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Introduction: Succeeding in a tough economy SECTION II - Tools You Need

SECTION I - MISTAKES You Are Invited! Please R.S.V.P. 32
Mistake 1: Getting Wiped Out by Stock Concentration 1 Just Ask Our Clients 34
Mistake 2: Being Deceived by Market Indices 4 The Stock Market Wizards 35
Mistake 3: Relying on the Proverbial Breakeven 7 www.equitytube.com 36
Mistake 4: Failing to Demand Performance Results 9 Letter From The Chairman 37
Mistake 5: Being Vulnerable to the Media 12 www.wallstreetfrontier.com 42
Mistake 6: Not Understanding Financial Jargon, www.minerviniprivateaccess.com 43
or “Where Is My Straight Talk?” 14 About Michael Weiss 44
Mistake 7: Not Diversifying (and Not Knowing Privacy Policy 46
That a 50% Loss Requires a 100% Gain) 16 Disclosure 49
Mistake 8: Falling Victim to the ‘Ostrich Effect’ Contact Information 51
During Market Declines 19
Mistake 9: Not Understanding the Dangers
of Overdiversification 21
Mistake 10: Not Knowing That Cheap Stocks Are Cursed 23
Mistake 11: Listening to Stock Market Gurus 26
Mistake 12: Getting Discouraged 28

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com

Whenever I read or hear new advice, I digest it and then consider the source.
Most of the time, it is subjective or infected with special interest. It is not easy to
be a successful investor.

My journey in the stock market began more than twenty years ago and includes
a story that exemplifies the challenges for the individual investor. I was having
dinner with a friend and he told me a story about Rich.

Rich never expected a speeding ticket to cost him $38,485

Rich was in a hurry to buy some groceries before heading home to watch the
Yankees game. He was traveling 45 mph in a 45 mph zone, but missed the sud-
den sign change to 30 mph. The policeman pulled him over and handed him an
$85 ticket. It wasn’t a pleasant way to start his Sunday, but at least, Rich thought
“that was that.”

 A few months later, Rich learned that his car insurance payments increased by
$75 a month. Now his $85 speeding ticket mushroomed to $985. A hefty price
to pay for going just 15 mph over the speed limit, but once again, Rich thought
“that was that.”

Six months later, Rich went to lock in a new home loan. A $750,000 house with a
$500,000 mortgage seemed like a conservative ratio. But what Rich didn’t know
shocked him. The mortgage company not only checked his financials, they also
checked his driving record. The speeding ticket cost him 0.25% on his interest
rate (1/4 point). Over 30 years, 0.25% on a $500,000 mortgage equals $37,500.
Adding the higher insurance premiums, the seemingly innocuous speeding
ticket wound up costing Rich $38,485.

Through repetition, I learned the nuances of investing, and in this book, my first,
I illustrates the compounding effect of innocent mistakes and how to avoid them.
I will reveal to you those things that I know can make your investing life miser-

able, including: being deceived by market indices, not diversifying, falling victim
to the ostrich effect during market declines, and listening to stock market gurus.
Avoid them, be disciplined and dogmatic about your investment strategy, and
success will be yours.

The book, in simple English, avoids financial jargon and describes strategies that
can be instantly implemented by most investors. This book is your definitive list
of twelve investment mistakes. Minimizing your investing mistakes is similar to
limiting your losses. It is imperative if you are to be successful.

Failure is never seen as failure in the investing world, only as a learning experi-
ence. The definitive list of twelve investment mistakes will shorten your learning
curve and put you in a position to maximize your returns in the greatest invest-
ment vehicle in the world - the stock markets of the United States of America.

As you read through this list of investment mistakes, keep two simple thoughts
in the back of your mind. Please understand that while my list is detailed and
definitive, it is by no means comprehensive. Investing requires education, experi-
ence and a tenacious will.

There are simply too many mistakes that you can

make as you enter this world. Second, on page 38,
I extend to you a call to action. If you read nothing
else, I suggest that you take the time to read and
understand my call to action. It will help you in
your endeavor. Good luck and best wishes!

Michael L. Weiss
Frontier Financial Advisors, Founder
The Mistakes

Getting Wiped Out by

Stock Concentration
The whole point of diversify-
ing your portfolio is so that
when some of your invest-
ments lose, others gain. This
strategy minimizes your port-
folio’s volatility. If you are
a C-level executive at a public
company, do you have a
concentrated stock position?
If so, watch out, as a major
stock market decline can wipe
out a decade of hard work.


If you work for a public company, you are granted stock op-
tions and warrants. Your company is on the move. Each year
the compounding effect is working for you as you receive
more and more. Your stock price continues to rise. Then
what? This is your dilemma.

Warren Buffett and Bill Gates, two of the world’s most

successful and richest men, each took a temporary 50%
hit to their net worth within the last decade.

You and I can’t afford to take a loss like that, even if it is

temporary, and especially if you are nearing retirement.


Many of the most well-known stocks will go through

a period of massive consolidation of at least a 50%
retraction. Companies like Microsoft, GE, Merck, GM,
Citibank, Home Depot, Research In Motion and Merrill
Lynch have all experienced massive drawdowns.

If you own or inherited a stock that has moved sig-

nificantly higher over the years and now represents
a significant part of your investment portfolio, put a
plan in place to systematically reduce your holdings.
If you want to take your emotions out of the equa-
tion, institute a calendar plan that automatically sells
a predetermined amount regardless of the market

Lastly, do not let the fact that you have to pay taxes
undermine a well-thought-out, balanced investment
approach. The consequences could far outweigh
Uncle Sam’s take.

The best course of action is to develop a systematic sale

system. Decide on a number of shares to be sold every
quarter and systematically sell them. If the stock is head-
ing south, do not override your system. By continually
selling and diversifying the proceeds, your portfolio and
your family’s needs are protected.

