chase returns.  We can start to look for some market topping action, but as long as our central banks keep the spigots wide open, the markets can remain in turbo mode for much longer than the bears think is reasonable.

As always, your comments and feedback are welcome!  Please send them to drbarton “at”

Great Trading,
D. R.

About the Author: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured guest on both Report on Business TV, and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio. His articles have appeared on and Financial Advisor magazine. You may contact D.R. at "drbarton" at "".


Matrix Story

Inspiration from a Matrix Reader


About half-way through Trading Beyond the Matrix, a powerful insight occurred to me: if I am confident, it will significantly improve the results of my low-risk trading plan that you encouraged me to develop.  One thing I like about your books is that you do not tell your readers exactly what to do, but instead, prompt them to figure out for themselves what to do. You encourage your readers by telling them that they are capable of coming up with their own individual plan.  Reading your books always prods me to go deeper and reevaluate my plan to possibly improve it.  This was the case when I read Super Trader, and after doing lots of work and learning to look at things in different ways, I concluded  that nothing I came up with was any better than the plan I already had in place.  The funny thing is, this time, with The Matrix, when I looked at the very same data I was looking at before, I started thinking about it in a new and different way and could see possibilities I did not see before.  You say we trade our beliefs, but another way of saying that is, we trade how we think about what we see.

The two ideas from your book that I kept thinking about were: first, to get out of the way and let my Higher-Self lead me, and second, that you personally aim to have at least a three to one reward-to-risk ratio, when my plan was more like two-to-one.  Now, my plan has elevated to more like four-to-one.  The two-to-one plan was working for me, but I kept feeling that it was a bit slow but could not figure out how to accelerate it until it came to me in the process of reading your book.  At this point, I am now reading your personal journey in chapter ten.  Thank you for everything.

—John Maes

Editor's Note: Last month, we asked you to send us your stories about how Van's new book, Trading Beyond the Matrix, has affected your life. We are so happy that the book has had such a powerful impact on almost everyone that has read it and we want to share some of the stories we have received with you. If you have a Matrix story, we would love to hear it! You may be featured in an upcoming newsletter. Please send your stories to [email protected].

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May 22, 2013 #630


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