narrator: this program was made possible in part by lincoln financial group, and by genworth financial, and by wells real estate funds. what investment strategy is right for you? one that makes money? ken: i love bubbles. i love everything about bubbles, cause i make money with bubbles. narrator: and protects it. ken: six pieces of paper have the power to change your life. narrator: ken stern has helped millions

through his winning asset management firm. now he's telling you what you need to know to pounce for alpha wealth. ken stern is also a well respected financial radio host, television news editor and critically acclaimed author. please welcome ken stern. ken: thank you, thank you. i love being here today, we are going to have so much fun, but more then just a motivational speech, we're actually going to get down and dirty and roll up our sleeves and give you action items, techniques, a strategy, a system to take home with you. all designed about your wealth, and your protection and abundance. this is a perfect time for it so i know you're going to love it. but something has been weighing on my mind, it has been confusing me and i know you can help me. it's a grammar question and my team still hasn't reached a consensus in terms of what the true answer is. help me out. tell me the right answer; the yoke of the eggs is white?

or the yoke of the eggs are white? now how many people say the yoke of the eggs is white, yoke of the eggs is white, about half of you. now how many say the yoke of the eggs are white, ah most of you! how can that be if half of you... the yoke of the eggs are white, i think some of you voted twice that was what happened. now you all know you're wrong. you all know that the yoke is yellow! audience: oooohhhhh! ken: we go through life like this. i mean isn't it amazing? we get fast talked and we we just lose sight of what it is that we're trying to accomplish. i think we're doing good, i think we're doing great, just not great enough, because life gets in the way. this chaos, this stuff that's happening, it's gonna happen every day and it's gonna happen every year. that's life baby and it doesn't matter what's happening. we're not saving enough, they're always going to tell us that.

these books are going to tell us that we're not saving enough. you're never going to save enough and if you try, it's like billy joel said your trying to be a straight a student and your not going to be all the time, everyday. it's not fun either and this should be a little bit more fun. and here i am out of the cold, out of the trenches to bring you my story, my system, my strategy, in your living room. because the problem with most people that are feeding you all this stuff, writing all these books and all these ideas and all these techniques. they're wonderful, they're great, i think you should give em to good will. i think it's time to give em to good will. there's too much clutter, there's too much goin on. and where's the specitivity? where's the system. where is, a plus b equals c. everybody loves talking abstracts but are they here in your living room, in your home office, giving you that strategy?

they're not. and that is what i learned in the trenches. i've had the very good fortune of studying people. i've had the very good fortune of studying wealth. two wonderful subjects actually. and what i found is that there are commonalities. what i found is that there are patterns, strategies and predictable patterns that you can follow. so, no more being reactive. no more! this is a proactive strategy, this is a proactive approach. i can't be reactive any more, because as i say, it doesn't matter what happens, life will happen. you're sill gonna have a retirement to deal with. you're still going to have possibly a disability. you're still going to have inflation. and it doesn't matter if you're in a recession, or if the economy is doing great. you know, what's the old saying? a recession is when a neighbor loses a job, a depression is when you lose your job. this is a very personal situation and that's why i talk about a personal system for you and specific to you.

life will happen. the question is, are you going to react to it, look around all the time and say what happened? or are you going to proact and say, i've got it licked, i've got it down, i'm ready. i want you to think back, from 1982 to 2000, we had an unbelievably prosperous period. and it softened us. investments did well, real estate did well, unemployment was low and we built a lot of stuff. that's gone; it's gone for a while. matter of fact i was talking about repetitive patterns, well these patterns, you can actually plot them and you can track em. and after such a great age of prosperity, you have many, many years of chop, of volatility, of up and downs. and the problem is, is everybody is still back to that 1982 to 2000 period. and they're thinking, well i can just buy and hold

and i can build my wealth and i can do it slowly. well you can't, that's gone. matter of fact one of the biggest mistakes people make in life is, especially with investing, is thinking that buy and hold is all you need. matter of fact buy and hold is the wrong strategy. i think that it's going to effect a lot of your negatively. and number two staying the course, staying the course doesn't make sense. if there's a hurricane on the horizon and you're in a boat heading right for it, why would you stay the course? i talked about the age of prosperity, well let's look at that last, you know, the beginning of our decade, lets look at 2000 to middle, end of 2008. we used to talk about this big stock market index called the s and p 500. some of you may have been exposed to it, maybe through your 401k's or your ira's. well if you would have started the decade investing in this s and p 500, you take out inflation,

which is another life mile stone by the way. inflation's here, it's gonna be here for your life, we hadn't had it here for a long time but we have a global economy, we have people on wall street that don't have our best interest at heart, and we have these excesses that are built up. and we're going to need more and more commodities and more and more stuff and more and more services, and we have more people. in fact do you know that the new babies that are being born right now are equaling that of the height of the baby boomers. i mean we're having a lot of babies. that's going to create shortages. these long cycles are very track measurable and manageable, if you have a system. but i don't like this; i don't like you going from the beginning of the decade to almost the end of 2008 losing money. that's the problem. the solution, which i'm very happy to tell you about, is alpha, the solution is the alpha system.