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 3

Being Deceived by
Market Indices

The Dow Jones and the S&P

500 indices are myopic views
of the overall stock market.
The media focuses on these in-
dices, and chances are the suc-
cess of your portfolio is being
judged by your comparison
to them. Are you comparing
apples to oranges? Further-
more, relying on these indices
during a market correction
can lead to a false sense of
security, as they may not pro-
vide an accurate picture of the
investment climate.

Stock Mix - The Dow Jones Industrial Average - October 11, 2008
Could there be a circumstance
where the index advances
while the broader number of
stocks continue to decline?
Absolutely! This disparity is a
result of the way the indices
are computed.

In the Dow, which consists of

only thirty stocks, (see chart)
stocks with higher prices
carry greater weight than
lower-priced stocks. So when
a high-priced stock rises, it car-
ries more weight in the index.
These weights change daily as
the prices of the shares rise or
fall. When the stocks rise, their Consider the comparison of a stock whose Dow weight is less than 1% (General Motors) to one with a
rise adds more points to the Dow weight greater than 8% (IBM). There have been days when the Dow’s rise has been due entirely to
Dow’s advance. the rise of a single stock.


The S&P 500 isn’t much better. You might think that because Company % Company %
there are 500 stocks instead of thirty, the index might be more ExxonMobil 4.12 General Growth 0.01
comprehensive. Think again. Each individual stock is weighted General Electric 2.87 Teradyne 0.01
Procter & Gamble 2.3 AutoNation 0.01
by market value, which is the sum of the number of shares out-
Microsoft 2.15 Office Depot 0.01
standing times the price of the stock. As of October 11, 2008, Johnson & Johnson 1.98 MGIC Investment 0.01
the top ten stocks represented more than 20% of the value of JPMorgan Chase 1.95 Meredith 0.01
the S&P. Just as surprising is the fact that the bottom ten com- AT&T 1.68 Ciena 0.01
panies represent just 0.1% of the overall index. IBM 1.51 Titanium Metals 0.01
Chevron 1.51 Unisys 0.01
Wal Mart 1.45 Dillard’s 0.01
Keep an eye on the individual stocks if you really want a com-
Total 21.52% Total 0.10%
prehensive look at the overall stock market.

Since a small group of companies can move the Dow

Jones and S&P 500 indices, do these indices truly reflect
the health of the overall stock market? While they might
be useful, they are hardly comprehensive. Keep your eye
on the individual stocks if you want to know what is really
going on.

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 6

Relying on the
Proverbial Breakeven

In financial circles, the term

‘breakeven’ is heard most
often when people are in
investments in which they
are losing money. It is their
hope to get back to break-
even - which equates to
neither a gain nor a loss.
The danger lies in the at-
tachment to getting back to
breakeven. This is especially
true during a major market
decline, when the previous
market leaders could be the
new recovery laggards.

The ultimate authority on whether you made a good or
bad investment is the price of the stock. The management
team, company strategy, product mix, patents - they don’t
matter. What does matter is the current price of the stock,
which reflects the current value of the company.

This is a difficult concept to implement, because no one

likes to admit they made a mistake. Most people think that if
they have not sold the stock, they still have not lost. Look at
every investment for what it is - a public company expected
to grow its earnings and thereby reward its shareholders. If
you are not being rewarded, chances are the company is not
performing. Falling stock prices can be a sign of bad funda-

Don’t let the price you paid for a stock influence your invest-
ment decisions. Get in the habit of taking small losses and
looking for new opportunities with better fundamentals.
If you must own the company, you can always buy it at a
future point in time. Protect your capital and you will be a

Your cost basis for the stock (the price you bought it for)
should never influence your investment decision. Look at
each investment today, regardless of the price you paid,
and ask yourself, “Is this company still worth owning?”


Failing to Demand
Performance Results

Every savvy investor must

demand intelligent, accu-
rate, clear reporting. How
else can you know whether
you made money or not?
Pretty simple concept, but
you would be amazed at just
how confusing some finan-
cial statements can be. In a
bear market, the speed and
transparency of your infor-
mation must increase, which
will allow you to make the
appropriate adjustments.

Have you ever wondered why your brokerage statements

are so confusing? Have you ever wondered why those firms
don’t provide you with precise performance results for each
of your accounts and then one easy-to-understand consoli-
dated report?

I was perplexed by these same questions. In 1994, I de-

manded change, so I started the first consolidated financial
reporting company in America to provide investors with this
critical information. Producing performance and tax reports
on more than $24 billion in assets for the high-net-worth
market made the answers to the above questions extremely

If you have read this far, I must be engaging you, so in return for your undivided attention, I am prepared to offer you a unique proposition.
If you aren’t crystal clear on what you own and don’t understand your portfolio allocation or how you are doing, fax us your statements
(212-504-3073) and we will conduct a portfolio X-ray, free of charge and without any obligation. All your private information will be kept
strictly confidential (please see our privacy statement at the end of the document or go to: http://wallstreetfrontier.com/privacy).

Many of the big institutions hold back your infor-

mation because they do not want you to see how
poorly you may be doing!

Demand your performance results on a gross and

net basis, and have those firms tell you exactly how
much you have paid in fees to achieve those results.
If you are not getting the results you deserve, move
your money into index funds or consult a financial
asset management company that is not afraid to be
judged on net performance.

Have you ever wondered why those same statements

don’t clearly show you how much you have paid in com-
mission and management fees on each of your accounts
and a running annual total? Have you ever wondered why
the mutual fund companies do not provide individualized
performance reports instead of the fund’s performance
report and why many of them do not fully disclose all the
fees associated with running those funds?

