Sure, there were revelations back in ’99, as the acolytes of the "Depression of 1999" found out at first hand just why prophets aren’t recognized in their own time. But it was in early 2000 that the gloom-and-doom prognosticators found themselves sitting on the smoldering ruins of their ideologies.

Crushed by the non-occurrence of the Y2K apocalypse and worn down by forecasting market Arma-
geddon and depression since the First Bush Era, many of the perennial bears among the financial advisers abandoned the intricate philosophical artifices they had nurtured for years like so much rare Camembert. And, for the most part, turned themselves into instant technology gurus.

In the Age of Opportunity, it’s the opportunists who stand a chance of walking out with their profits intact. But, to be successful, opportunism in turbulent stock markets requires self-control, decisiveness, risk management, and, most of all, the rational avoidance of emotional attachments.

Last February in this column, I recommended that you closely observe a -20% trailing stop on all your Taipan positions. To Taipan readers of long standing, this advice was nothing new or special... but in fact part of our overall strategic positioning.

The difference between heeding the warning and carrying on as before was made dramatically evident in what the Taipan picks were able to do for you in 2000.

Had you strictly observed a -20% trailing stop on all positions at the original date of recommendation... meaning, if you had rigorously taken profits (or stopped out losses) at 20% off the post-recommendation highs (or, conversely, at 20% below your entry price), you could have locked in average gains such as

• 128% gains on Christian DeHaemer’s open positions¹

• 177% on Brian Hicks’s Microcaps Portfolio²

• 93% gains on Briton Ryle’s 2000 picks

• 341% gains on Siu-Yee Ng’s IPO recommendations³

But so much for carryover positions. Gains and losses that occurred in the 2000 calendar year (and for which we determined the entry price of open pre-2000 recommendations on the first trading day of 2000) illustrate the importance of stop-loss discipline.

Because if you instituted as little as a -20% stop-loss provision on your Year 2000 entry prices, average gains on the portfolios of our five editors would have amounted to 26.2% for the calendar year.

If you hung on to every open position to the bitter end without stop-loss protection... followed every IPO, every tech stock along its upward and downward trajectory, you only averaged a total of 5.6% average gains between January 1 and December 31, 2000.

These are the criteria we apply to our track record:

1. Buy and sell dates: Unless marked otherwise, buy and sell dates are determined by the publication date. Throughout 2000, we assumed the publication date to be 3 days after the U.S. issue was mailed. Which means the date on which the majority of our subscribers (based on USPS distribution statistics) would have received the issue in the mail.

2. Prices and dividends: Any gains and losses reported in this overview apply only to the time period between January 1 and December 31, 2000. For recommendations and open positions carried over from previous years, we have taken the first trading day in 2000 as our entry level, thus providing an overview of performance in the past calendar year only.

As I mentioned above, portfolio tracking requires generalizations. To arrive at a meaningful workup of the numbers and "average gains," we have to make certain assumptions. Such as that the hypothetical Taipan member invested an equal amount of money into each and every stock recommended. And that each and every Taipan member was able to buy the stock at exactly the publication date level.

Taipan considers itself a smorgasbord of profitable investment ideas for independent individuals. Your individual decision to take us up on some recommendations and not on others can result in drastic discrepancies between your own portfolio tally and our general overview.