i have never ever before been able to say, here is exactly what to do. here is when to do it. you know what alpha is? alpha is a measure above the base line. everything in your life you have a base, you have a base line. well i want everything in your life to have a positive variance to that, that's called alpha. so, i even say to my, my children, well do you have an alpha with that? are you doing better then the norm? if you're invested in a bench mark, like the standard employees 500, well then that is the bench mark. i wanna do better then that. i want abundance. so i want positive alpha and i believe the only way to have positive alpha is to make sure that you're embracing the cycles, that you're protecting your assets so you don't lose it. one of the biggest reasons why people actually don't create that abundance that they deserve is because they've, they lose what they've built and then i think loving legacy is just all alpha.

because unfortunately we don't take care of that and we need to take care of our house. so what is my system predicated on? it's predicated on first, wealth. build the wealth. and build it because of chaos not despite it. build it because of the uncertainty. zig and zag properly. and how are you gonna do that? the system has to be simple, it has to be proactive, it has to be followed on a monthly basis; an hour or two a month. if i can say, hey this could really set yourself up for some great wealth. are you gonna be willing to commit an hour or two every month? i'll give you all the parameters. i mean are you willing? audience: yeah. ken: yeah! of course! you know if there's a million dollars on the floor how fast are you running? just follow the system and then protect it. like i say, i love talking about alpha protection. i have a family, i have two beautiful daughters. ah i wanna protect it from them i wanna protect from my future son-in-laws. i wanna protect it from everybody.

if they can last 20 years like i say, they're part of the family no problem. but the first 20 years they're part of my alpha protection plan. woman: right. ken: thank you! and then we have loving legacy. than we wanna make sure we have that mark in this world. and that mark is going to be a little different for everybody. when i set up the alpha system i wanted to make sure that you could follow it and that it was tracked and that it was easy and you don't have to subject yourself to undo math and you wanna make sure that you keep it simple and you keep it effective. i wanna show you the magic chart. this is very valuable art. this is something that you wished you had and now you do. so the next time you wanna go spend money on art i want you to make sure that this is on your desk first, that this is on your wall first. this is simple and effective. it's a cycle. cycles are part of our world. we go up, we go way up, we come down we go way down.

and that, my friends is a market. that my friends, is a market. people bid things up to an excess and they drop it down to where it's too cheap and it's a great value. and the market is comprised of herds. and herds are about human nature. and human nature is when people do the wrong thing at the wrong time. and that is the history of the world. and all you're gonna do is you're gonna be self actualized and you're gonna see it. you're gonna be, you're gonna be looking down upon it and you're gonna be loving life. if you could predispose yourself to being profitable in an expansion. to know when the peaks gonna happen and to predispose yourself to be able to pounce down on any bubble that comes up and having a clear measure for that. now you're actually starting to embrace the cycles, embrace the chaos and embrace it all. this idea of one investment strategy in your 401k

or your ira or just your normal assets doesn't work. like i said staying the course doesn't work. a lot of people have lost too much money staying the course. i want you to be a top gun. i want you to pounce on the bubble. and then i want you to be a pig. which is when you need the income back i want you to develop all these pods and sources of income. i call it pounce for income and growth. that's a pig so it's ok. i need things that are easy to remember. remember this is easy, it's predicated on simple systems. so lets talk again about bubbles and strategies and situations and let's talk about the techs. remember technology in 1999 what happened? what happened? everybody made a bunch of money and then it burst. and it went way down. well that's not very good is it? but when that went down and we were in a terrible situation, because i talked about 200 to 2008

and the markets didn't make any money over the last eight years. but somebody made money. as a matter of fact lots of bodies made money. real estate went up, 50 or 100% depending on where you're tracking it, and then it went back down. techs went up 50, 100% and then it went back down. i could figure out just about every major sector and show you this predictable pattern. play the pattern. well the first strategy i wanna talk to you about is being top gun. you are all now top gun alpha wealth advisors. let's think about it, 1999 everybody in this world we are crazed talking about technology, the internet. it changes the world and of course what goes up comes down. like i say it doesn't matter if it's wind power, solar power, energy. it doesn't matter if it's technology, gold. everything that goes up is gonna go up to an excess and it's gonna come down and you're gonna pounce.

in 2001 the market got pounced. the market lost a lot of money. and then when you have two bad years back to back you really get upset. and when you have a decade, when you have eight years that you're dropping you can't recover from that. 2001 we dropped about 13% on the s&p. in 2002 we were more we were over 20%. the question is, let's not try and figure out how smart we are. that's wall streets problem. they think too much testosterone. what they need to figure out, it's true, is what works? what works? let's look at the s&p 500, is a basket of 500 stocks and you see there are 10 sectors within the s&p. and this is so much fun because you can do this with an international index, you can do it with, um, you could do it with size of companies. i'll show you on your computer.

but right now i wanna show you the 10 sectors in the s&p 500. and those 10 sectors are comprised of everything from consumer discretionary, goods and services that you like to buy and sell, that aren't necessities. or consumer staples, things that are a necessity. technology, utilities, energy, materials, financials, you get my drift. so i'm just gonna use the s&p 500 now as our bench mark because i wanna create a positive variance from that or a positive alpha. i wanna know, by going back in time what worked in 2001. i wanna know which sector made money. so, i went to the s&p's website i crunched in and i said show me this date to this date and i found in 2001 there were some sectors that had some up stocks. as a matter of fact 56 stocks that were consumer discretionary stocks actually were up an average of 38%. who would be happy with a 38% return?