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 11

Being Vulnerable
to the Media

The media thrives on ex-

citement and tragedy. This
is especially true during a
bear market. It stimulates
you into making quick,
uninformed decisions by
creating a sense of fear and
urgency. Use care when
relying solely on the media’s
unsolicited, free advice.


Have you ever seen the financial television shows where a appeared, wouldn’t they be focusing on running their own
person purporting to be a successful money manager tells money? Thanks to the Internet, these talkative investment
you how he made it? He went to a fantastic school, then professionals’ recommendations are now being measured.
worked for the big investment banks and now he’s on your
television. He freely doles out investment advice to you Before you take a stock tip from an actor, advisor, friend or
every night. family member, attempt to quantify the person’s past suc-
cess and understand his or her investment process.
The media has only one goal - to sell advertising. The pro-
ducers of these shows realize that their audiences are so-
phisticated and intelligent, so they build a brand around a
sense of authority using experts who sound like they know
what they are talking about.

Their manner is authoritative, and they appear to be people

you can trust. So much so, you sometimes follow their tips
with without performing your normal due diligence.

We must ask ourselves, what are those pundits really selling,

entertainment or advice? If these folks were as good as they

Relying solely on the advice and tips offered to you by fi-

nancial experts on television is one of the biggest invest-
ment risks you can take. I encourage you to watch the
shows. Learn from them. But don’t rely solely on their


Not Understanding
Financial Jargon, or
“Where Is My Straight

Knowing some of the basics

of financial terminology is
essential when you’re on the
road to becoming a success-
ful investor. I said basics.
If you don’t understand
what is being said, then
ask for clarification or find
a financial asset manager
who speaks your language.
Watch out for the financial
rhetoric during stock mar-
ket corrections.

Alpha? Beta? Sharpe ratio? What are these financial pun-

dits talking about?

A recent survey conducted by AARP reported that 53%

of Americans said they had made a wrong decision on an
investment because they were confused or simply didn’t
understand the nature of the investment. A shocking 73%
stated that financial advisors use more jargon than car me-

Throughout the years, we have learned to slow down the

auto mechanic. New types of service centers have been cre-
ated to deliver an easy-to-understand message so you can
make an informed decision. It is time for the financial ser-
vice industry to do the same. Force the analysts to use the
same rating system, so there is no chance of misinterpreting
their advice. Accountability starts with clear communica-

The fact is that you cannot make an intelligent, well-in-

formed decision if you don’t understand what’s being said.
Whether you do it yourself or you hire a financial advisor,
you owe it to yourself and your portfolio to learn the lan- Accountability starts with clear communication. Practice
guage. it and demand that it be reciprocated. If you don’t under-
stand what your financial advisor is saying to you, then
ask him to explain. It’s that simple.


Not Diversifying (and

Not Knowing That a
50% Loss Requires a
100% Gain)

Owning 1,000 stocks will

not protect you in a bear
market and may result in the
destruction of your capital.
A long-only, buy and hold
investment strategy is not a
diversified investment strat-
egy. All investors need to
diversify their portfolios and,
perhaps more important,
diversify their strategies.


Ask yourself this question: How many successful profession- What is the risk of being solely committed to a long-only,
al money managers run a portfolio with ten or fewer stocks? buy and hold investment strategy during a major market
I can’t think of any. Why should you try to be the first? decline?

Working with stockbrokers who If your portfolio drops 10%, you
Percent Stock Drops Percent Gain Needed
must call you before every pur- to Break Even can make it back with an 11%
chase can create the same trap. 5% 5.26% gain. If it drops 20%, you can make
How many concurrent stocks 10% 11.10% it back with a 25% gain. But if it
can you be sold? Be updated on? 20% 25.00% drops 50%, you must make a 100%
30% 42.86%
Make timely decisions on? Com- gain just to break even! Look to
40% 66.67%
pound that with the fact that you 50% 100.00% the left, the numbers do not lie.
are not your broker’s only client 60% 150.00%
and I think you get the point. 70% 233.33% A risk-controlled, fast-adapting in-
80% 400.00%
vestment strategy should be a part
90% 900.00%
The global investing landscape of everyone’s portfolio. The ques-
has changed forever. China, India tion is, what does that strategy
and other foreign countries are growing in influence and look like and are you capable of deploying it yourself?
power. The result is increased volatility for the foreseeable

Many investors’ stock portfolios consist of ten stocks or

fewer stocks. If you don’t have the capacity to research
and own at least twenty separate companies, you should
obtain the advice of a financial asset management firm.


First off, all investors should consider a strategy that has

the capability to hedge their investment. The purpose is
to reduce your portfolio’s exposure to a stock market de-
cline. This is a risk reduction strategy that will also reduce
your potential profits. When it is deployed with the cor-
rect precision, it will help reduce a portfolio’s volatility.

While hedging is effective, it does not guarantee port-

folio safety in a declining market. The only way to ac-
complish this is by selling stocks and moving to cash. A
properly managed portfolio will move you to 100% cash
and eliminate all future stock market risk.

These strategies are being used successfully every day.

Remember: Losing 50% of your portfolio value forces you
Be aware, and question individuals and financial firms
to make a 100% gain just to get back to breakeven. That is
that are dogmatic about one investment approach. Suc-
why this is an area where every investor might be better
cessful long-term investing demands a combination of
off consulting with a sophisticated financial asset manage-
all investment approaches.
ment firm.

The cost of being wrong is too great.

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 18

Falling Victim to the

‘Ostrich Effect’ During
Market Declines

“If you can’t see trouble

coming, then trouble can’t
see you.” We all know this
isn’t true, but investors are
notorious for ignoring their
portfolios when bad news is
imminent. Not opening your
statements (the equivalent
of sticking your head in the
sand) is falling victim to the
ostrich effect.


