S.T.O.R.M Stock Picks System Through the proprietary method of the Adam’s Advantage, stock picks are carefully selected through a rigorous formula using the following criteria: S-can and stock selection - From a field of 10,000 possible stock picks in nearly 50 sectors, choices are narrowed down to less than 1% of potential stock picks at a given time. Factors such as volume, price, sentiment, and timing are all taken into account. Elements from both fundamental and technical analysis techniques are utilized. T-rend - With an objective of identifying new trends and breakouts, stocks are selected. A look-back period of 4/4/4 is used: 4 weeks/ 4 months/ 4 years. O-bserve - A key ingredient in the Adam’s Advantage is the relationship of a given stock to both the market as a whole, and the stock within its individual sector. Volume is an important factor as well. R-isk - Through careful analysis, potential losses are always predetermined so risk is measured and minimized. The 1% rule is utilized, which limits investment of an individual stock to 1% or less of total portfolio value. A risk/reward ratio of at least 1.5:1 or better is used to select the best investment opportunities. Portfolio diversification is also utilized with the following guidelines: 8-25 stocks within at least 6-8 sectors No more than 25% of portfolio value in any one industry No more than 15% of total portfolio value in any one stock Minimum of 3-4% of total portfolio value in each security in the portfolio M-onitor - A portfolio is carefully monitored to give the investor key pricing points of a stock. Once an entry or purchase price is determined, a stop-loss price is pinpointed, along with a target price. A formula of profit taking and an exit strategy are key ingredients. Top-Down Approach The Top-Down approach begins with an overall market analysis within a given time frame. From there, varying sectors are analyzed to pinpoint which ones are positioned to outperform the market as a whole. Individual sectors are then broken down to discover which stocks within the sector are poised to turn a profit for investors. Bottom-Up Approach The Bottom-Up Approach begins at the other end of the spectrum. Stocks are chosen based on the individual merit of the stock within a given time frame. A stock may be chosen from a poorly performing sector, but may be doing well on its own. The stocks in this database may differ or overlap with stocks in the Top-Down Approach database.