information technology 23 stocks up 36%, materials 28 stocks up uh, i could do this for 2002, we could go all day. we could have lots of fun. the thesis is this, the thesis is you aren't going to know where the herd's going. it's unpredictable, could change one a dime. have you ever been on a cattle ranch you'll know this. so what do i want from you? i want you to be a top gun investor. and the theory of top gun is, you take the best performing sector and you buy the two best performing sectors. you own em. and every month you go to your computer and you could do this in just about any web site. you could do this with the s&p or you could go onto amex or you could go to one of the popular search engines like msn or yahoo. and you can say, mirror, mirror on the wall, which sectors had the best performance last month? and it will show you.

buy the best performing sectors and sell them when they ain't. so, if next month you go to it and it's not there any more, sell it. now you have to worry about tax consequences. matter of fact i like this with a 401k because you don't have tax consequences in your 401k. so, instead of predicating the theory on the sectors. do it for the available stocks or funds in what you have in the 401k. and again um, you have to worry about your own risk tolerances and what not. but think about it. let's talk about 2008, it was, you remember 2008? not fun huh? uh uh! financials, bail-outs, banks going out of business left and right. people must have just been horiffic, i mean the mood of this country must have been horrific. this is the financial crisis. this is august of 2008. the august performance of the s&p consumer staple sector was 5%, makes sense.

people like to buy staples, things that you need, you know, you eat it, you drink it, you smoke it, that's a staple. yeah, that was up 5%. health care was up 1.9%, financials were actually, cause it was after such a bad period. so, my point is buy what works. you run that system and if it's not in your monthly for the next month, you get out. take your profits and get out. or if you got into a sector that was going down and you took a monthly loss, so be it. if you follow the system every month, you take your top gun, the two best performing sectors. you do that and do it religiously; then you're going to have a positive variance. at least what i've back tested and historically looked at. i found it to be a very basic system and a very easy system. you could also by the way do this, if you wanted to on an individual basis. but why have the individual stock risk. you're not going to know the next ceo that's indicted. you're not going to know the next problem that's gonna blow up.

sectors seem to capture a lot of the up side without a lot of the down side. and that's what we're trying to do as an investment predator. predators don't want to become prey. we abhor risk. we want simple strategies that are proactive. so, you may say well why isn't everybody doing this? i told you there's too much testosterone. plus they can't, their perspectistives and their strategies require them to do certain things. you don't, you have an advantage. you're an investment predator. that is the first part, again we're gonna do it in three parts. because we need to have alpha wealth at all phases. well top gun is my favorite, because we get to play with it. and we get to get in and we get to go out. but it still doesn't help us in certain periods of chaos. it still doesn't help us through, so we need something that counter balances it. we need something that acts almost to the opposite. and that's what i want to continue talking about. i want to show you how to pounce on a bubble. i think bubbles are so predictable, so easy to spot

and we're gonna find those. so thank you very much, i enjoyed this, and i can't wait for the next section. diane: ken stern pouncing for alpha wealth. you know what ken stern i want to be a top gun, can i be a top gun? ken stern: yes you can! diane: yes i can! ken: yes you can! diane: well you can too, friends. diane bliss and ken stern, but you know what ken, i want to hear more of what you have to say. i, i know we are supposed to be doing a pledge break now, but let's go through the items really quick and get back to your show, how about that? ken: i think these are strange times and i want people to go from good to great, and we're gonna do that with them now. diane: ok, and let's start out with that basic membership, at that basic membership we are going to send you the 5 wishes booklet. it makes all of your wishes be known in a time when perhaps you don't have that voice of your own. the dvd of today's program for a 75 dollar gift, and ken, what's on that bonus material on the dvd? ken: the bonus has the specifics of what people want.

how do i put the money back into my pocket, how do i proliferate it? you follow the system, you'll be great. diane: oh, and speaking of being great, you were great to write this book! ken: thank you. diane: a hardbound book for a pledge at the 120 dollar level. this goes into tremendous detail, and it's really the basis for this whole program. 120 dollars is a great gift to public tv, but i want to be a top gun, i want to know about those sectors, what does it take, a platinum level? ken: yes, the book is amazing because we studied what makes people successful. we found that there are two elements, one is your brain, and unfortunately our brain is put on this earth to help us survive, not necessarily be a great investor. we studied neuro-economics, and we bring it to you in the book. the other problem, though, is how to have a system, with the strategies, with the forms, with a coach, every single month. the book can't give you that but the platinum can. there are three more ingredients that only on public television are you going to have access to. the first and foremost is my p3 workbook.