There will always be times when the stock market looks like
it will never recover from an extended correction. Investors
are fearful and concerned, which is exactly where the finan-
cial reporters want you. Bad news delivered in a compelling
way increases viewership and increases profit potential, at
your expense. The financial media brainwash us, making a
case that this current cycle is like no other.

Market corrections are a fact of life. There is nothing that can

be done to prevent or stop these corrections. They come
and go. Don’t ignore your problems; they don’t simply go
away. As hard as it may be, you must open your statements,
log in to your accounts and evaluate your position. Again,
doing nothing is a certain recipe for disaster. Routines are a
necessary part of investing, and discipline is required.
Make it a habit to routinely monitor your investments
during good times and bad, and if you are too upset to
take on the task, call an objective professional for advice.

When the financial news is bad and your stock accounts

are down, do not stick your head in the sand like an os-
trich. This is very dangerous. Instead, recognize that the
market is correcting, turn off the TV and examine your
risk. This is when an experienced, educated financial advi-
sor is truly worth his or her weight in gold.


Not Understanding
the Dangers of

Diversification is the hall-

mark of the responsible in-
vestor. Is it possible to own
too many different invest-
ments? If that occurs, your
investment returns may be
diluted while your portfolio
achieves little additional
protection during a stock
market meltdown.


As we discussed earlier, diversification is the mark of a objective is to perform identical to the market, then why not
responsible investor. What is the effect of too much own a portfolio of index funds, which have a much lower fee
diversification? Let’s take two popular examples: structure and have favorable tax treatment?

Mutual Funds: Many of the best-known mutual funds Warren Buffett got it correct when he said that “wide diver-
own hundreds of stocks (e.g., Fidelity ContraFund owned sification is required only when investors do not understand
361 stocks and American Fund Capital Income owned 1,812 what they are doing.” If your objective is to outperform the
stocks as of October 27, 2008). On average, most mutual indices, you might be better off working with a financial
fund owners own four mutual funds. Four mutual funds asset manager who can provide you access to a professional
multiplied by 200 stocks each means that investors own, on money manager.
average, 800 stocks.

Wrap Accounts: he same holds true for wrap account

investors. A wrap account is a money management program
in which investors choose multiple managers under one fee
arrangement. Any time investors choose multiple money
managers, they must watch out for overdiversification.

The S&P 500 represents a broad index of 500 stocks. If you

were to own all 500 of those stocks, could you outperform
that index? If you owned 800 stocks, what would your
chances be? Given that the only reason to own a mutual It’s important to remember that no matter how diversi-
fund is to outperform the indices, by overdiversifying you fied your portfolio is, your risk can only be minimized. You
make it nearly impossible to accomplish your goals. If your can reduce your risk associated with individual stocks,
but no amount of diversification can prevent losses from
a stock market correction. The only way to eliminate all
market risk is to move to a cash position.


Not Knowing That

Cheap Stocks Are

Low-priced stocks usually

indicate depressed funda-
mentals. Price is a excellent
indicator of buyer interest
levels, which are normally
driven by a company’s
ability to grow its earnings.
Low price may be indicative
of things to come, and dur-
ing a major market decline,
low-priced stocks may be
the first to decline and the
23 last to recover.

New investors are often obsessed with the idea that the best
opportunities for a huge payday are low-priced stocks. The
idea of owning tens of thousands of shares can make you
feel like you are in position for a big win. The problem with
this strategy is that there is a reason why the stock price
is depressed - the fundamentals may be depressing.

In addition to poor fundamentals, there is another set of

dynamics that negatively affect low-priced stocks and make
recovery tougher.

The first is the lack of liquidity, or the daily number of shares

bought and sold. Hedge funds, mutual funds, pensions and
other large institutional accounts generally won’t invest in
companies unless they know that they can easily move in
and out of the investment. If it is too difficult to accumulate
the amount of stock they need to make a meaningful invest-
ment without driving the price up, they will pass.

Stocks move higher because there are more buyers than

sellers. One reason (which might appear too obvious
to carry much weight) why a stock price is cheap is that
there is a lack of buyers interested in these companies’
fundamentals. Most people want to buy low and sell
high. Have you ever thought about buying high and sell-
ing higher? For a detailed explanation of how this works,
please go to: http://www.equitytube.com/sepa


If you are comparing apples to apples then your total net return on an
investment has nothing to do with how many shares you own
Trading Cost equal $0.03/share
Investment A Investment B
Symbol ABC XYZ
Price per share $1.25 $197.00
Amount invested $25,000.00 $25,000.00
Shares 20,000 127
Percentage gain 15% 15%
Gross Profit $3,750.00 $ 3,750.00
Cost to sell ($.03/share) $(600.00) $(3.81)
Net Profit $3,150.00 $3,746.19
Assuming the same percentage gain, you make more
money owning higher priced stocks ------> 15.91%

Trading Cost equal $0.06/share
Investment A Investment B
Symbol ABC XYZ
Price per share $1.25 $197.00
Amount invested $25,000.00 $25,000.00
Shares 20,000 127
Percentage gain 15% 15%
Gross Profit $3,750.00 $ 3,750.00
Cost to sell ($.06/share) $(1,200.00) $(7.62)
Net Profit $2,550.00 $3,742.38
Assuming the same percentage gain, you make more
money owning higher priced stocks ------> 31.86%



The stock market has dropped

32% from its October 2007
high. Blindly following the
stock market gurus, who
sometimes resemble carnival
hawkers, is a sure way to lose
money. Their claims may be
unsubstantiated and possibly
exaggerated. Sound financial
advice from proven, estab-
lished investment firms should
provide more consistent
results than any claims made
by these Johnny-come-lately

At any time of the day or night, you can turn on your televi- I implore you to thoroughly investigate any claim before you
sion and see what I am speaking about. These gurus claim arbitrarily relinquish your money.
they made an outrageous return and, for a small fee, so can
you. The infomercials show a lot of colorful graphs inter-
spersed with powerful advertisements assuring you of success
if you buy this trading software. I have even seen some that
claim their software is fully automated.