now this workbook, every single month you're gonna go to a different section, alpha wealth, alpha protection, living legacy, and you're going to build it every month, you're going to take what i tell you to do in there and you're gonna go to the forms, the forms are amazing, and then the discs with the quicken nolo will maker, i'm gonna give you the executive forms, i'm gonna show you how to protect your assets, i'm gonna give you the 6 essential documents, i'm gonna make sure that your kids aren't disinherited, i'm gonna make sure that a second spouse can't disinherit your kids. diane: ken this is awesome, but there is one good part and that is the money club. the money club is only in the platinum package along with the will maker and the p3 workbook. this money club is my direct connection to you once a month, and what's in the money club only, exclusively available only to public tv members with their secret code that comes to you with your pledge. ken: yeah you need the secret code, but what you get when you have that secret code is more than just once a month, you get reports, you get special, if i say ok

it's time to look at a roth, boom, you go and you do it, in addition to that people think wow this is great information but i don't want to do, i do it for you. here's my list, here's what i tell you to do today, it's in the money club, and then i give you a letter once a month to tell you what to do on your calendar and then i give you, i give you a webinar so you actually hear me in you living room to tell you specifically what to do, here's how to keep your system in place, and i'm gonna hold you accountable if you don't because i want only greatness, that's the key. diane: and friends, your greatness, your gift to public television is the key. now ken, let's go back and enjoy more of this wonderful information and then decide what giving level is right for you. whether it's the platinum level at 365 or basic membership or in between. ken: it's the alpha movement and you've got to be a part of it, alphatize diane. diane: ok, and enjoy. i'm gonna be a top gun. ken: yes you are. diane: ok. ken: alright.

ken: a lot of people talk about savings. let's talk about savings. now i, this nation really started this huge, huge era of prosperity and greatness during the 50's when we were saving double digits and we're not doing that anymore. we're in the nation in debt, and if you think that that's not going to bite us you're wrong. now some of you might be great savers and you may say that's not my issue. but i do firmly believe that we need to lead by example. and we need to be savers and we need to teach our children and we need to teach our grandchildren. we need to be a world of savers. it's still not gonna get you there. it's still not gonna get you all the way. but it's a great start. the alpha system is predicated on the fact that we start as a lean mean cash flowing machine. and everybody can have positive cash flow. i like to use the number of 7% but that's

gonna have to go into your personal platform when you do your own monthly meeting to decide. but i don't think value is an option. i don't think it's possible to fail. if you say this is the cash flow that i want, you're there. it's easy to do. what people have this mental blockage with is delineating between needs, wants and desires. so, if you think about it, how many of you have a cell phone? everybody? everybody has a cell phone. you need that cell phone do ya? no. 10 years ago you didn't even have it 15 years ago you didn't have it. that is something that you want. that's something that you like. but if your cash flow is under 7% you turn it off, it's gone, it's done, it might even be somewhat enjoyable for you. everything can be changed when you start looking over your expenses. you know i'm all about money tricks. i love money tricks. i love talking about taxes. most people's eyes roll over when i start talking about taxes. but you realize that's probable your largest fixed budget item.

so why aren't you saying, how do i get my taxes down? well wait a minute, i didn't realize that i could go and sell vitamins on the side, create my own pension plan, deduct that pension plan, actually get maybe more social security for it and maybe have some money left over. and while i'm keeping that money, why don't i put it in a tax free money market until i put it in a pension plan. that's cash flow, honey. that's cash flow. you know what i do for cash flow? it seems like every time i have to go out or i have to go to a birthday party or i go to somebody's house, there's people telling me there's hostess presents, and there's presents for this and there's presents for that, enough! we have too much stuff as it is! matter of fact i make money off storage units that store this stuff. stop it. no more. my kids wanna have a great weekend i'm gonna give em a gift certificate after they get enough stars and we're gonna go to the beach and have a great weekend. you wanna do something for your kids and your grandkids?

offer to babysit their children, offer to, and you know i don't care if you would have done it otherwise. do it now instead. they don't need any more material possessions. we have too much. let's get it back to our 7% cash flow and let's lead by example. when i'm in a period of craziness or a period of chaos, or when i see that there's an opportunity to pounce on which i'm going to show you now. my cash flow builds and it builds and it builds and it drips down into my immediate wealth. now immediate wealth is when i need to pounce on something, i have immediate wealth. i lose my job i pounce on it. i have an issue that needs to happen, i have an operation. i have something going on. i have immediate wealth. and when that gets too big based on my personal platform, you should have about 6 months to one year of immediate wealth you then push it down into your goal wealth. and goal wealth is fun. that's the life mile stones that i was talking about. they're going to happen, there's going to be an issue. be it retirement, be it inflation, be it a crisis, be it a law suit.

you're going to have to have that kind of goal wealth to be ready to combat that and not have it upset your situation. and then once the goal wealth gets too big then you get into the power wealth. that's when you get into the legacy, that's when you get into the strategies that are just gonna grow and mushroom and mushroom and mushroom so you get to go to all of the advanced alpha strategies. so let's talk about some of these other power strategies. wealth is elusive. and it's elusive for several reasons, and i'm absolutely unconvinced that it's a lack of strategy. regardless of the strategy that you deploy, i could say to you, i want you to buy rental real estate and i want you to get at lease a 6% cash flow, don't consider it if it's not. put in a 20% reserve for ti's and improvements and i think you might be successful. and make sure that you can still get the 6% if you build in 6 months of, of vacancy. see what i'm saying, it doesn't matter what the system is.

i don't love that system because i don't like illiquidity and i don't have enough so that i can spread it out into so many rentals that i can feel like i'm diversifying my risk. i like to be able to pounce, get in, take my lunch and get out. but the strategy is what you need that's your central focus. and once you have your strategy you have to remember our brains are great at two things. they're great at surviving and they're great at finding pleasure. what a brain is not good at is investing. because buried deep within is this, this analytical part of your brain that is unfortunately is almost always over ridden with your intuition, which is wrong when it comes to investing. human nature is wrong, that's what makes a market. people going and bidding it up too much and going down. you may see some one on tv that says i think that the next greatest thing is solar power and you think, wow let's get in there.

well that obviously is wrong. you didn't have a basis for that value. and like i say ideal and probabilities, an ideal in repetitive patterns. and there's one repetitive pattern that i consistently am amazed at how accurate it is and that's value. i like value. some people say i'm cheap, i say i'm value oriented. value oriented. when real estate gets above our income levels by a couple of, of a 100%, that's over valued, it will come back. now you may say i could just own it forever. i can't. the market can remain solvent a lot longer then you. and you know you may say this bank is too cheap, this tech is too cheap. well you sit on it for 20 years, i'm out. i'm going somewhere else. and that's why your intuition is not a good character reliance for our alpha wealth system.

you need to be able to over ride that by taking your emotions out and following your simple screens. i believe because of this we're frozen in fear and that's what creates failure. failure is not an option with the alpha wealth system and fear is gone. alpha wealth rules, write these down. number one, have a system. follow it once a month, don't think about it, don't consider it, don't let your emotions. you can watch the news but only for entertainment purposes. 29 days 30 days and then one day you follow your system, you print out your screens and you go. that's the first rule of alpha wealth. the second rule of alpha wealth is to not stay the course. you are dynamic and you must make sure that you are proactive and not reactive. and when the markets are changing, so are you. you're not changing your system, you're just making sure that you're not staying the course and doing what so many people said to do for so long and have lost so much money doing it, and that's buy and hold forever.

that doesn't make wealth i think in this environment and it surely doesn't make wealth during chaos. so for that, i'm gonna talk to you about chaos cause it's here to stay. and it's about bubble pouncing. i love bubbles. i love everything about bubbles cause i make money with bubbles. and everything becomes a bubble at some point. everything. i'm wearing wide ties again and listening to country music! everything's a bubble. in 1999, we were crazed in this world for technology and technology investments. if you said, "dot com," if i changed my name to ken stern dot com, my stock would have gone up that day because of investment psyche which is wrong and we've said that it's wrong. and what goes up must come down. why aren't you playing that? why aren't you making money with that?

here's how. let's look at technology in 2000. see what happened? it goes up, it goes down. and back up and back down again. that's the cycle that i said is the one constant that you can rely on. now you see this little line here? that's my secret sauce, that's my indicator. and my secret sauce is based on a couple of things: when the economy is too good, when people are too happy. when people are too happy and valuation gets too expensive, the bubble's ready to pop. the bubble's ready to pop. now, how do you track that? how do you find those indicators? let me make it real simple to you because it's all reflected in the earnings, it's all reflected in the earnings. and when something, like i was saying about real estate, goes too high compared to your earnings, to your income, it will come down.

that is the one constant that i've seen throughout history. well here is the earnings of technology and i did it from 1996 to 2003. we had top gun here, it was a top sector. we were doing great, we were doing fine. all of the sudden it crossed its earnings line. now i'm getting nervous. now i'm saying, uh oh, i think we're starting to hit bubble territory. is it just technology? no, choose what you want. not too long ago everybody said oil's going to $500 a barrel. well, that's an impossibility. i could rationalize it to you now, but econ 101 says when something becomes too profitable, it won't anymore. they're gonna either have competition or it's gonna be too expensive and it won't be. that's econ. but you don't know that in the moment. you say, oh my gosh, we're not making any more energy. well, look it, all you have to remember is that it will come back to the norm. you could do it, remember when housing was so hot?

materials would have to be hot. well, we're gonna have to build houses forever. how are all these people gonna fill all these houses? i mean, in hindsight we can laugh at these bubbles but when they're happening it doesn't matter if it's tulips in holland, it doesn't matter if it's a tech wreck, it doesn't matter if it's swamp lamp in florida right before as a prelude to the great depression, it doesn't matter if it's real estate in the early part of this decade. bubbles burst and they burst based on valuation. now you're thinking, how, ken? what are you saying to me? what i'm saying it to keep it simple, honey. go to your computer, go to your computer. print a screen. what i do for my screen is i look for extremes, i look for big, old fashioned extremes cause i miss a lot of bubbles. i only wanna take the ones that i am absolutely sure and convinced. i don't wanna think, is energy a bubble? is solar a bubble? looks good, makes sense. i do a simple screen and again, go to your favorite website.

there are so many screeners now and you can deal with an individual stock. it's a little bit risky, very risky, or you could do it with sectors. you could buy into investments that bet a certain sector is gonna go down. so you don't have to have that individual stock risk. again, investment predators don't wanna be prey. we don't like risk. so if you're at your computer and you're looking at a screen, and i don't wanna favor any website, msn, yahoo, s&p, amex, stock screener, i mean, there's so many ways to play this. these are extremes to me. what i find is when a company has continuing earning surprises, even if it's an expensive and high valued company, it still tends to stay expensive. and i don't want something that's gonna stay expensive. i wanna see a company that's reducing its earnings estimates or analysts that follow it

are reducing it and all you need to do is plug that into it. i said here i want less than or equal to zero in terms of recent quarter earnings surprises. and then i said price to sales. there's been a lot of research done on this and price to sales is a measure of, you know, for example, if i had a liquor store and that liquor store had a million dollars of sales last year. not earnings, but sales, and you were willing to buy that liquor store for a million bucks, that's a million dollars, it's a million dollars of revenue, a million dollar sale price, it's one-time sales. you pay one-time sales. well, wall street contracts stocks the same way. well, my feeling is, what are we trying to do? we're trying to make money. i don't care that there's value, i don't care that everybody thinks this is happening. my screen tells me what to do. and if the price to sales ratio is greater than or equal to three, you know, three times the sales or above, that historically seems to me the beginning of a bubble.