Claims of stellar past performance may be truthful; after all,

everyone gets lucky sometimes. But past performance is not
a guarantee of future results, especially when a stock market
guru’s success is not readily measurable by an objective third
party. Furthermore, anyone can take multiple huge risks and
have one pay off, which of course might be the only one you
are made aware of. Please, don’t fall for this trap. There is a
better way.

To be successful, you must accept one simple fact: there is

no easy way to make money in the stock market. Soliciting
and obtaining advice is important. I actually encourage you
to do so. I make my living giving financial advice and have
done so for more than twenty years. My rule of thumb is
I would warn against these infomercials and suggest that
simple: if I can’t understand the investment, I don’t make it. if you are just looking to give your money away, then
donate it to a local charity. Your money would benefit
more people more directly and you could actually take a
legitimate tax deduction. In other words, if you subscribe
to these ‘late-night heroes,’ you are likely throwing away
your money.


Getting Discouraged

Investing is like anything

else. The more you do it, the
easier it gets. This shouldn’t
be misconstrued to mean that
the more you do it, the easier
it becomes to make money.
What it does mean is that
the more familiar you are
with the process of invest-
ing, the easier it becomes to
make rational and prudent
decisions. Once you success-
fully navigate your first bear
market, future bear markets
will appear as normal stock
market cycles.

Few people ever become impassioned by investing. The

concept of investing can be overwhelming. Not only
should you have a good understanding of basic invest-
ment concepts, you also need expertise (internal or
external) in portfolio risk management. And as the saying
goes: “this is where the rubber meets the road.”

Even if investing isn’t your cup of tea, you must find the
right partner to work with. Some investors have a larger
appetite for risk than others; some investors are more
cautious and tend to look at a longer investment time
horizon. One thing is for certain, you must deploy a risk-
controlled investment strategy.

I’m sure that many of you reading this are familiar with
the concept of ‘paying your dues.’ Investing is no differ-
ent. There is a substantial time investment that you will
have to commit to. Otherwise, you risk losing your hard-
earned money. Buy the books, talk to the professionals,
but before you try your hand at managing your money, I
recommend that you allow a financial advisor to help you
develop a strategy. There is too much at stake to falsely believe that you can
develop, implement and effectively manage an invest-
ment plan if you have never done it before. There is a lot
to be said for relying on the experience of others. Once
you have a strategy in place, monitoring and managing
that strategy can be a full-time job.


Visit www.equitytube.com for more information

Thank you for coming along on this important journey. I hope that we have stoked your fire and
your investment coals are glowing.

There is a significant learning curve, so dig in and expect your first investment to be the most im-
portant investment you will ever make. Invest your time!

The United States stock markets are among the greatest places in the world to grow capital and
achieve your financial goals, so don’t get discouraged.

I will leave you with a secret that has proven true every time I have shared it. The secret to wealth is
learning to hold on to what you have earned and then grow it.
Tools You
Your Are Invited! PLEASE R.S.V.P.
You have just finished reading Mike’s definitive list of Contact Us:
PLEASE R.S.V.P. twelve investment mistakes and, if you are like most
readers, you are likely wondering what you should
Frontier Financial Advisors
Michael Weiss, Founder
do next. Mike is accustomed to giving advice and, as
44 Wall Street, 10th Floor
you will see here, there is a simple, logical process to
New York, NY 10005
getting started (with no obligation). There are two
options: the first is for qualified investors and the sec- Phone: 646-419-4444
ond is for investors who want to learn more. Please E-mail: info@frontierfa.com
choose one.
OPTION 1: www.equitytube.com
YES, please contact me. Frontier Financial Advisors
(Website) offers financial asset management ser-
vices based on Mark Minervini’s SEPA® methodology
for qualified investors with portfolios in excess of
$1,000,000. To schedule a free/no obligation consul-
tation, and to learn more about our risk-controlled
investment program.


Your Are Invited! PLEASE R.S.V.P.

OPTION 2: do business with us. I’m sure that you can understand
You must establish a baseline. Due to the lack of clar- and appreciate that. If you are ready to move forward,
ity on your statements and number of statements this the due diligence call will be scheduled.
can be a daunting task. We offer a free comprehen-
sive portfolio X-ray that will establish your baseline in Step Four: The due diligence call will last one hour
one easy to understand report. and will be conducted in person or via a live video
appointment. This time is necessary for us to clearly
Step One: Fax your statements to 212-504-3073. lay out a plan for you, and it allows both of us to
Our team will complete the analysis of all your stock establish and build rapport. This rapport is necessary
and mutual fund positions. Your information is safe. because we view all our client relationships in the
Please read our privacy policy. long term. We don’t want to waste your time or ours.

Step Two: Your portfolio will go through an internal Please feel free to call at anytime 646-419-4444
review. After the process is complete, a phone ap-
pointment will be scheduled to discuss our findings.
Be advised that this review is noncommittal and free
of charge.