most stocks with higher price to sales of three don't make it. you might say, well, it doesn't have earnings, it doesn't have, then don't buy it. you don't need to be in everywhere at every place, that's why you never have to worry when your buddy comes up to you at a party to your friend comes up to you and say, hey, did you buy this, did you? no, it's on my screen. all i do and all i think about is on my screen. earnings growth year to date, i want it to be less then zero. i don't want it to have earnings, market capitalization, i want it to be at least a billion dollars and the reason i wanted a billion dollars is i wanted to make sure that it's being tracked and that it's up so much that only a few people can't manipulate it. then i look and i take, i take the screen and i find out which sector had the most names in the screen. which sector had the most names in the screen and i would buy that or i would sell that. isn't that interesting? isn't that a lot of fun? you don't have to think about it.

that's very powerful. that's very, very good, so if you're back into middle 2008, i gotta tell you, being, being a money guy, you know, i look at this stuff all day long, and there were a few deep and dark moments midway through 2008 after, say, financials and all these banks went out of business and it was horrific and we had these problems. i'm thinking, how much cheaper can it go? this has gotta be a pouncing opportunity. actually it came up on my bubble pounce screen as still going down further. and then we all saw what happened. the wheels came off and it absolutely crashed. follow the screens follow the system. it's very powerful. that is a bubble pounce. interesting. what you just learned is what call an encore elated strategy. on wall street, some people call that hedging.

you just did what they always like to refer to because they're insulting our intelligence by saying, well that's a very complicated strategy. you just hedged. you have a hedge in your portfolio. how powerful is that? you're a top gun, you're with the leader, you're getting out before you get pounced and then you go and you pounce. done. you've got the system you are in power. you are a lean, mean, cash flowing machine. diane: we've got some pretty good ideas as to when to pounce on the bubble. ken: you've got it. diane: and we've got to use the system, ken. that system is the key to all of this working on a regular, continuing basis. just like your gift is the key to this station, working for public television. ken: diane, i'm done, i am done. people want greatness, why do we not have this greatness? we have studied; we have figured it out,

and it's two main ingredients. first and foremost, we have to train our brain. our brain is predisposed to do the wrong thing at the wrong time because it's put us on this earth to survive. that may be countercyclical to what you want to do for growing and protecting your wealth and to building your legacy. i want you to follow a system, and that's the second thing. once a month you're going to follow this system. this system is amazing because unlike a lot of strategies that give you this abstract, motivational kind of information, this is inspirational because you are going to do it every single month, you don't have to think about the math, you don't have to think about oh my goodness am i doing the right thing, am i biting my nails, uh don't bite my nails. what i want to happen is for you to go to the money club, get my webinar, once a month i inundate you with your calendar of information, i'm going to inundate you with a letter and i'm going to keep you on course. if you want alpha wealth, if you want alpha protection, and you want that legacy, that living legacy

so that people know what you lived for, why you were here, what its all about, then i'm going to train your brain and i'm gonna give you a system and you are going to be great. diane: well, i have had personal experience of working through these materials friends, and they make a huge difference, and you're getting ready to work, ken. ken: i'm working, i'm ready. diane: we're gonna keep on working with ken stern, but right now take advantage of the opportunity to reach for your phone, and that platinum package at 365 dollars is an incredible array of information, not only that, but being on the money club in your own private website just for public television viewers is going to give you the actual results of running the various screeners. you don't have to do the work, for public television viewers only. ken: that's right. diane: ken has done the work for you. now reach for your phone and make a pledge. dan: ken stern describes his alpha wealth system as how far above the baseline can you be. what are those extra tools that will give you that edge

that will make you make your investments grow above the baseline? well, that is what you really get when you go for that platinum level, you get additional tools, beyond the basics of the book, beyond the basics of the dvd and the 5 wishes, you then get the additional tools that you are really going to need, such as p3, the power of three, this is the book that guides you through those meetings that you are going to have each month, with yourself, with your family as you, as you see where exactly you need to adjust your portfolio, what you need to do step by step. you will first go to the money club, and you'll go online and get all the information you need through the money club letter, you will also be getting the market watch quarterly report with the information on rebalancing your portfolio, that monthly webinar that will talk about assets protection and stock strategies, and this whole idea of pouncing on opportunities when they come along when you get that early warning of them. there's the financial calculators that are a part of the money club as well, all of these are items that you get additionally, only when you go to that 365 dollar platinum level.