Step Three: A follow up call will be scheduled to

disucss any additional questions. At this point, if you
like what you hear a final due diligence call will be

I want to emphasize that we do not rely on sales pres-

sure tactics. Our goal is to educate you and let you
decide if a risk-controlled investment strategy is an
appropriate investment choice for you. Ultimately our
objective is to identify those individuals who want to

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 33
There is one simple measure that defines our months. It’s a simple concept: when stocks
success: the quality of the conversations we break down, we sell them quickly. Not only
are having with our clients. While they were does this steadfast rule protect us in down
impressed with our impressive net returns for markets, but it also helps us lock in our
2007, many were struck by how effectively hard-earned profits.
we were able to preserve capital through this
terrible bear market. What does it look like from our vantage
point sitting in 100% cash waiting out a
Our vision is to deliver an actively man- correction? Clarity. While most others are
aged, risk-controlled investment strategy conducting damage control, we are focus-
that capitalizes on trading efficiencies and ing on identifying the new market leaders
focused research to deliver superior returns. that will drive us out of the correction. Mr.
We are comfortable saying, “Mission ac- Minervini’s SEPA® methodology provides us
complished!” In 2007 and 2008, we were with the confidence to weather the inevi-
able to leverage two key components of table storms. Our clients have found this
Mark Minervini’s SEPA® methodology: First, program to be a perfect addition to the
protect capital by going to cash and using long-only, buy and hold products delivered
short positions when appropriate. Second, by the traditional investment houses.
identify new market leaders coming out of
a correction. Our focus remains on providing you with
unique risk-controlled investment opportuni-
The execution of the SEPA® methodology ties that complement a traditional portfolio.
is complex, but the concept is simple: don’t Please don’t hesitate to call our team of pro-
take big losses but do own the best growth fessionals at 646-419-4444, as we look for-
companies the market has to offer. The ward to providing you with the outstanding
commitment to avoid big losses is what service your hard-earned money deserves.
drives us to cash, as we have done five
separate times over the last fourteen

Mark Minervini featured in Stock Market only three down months (the worst, a minus-

Wizards cule 2% loss).

Stock Market Wizards gives you stories, tips and Mark Minervini, who has averaged a 220%
an inside glimpse into today’s vibrant market annual return during the past five years while
and the traders who can ride the bull, battle the keeping his maximum quarterly loss to a frac-
bear and still come out on top. tion of 1%.

After brief but interesting introductions that These are just a few of the traders you’ll meet in
place the subjects’ trading practices into per- Stock Market Wizards’ all-star lineup of market
spective, Jack Schwager, the books author, masters.
coaxes from them penetrating observations on
setting goals, finding opportunities, learning Purchase your copy of Stock Mar-
from mistakes and operating on a day-to-day ket Wizards at Amazon.com.

Schwager gets the answers from phenomenally

successful traders, including:

Michael Lauer, an outspoken fund manager,

who explains why he believes many of the
country’s leading mutual funds are following a
flawed strategy and whose own fund provided
investors with a fifty-fold return in seven years.

Steve Cohen, a modern-day trading legend who

manages billions and who has averaged trading
returns of 90% during the past seven years, with

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 35
Visit EquityTube.com to access our exclusive
videos. Within these videos, you will learn:

• Up-to-date analysis of major market events to take advantage of the biggest opportuni-
and what they mean to you. ties while keeping your money safe.
• The up and coming market opportunities • Upcoming market trends with the potential
that need your attention right now. for huge rewards.
• How to effectively manage your risk profile • And much more!


Dear Investor, The Problem Creates a Business Opportunity

Welcome to Frontier Financial Advisors, a Early in my career, the financial asset man-

registered investment advisor specializing in agement industry frustrated me no end. My
financial asset management. The Investment clients complimented me on my attention to
Advisory platform has many advantages over detail, as well as my ability to identify their
the traditional brokerage platform, and I look needs and ultimately deliver quality service.
forward to sharing these benefits with you However, I received minimal praise for the
over the next several weeks. investment products, because they were un-
successful in delivering consistent investment
A number of years ago, I set out on a mission returns. My investment choices were limited
to build a financial asset management firm to off-the-shelf firm products such as wrap
designed specifically to solve what I believe is accounts, mutual funds, index funds and stock
a problem most high-net-worth investors con- recommendations generated by in-house bro-
tinually experience. This vision was drawn from kerage analysts. Selling investment products
both my twenty years in the financial service tailored to the mass market led to inconsistent
business and proprietary knowledge gained performance of client accounts then, and this
through my experience in the consolidated still remains an all-too-common dilemma
financial reporting industry (see GreenTrak among most investors today.

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 37

• More than 85% of our clients were under-
I conducted an exhaustive research project, performing the market over any given cycle.
and the results of this venture supported my • Most clients were unhappy with the results they
hypothesis that most high-net-worth investors were achieving.
were experiencing similar frustration in the as- • Most clients were generally dissatisfied with the
services rendered.
set management business. My findings led me
• The investors with the best results were using
to co-found GreenTrak, a consolidated financial
highly exclusive - and sometimes inaccess-
reporting firm created to provide investors with
ible - money managers who specialized in the
performance information about their invest- financial asset management business.
ments. GreenTrak aggregated investors’ numer-
ous brokerage statements into one sixteen- Attacking the Problem by Creating
page report that disclosed the results. the Solution
GreenTrak grew to more than 100 employees
and tracked in excess of $25 billion from high- GreenTrak was sold in 2000, and I set out to
net-worth investors and investment profession- leverage my experience and unique industry
als. We tracked hedge fund managers, insti- perspective to build a financial asset manage-
tutional managers, index funds, mutual funds, ment firm that would address and conquer
wrap-account managers, brokers and individual these problems. The firm, based on the simple
stock traders. We tracked it all, and based on premise of true investor satisfaction, would:
this proprietary evaluation, we discovered:


• Establish and maintain relationships with Mark Minervini is One of America’s Top Stock
revered money managers whose investment Traders
decisions would consistently reflect their
expertise, and then introduce them to a select Mark Minervini, by using his proprietary SEPA®
group of high-net-worth clients. methodology, delivers a risk-controlled invest-
• Build an investment platform that would offer ment strategy that has proven to be invalu-
an exclusive community of high-net-worth
able, as we did an incredible job protecting our
investors the chance to invest alongside these
managers without being obliged to meet clients’ capital in a very difficult stock market
their restrictive high-minimum investment environment. I am proud to declare that we are
requirements. quickly becoming a leader in the financial asset
management industry.
Moreover, our financial asset management firm
would strive to provide great service and oper-
As an investment advisory firm, we are com-
ate with absolute integrity, courtesy and profes-
pensated based on management fees. The
management fee is derived from a percentage
As an entrepreneur since the age of thirteen, I of your assets under management. We are fidu-
knew it could be done, and Frontier Financial ciaries and must always prioritize your interest
Advisors is the product of over $1.5 million in- above the firm’s. Furthermore, prior to initiating
vested and many years of development. Today a relationship, we will send you our Form ADV,
we operate on a solid foundation, with our lead which is our legal brochure that provides full
money manager regarded as one of America’s disclosure. Lastly, before any advice is given,
top stock traders.