and then there's also the special situation report that you get as well because through the year unexpected things come along; they say it's not what life does to you, what are you going to do about it? well if you're going to be prepared by being at that platinum level you will have a step ahead and you will achieve that alpha level of above the baseline results and how great that is for you. call us right now. diane: ken the thing i like about this platinum package is that yes i get the software and i get your book and i get the dvd and i, i get the 5 wishes workbook and i get the pounce 3 guidebook, but that money club. ken: yes. diane: it's all, i don't lose touch with you, you talk to me through a webinar each and every month on the latest, and it's not past information, it's current data that you give me. ken: only with the password. diane: what do you mean password? ken: here with the key card, this is your money club card. diane: ok i see an access code that's only for ptv members. ken: that's right. diane: so this a unique code just for me? ken: let me, it's just for you.

let me tell you what i want. diane: awesome. ken: the strategy is to give you more time, to allow you to enjoy your life, allow you to go from good to great. and how do you do this? you do this by following a system, and i give you a monthly system, i to the calendar, do what the calendar says and you proliferate your wealth, your protection, and your legacy. it's amazing. diane: we are going to continue with more of this dynamic information, but you make it all possible with your very generous gift to public television. if we've heard from you thank you, you will be the richer for it and so will we. make that pledge. ken: so what is my system predicated on? it's predicated on first, wealth. build the wealth. and build it because of chaos not despite it. and then protect it. and then we have the loving legacy. narrator: the step by step method takes the guess work out of your investments. with your 120 dollar pledge to this station, you'll receive the pounce for alpha wealth book with our thanks.

the book outlines ken stern's principles for pouncing for income and growth, pouncing on the bubble and more. ken: i love bubbles. i love everything about bubbles because i make money with bubbles. narrator: become a proactive viewer of public television and your investments with a 120 dollar gift of support. call now. diane: ken, the traditional advice has been if you get a 401k or an ira just invest and sit on it. is that what we should be doing? ken: well it wouldn't have worked for the last 8 years and we are in a long term volatile market and i am not a buy and hold type of a person. if you have an ira or you have a 401k, listen to me right now. first of all the account value may be down. i want you to find out, it's in the workbook, and there's a roth calculator, to see if are able to convert it to a roth ira or a roth 401k. not only can you be converting at a lower amount

so that you will be paying lower taxes, but that can grow tax free forever more. and if you go through the calculator, it's very simple takes only about 5 minutes, and you see that you qualify for the roth conversion, that is a huge, huge potential tax savings. also, instead of buy and hold, i want you to consider my top gun strategy, you're going to love this, its so simple, you are going to take the best performing sectors inside the 401k, you're going to look at it every month or every quarter, i give you a different choice depending on where you're at, and you take the top one and you cycle it. no taxes when you do cycling in your ira or your 401k, and you stay with the top gun strategy; i think you're going to love it during volatile times, it's amazing diane. diane: well even during stable times, ken, you identify because people have the tools through this platinum package. what sectors are hot? ken: yes. diane: if technology is hot right now, or consumer staples, or whatever it might be, and you actually charted for us the patterns. ken: buy and hold, no more. diane: right, action.

action from you right now by calling in a pledge at the basic membership or at that platinum package where you get it all from ken. call now. narrator: this program is made possible in part by lincoln financial group, and by genworth financial, and by wells real estate funds. ken stern: what an amazing journey. i mean, in just a little bit of time you have now empowered yourselves with a system, a system that you can do once a month and you take all the funny business that goes on over that 29, 30 day period and you set it aside. you just have to focus on being proactive. that's alpha wealth, it's simple, it's proactive,

and it works. but it only works if you make sure you take care of the, the life milestones before they happen because if you don't, you're not gonna have alpha protection. and without alpha protection, you don't have a loving legacy and you don't have a pouncing present. the pouncing present consists of three documents. the moral will, the letter of instruction and document locator, and the five wishes. and it can really all be put into this binder and ready to be acted upon if and when the situation occurs or after a passing. the five wishes is wonderful, i mean, the five wishes you get to go in and you talk about this is how i want to be cared for, this is what i want to happen if i get sick, here's what i don't want to happen. these are really personal discussion points that really aren't found in a legal document like power of attorney. it's your personal views, it's your personal wishes. you could expand it to personal gifts. i love my dad's leroy neiman paintings and his watch, i hope it doesn't go to my brother,

so i hope that he puts that into the five wishes and makes that a wish because i think my brother would honor his wish. i don't think he's gonna write it into his estate planning documents. my daughters and i went to visit a dear friend of ours, a lady that lost her husband to cancer earlier this year. and she said, ken, i have something to show you. what is it? she gave me this booklet and i started reading it and it affected me so much. i was crying. my daughters didn't know what was going on, they thought something was wrong. and i was reading the very first section of her pouncing present. it's called a moral will and it's not something any attorney can write. and she took the monthly planner, she took her first month and she wrote down the story of her life. where she was born, about her parents, and she wrote it down. and then she went through and she started finishing and went through the moral will, went through and

talked about how she met her husband, what they learned in life, what was important to them. and then i started getting to the other sections. the letters her children wrote her and friends wrote her, not just at the funeral and after the funeral, but throughout her life. they went on trips with grandchildren and children and she saved some of these pictures and she made just a couple of notes once a month during her meeting with herself, she made some notes about it and kind of wrote a little letter to each one of the children and grandchildren about what she remembered about the trip or the graduation or something special that they did. report cards. things that, if i gave it to you as i went through my life, it would only be somewhat of a novelty. but as a pouncing present after a passing? this is good stuff. this is good stuff. we're gonna talk this entire period about