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 39

we sign an advisory agreement, a contract that 3. We focus on delivering excellent service.

clearly outlines our terms of service.
4. We deliver timely and concise performance
and tax reports.
These policies are typical of Investment Advi-
sory firm’s and exist in stark contrast to those of 5. We operate with unwavering integrity.
the brokerage industry. Our goal is to change Specialization is the art of doing one or a few
your investment experience by providing you things exceptionally well. We pride ourselves
with an opportunity to successfully grow your on executing the most vital tasks to perfection.
capital using Mark Minervini’s risk-controlled This, of course, sounds simple and similar to
investment strategy. some of our competitors’ jargon, but after hav-
ing been an SVP at a few of the large brokerage
Our methodology is straightforward: firms, I know what the competition is offering.
What they are not offering you - strong per-
1. We utilize our knowledge, experience and
network to perpetually seek out experienced formance, steadfast commitment and peace
money managers. of mind through a risk-controlled investment
program - has been the primary focus for creat-
2. We team our clients with these managers, ing Frontier Financial Advisors.
who create investment strategies designed
specifically and individually to leverage their
expertise. Today is the best time to improve your current
financial relationships. Part of the success of


General Electric’s turnaround was Jack Welch’s growth stock sector of the equity markets is the
staunch pledge to terminate marginal employees right place to be.
and continually upgrade GE’s workforce.
It is critical that you have the best financial team
That same pruning process should be employed in place today to position yourself for the next
by all investors: three to five years. Complacency is inexcusable
when it comes to your hard-earned money.
• If your brokerage firm stinks, send them to the
• If your stockbroker’s service light is not on, We welcome the opportunity to fully demonstrate
send him to the garage. our innovation and how we might be a great addi-
• If your mutual funds act like dead fish, throw tion to your current team.
them right back.
• And finally, if you’re not a good stock picker, Sincerely,
limit your self-inflicted pain.
Michael L. Weiss, Founder
We have celebrated 25 years of declining interest Frontier Financial Advisors
rates, which has led to great gains in both bond
prices and portfolios, but this rally is over. The P.S. Our website, www.wallstreetfrontier.com, pro-
real estate market, which has been a great place vides a wealth of information. Of particular value
to grow capital for the past five years, has cooled. is our exclusive EquityTube. Our monthly three-
Money flows to perceived value and new oppor- minute video depicts what has transpired in our
tunity - toward investments that people believe clients’ accounts during the prior thirty days, and I
will demonstrate a significant and stable rate of invite you to take a peek at www.equitytube.com.
return - and due to the recent bear market, the

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 41


Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 43
ABOUT MICHAEL The most important thing to our customers
- and to us - is that we do exactly what we say
Donaldson Lufkin & Jenrette, as well as some of
the largest U.S. accounting firms.
we’re going to do exactly when we say we’re go-
ing to do it. In addition to being involved in his own enter-
prises, Michael has served as senior vice presi-
After two decades in the financial industry, Mi- dent at such established financial institutions as
chael is still innovating in the arena of high-net- PaineWebber, S.G. Cowen & Company and
worth investing. His investment products and CIBC Oppenheimer & Company.
enterprises have included the Reflection Port-
folio, an independently managed discretionary
investment fund program for high-net-worth
individuals that he successfully ran for six years,
and GreenTrak, a groundbreaking financial
performance reporting company that was the
first to offer investors the ability to review their
accounts on a consolidated and individual ac-
count basis. By the time GreenTrak was sold to a
public company, it was monitoring performance
and preparing tax information for more than
$25 billion in assets and counted some of the
best-known financial companies as its clients,
including Merrill Lynch, Chase Bank, UBS and


As CEO of Frontier Financial, Michael continues

to invent alternative strategies for financial asset
management. In choosing to create Frontier
as a small, exclusive firm, Michael has focused
sharply on the needs and concerns of investors,
rather than solely on expanding the amount of
assets under management. Michael is also chief
investment officer of Weiss Capital Group II, LLC,
which is a general partner of two U.S.-based
hedge funds.

When he’s not busy thinking about smarter ap-

proaches to investment, Michael can be found
paying it forward. Michael has had some great 

sports, business and life coaches and believes in
volunteering his time and sharing his experienc-
es to help others. He lives in New York City with
his wife, Leslie, and their goldendoodle, Callie.

NASD Series 24 - General Securities Principal (June 2003)
NASD Series 7 - General Securities Representative (December 1987)
NASD Series 65 - Investment Adviser (February 2005)
NASD Series 63 - Uniform Securities Agent State (December 1987)
Life and Health Insurance License (July 2003)

B.A. Economics, 1986, Union College

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 45
PRIVACY POLICY Frontier Financial Advisors, herein referred to
as FFA, requires that you provide current and
accurate financial and personal information. FFA
to observe FFA’s procedures regarding customer
and consumer privacy will result in discipline
and may lead to termination.
will protect the information you have provided
Sharing Nonpublic Personal and Financial
in a manner that is safe, secure and professional.
FFA and its employees are committed to protect-
ing your privacy and to safeguarding your infor- FFA is committed to the protection and privacy
mation. of its customers’ and consumers’ personal and
financial information. FFA will not share such
Safeguarding Customer Documents information with any affiliated or nonaffiliated
third party except:
We collect nonpublic customer data orally, in
checklists, in forms, in written notations and in • When necessary to complete a transaction in a
documentation as provided to us by our custom- customer account, such as with a clearing firm
ers for evaluation, registration, licensing or or account custodians;
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customer account;
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tomer records is monitored so that only those tative capacity on behalf of a customer;
with approval may access the files. During hours • With rating agencies, persons assessing
when the company is not in operation, the cus- compliance with industry standards, or
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• In connection with a sale or merger of FFA’s
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personal and financial customer information. • To protect against or prevent actual or potential
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share that information in any manner without rules and other applicable legal requirements;
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Frontier Financial Advisors Client Opt-Out cations from www.wallstreetfrontier.com. If
Provisions you’ve registered to receive email communica-
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to service customer accounts or is mandated by
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Individuals who willingly provide contact infor-
Newsletters mation to us by mail, phone or email, through
our website or in any other way in response to
If you wish to subscribe to our email com-
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and services or upcoming events. If you don’t

wish to receive such information, please let us
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44 Wall Street, 10th Floor
New York, NY 10005

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Frontier Financial Advisors is a registered ADV, the Advisory Agreement and all other
investment advisor located at 44 Wall Street, documents provided by the clearing firm.
10th Floor, New York, New York. This informa-
tion is intended only for clients and interested The Minervini Select® Program engages in
investors residing in states and countries in leverage and short sales, which may increase
which Frontier Financial Advisors is qualified the risk of investment loss. You should com-
to conduct investment advisory services or is mit only risk capital to any investment in the
qualified for exemption from exclusion regis- stock market. Capital invested in the Minerv-
tration requirements. Nothing in this presen- ini Select® Program will experience volatility,
tation is intended to provide specific financial which means that if you need to close your
advice to any investor nor is intended to be account at an inopportune time, you may lose
the primary basis for investment decisions. a substantial portion of your investment. The
Minervini Select® Program has only three-plus
Please contact Frontier Financial Advisors at years of operating history. Keep in mind that
646-419-4444 to find out if we can conduct the past performance of any investment is not
advisory business in the state or country where necessarily indicative of future results.
you reside. Any subsequent direct communi-
cation with a prospective client shall be con- The information contained in this document
ducted by a Frontier Financial Advisors repre- may not be reproduced or reorganized. The
sentative who is either registered or qualifies user assumes the entire risk of its use. Fron-
for exemption or exclusion from registration in tier Financial Advisors, LLC, expressly dis-
the state or country where the prospective cli- claims all warranties of originality, merchant-
ent resides. Before investing in any program, ability or fitness for any particular purpose.
you must obtain, read and thoroughly examine This material and any views expressed herein
its disclosure documents, which include Form are provided for informational purposes on an

Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 49
“as is” basis only and should not be construed endorse the information provided. Users who
in any way as an endorsement or inducement gain access to that material are subject to copy-
to invest in any specific program. right and other restrictions on its use imposed
by those providers.
This document does not discuss any advisory
services provided by Frontier Financial Ad-
visors or performance returns by clients of
Frontier Financial Advisors and represents only
Michael Weiss’s personal opinions and view-
points. Frontier Financial Advisors manages its
clients’ accounts by using a variety of invest-
ment techniques and strategies not necessarily
discussed in this book or appropriate for all
types of investors. Any investment program
may be volatile and can involve the loss of
principal. Past performance is no guarantee of
future returns.

Frontier Financial Advisors’ website, emails

and books provide links to websites produced
by other providers, for your convenience. FFA
is not responsible for errors or omissions in that
material and does not necessarily approve of or


Written by: Michael Weiss
Layout and Design: Dion Cini
Market Analysis and Research: Daniel Mendoza
Integration: Faheem Muflahi
Video Production: Phil Petrie

Special Thanks To:

Marc Weiss, Frank Cordovano, Martin Alberti, Joey Lowe,
Dennis Tang, Jessica Cox and John Assaraf

Contact Us:
Frontier Financial Advisors
Michael Weiss, Founder
44 Wall Street, 10th Floor
New York, NY 10005

Phone: 646-419-4444
E-mail: info@frontierfa.com


Frontier Financial Advisors . 44 Wall Street 10th Fl. New York, NY 10005 . 646-419-4444 . www.wallstreetfrontier.com 51
PUBLISHED BY: The Wall Street Institute For Stock Market Professionals

Copyright © 2009 by Michael L. Weiss. All Rights Reserved.


Frontier Financial Advisors

44 Wall St. 10th Floor
New York, NY 10005
Phone: 646-419-4444

The Wall Street Institute For Stock Market Professionals

Wall Street
Money Management Secrets

12 Financial Asset Management Strategies That

Professionals Use To Succeed In Declining Stock Markets

Michael L. Weiss

The Wall Street Institute For Stock Market Professionals

Whenever I read or hear new advice, I
digest it and then consider the source.
Most of the time, it is subjective or
infected with special interest. It is not
easy to be a successful investor. My
journey in the stock market began
more than twenty years ago. Through
repetition, I learned the nuances of in-
vesting, and in this book, my first, I will
reveal to you those things that I know
can make your investing life miserable.
Avoid them, be disciplined and dog-
matic about your investment strategy,
and success will be yours. Michael Weiss is a successful invest-
ment advisor and entrepreneur in
This book is your definitive list of practice for over twenty years. He
is the founder of Frontier Financial
twelve investment mistakes. Minimiz-
Advisors, a registered investment
ing your investing mistakes is similar to
advisory firm specializing in manag-
limiting your losses. It is imperative if ing money based on Mark Minervi-
you are to be successful. ni's SEPA® methodology.