6 essential documents and you're going to have on your quarterly planner a system so that every single month you're gonna lick another one of these documents. six months, six documents, you're gonna lick every single one. you don't have to think about it, you just go to your planner, you see what you have to do that moment and you go. you don't have to be a clever scrapbooker. it is basic down and dirty, but oh, the difference that it makes in terms of protection and the mark that you leave on this world, which i said, is really the good stuff as kenny chesney would say. this is the good stuff. and let me now segway from the pouncing present to asset protection. when i make a statement that six documents, six pieces of paper have the power to change your life, i don't take that lightly and i hope you don't either. alpha wealth and alpha protection is all about simplicity and strategy. the only thing that can deviate from what

i believe is success, because in my world failure is not an option; in my world you're no longer frozen in fear. the only thing that can deviate is user error. and that is why you must, you must, you must set a day every month, i like doing it on the 29th of every month, and i go over what i have to do that month. and when i talk about six essential documents, you can accomplish that by a document a month for six months. you're gonna start in june, finish in december, and then repeat it next year by going through and reviewing how current they are. and you may have different documents, you may have similar documents. these are the essential documents to start with. i recommend that you consult with a professional, with an attorney, you could do a lot of this on your computer. many websites are powerful and have information available to you, and talk to your friends and people

that are learned in this field. i start with the living trust. the living trust has become a very popular document, and i say this as a layman and in no way is this a legal conclusion or a legal basis. what i like though about the concept of having an estate plan is control. some people have accused me of being a control freak and that's fine. i like to have control and i'm happy and i'm willing to admit it. when i have a trust, i don't own my assets. i give them to my trust. and guess who's in charge, me. me. and guess what happens if i get sick. i already have appointed who's in charge. and now what's best is when i'm incapacitated, which i was just recently through my operation, i was able to know that somebody had my back. that somebody was planning on my behalf so that they were doing my monthly meeting, they were doing

my pounce systems, they had my alpha. that's easy. that's a monthly meeting. the trust, you could appoint the beneficiaries, you get to appoint who's in charge. now my beneficiaries may be different then yours. unless you want to put my name on your trust. but how they get it is where we need to make a conclusion. here's a homework assignment for you right now. i want you to go and i want you to find all of the places that you have a beneficiary, all of the place that you have assets. it could be iras, it could be insurance, it could be insurance through your credit card, social security, 401k, and i want you to figure out if something happened to you, what you would want to happen in your behalf. in my documents, i want to make sure that nobody gets a free ticket just because i'm sick or i die.

they're not winning the lottery cause i die. but i do want it to enable my family's lives. so if something happens i want to make sure that if they need it for medical or education, you bet. if they want to buy a house and they can come up with funds, i'll match. why not? a will is a very important document as well. a will is a document that an attorney will want you to have to be able to make other decisions. a will, for example, some of you have children and grandchildren in here. some of you have never even appointed a guardian for these minor children. do you know how many children became wards of the state after catastrophic events such as 9/11? there wasn't even death certificates. who's the guardian? parents and grandparents fighting cross-country who's going to care for the child?

this isn't a religious affiliation, this is a legal document. that's why do much of this is important. and then we start getting into powers of attorney. as a layman, as just someone that is learned in the financial world, i can't imagine going through life without the power of attorney. it, to me, is, doesn't compute. it doesn't make sense. it's a basic document; it's something you can get through an attorney for, i think, a very reasonable price, or you could probably find one online to print out. but what it does is immeasurable. my friend calls me up and he says to me, this is absolutely almost verbatim true, he says to me, my dad went to china to work. they found him in his hotel room comatose. my friend's a surgeon. he said, i need to get him back to the states and i need to get him back here fast. i have to care for him, i have to get my team on him.

okay, do it. how do i do it? what do you mean, how do you do it? i thought this was like a, you know, a movie. how do you do it? i don't know, how do you do it? well, he said, i don't have access. and it finally dawned on me and i said, you don't have power of attorney and they're not recognizing you. he said, even if i did, i don't know where the papers are. and it just shocked me, i mean, here everything that i do in life, all of my documents, all of my document locator, my letter of instruction, this is it and one of my best friends doesn't even have it. the shoemakers kid doesn't have shoes. that is not what i set out to do. this is not what i wanted to do in life. you go get the power of attorney and you make sure you have the right people on as your power of attorney so if that were to happen, somebody can get into the financials, someone can pay for that man to get back to the states, someone can say yes or no to an operation, someone can get into the finances and still implement your alpha system.

and you're thinking, well, how are they gonna know that? because one of the most important steps that you take in the pounce present is to have a family meeting. relationships fail, so i've heard, because of poor communication. how do you go through life working as hard as you do, so close to greatness and not communicate to the people that are important to you to say, hey, listen, if something happens to me, this is, this is it. this is my letter to you, this is a letter of instruction. here's who you call, here's where the papers are, here's the steps to take. document locator, listing it all out, do you really want the state to be one of your beneficiary's? because you know that there is stuff that other people don't know that you have. in unclaimed bank accounts, in investments