This stock system works for the small investor as well as for investment groups who buy thousands of shares. It’s a simple mathematical system that works exactly the same way every time. There is no system I know of that offers the protection against cheap crooks in expensive suits (CEOs and CFOs) like my FreeStockSystem™. This system forces the investor to take short-term profits. Since the shares held for long-term profits are FREE, loses are confined to potential profit, not investment capital.

The FreeStockSystem™ spread worldwide in less than two years. What really pleases me is the fact that investors are finding ways to personalize it and improve it.

Before we get started, it might be of interest to some investors to know that I don't worry about the long or short term taxes. Give me the opportunity to make money at home on my computer and I'll give the devil his due. As an example, if you buy 100 shares and turn around and sell any part of the 100 shares within 365 days, you will pay the short term gains on the sell price less the purchase price.

Things that add to the benefits of the FreeStockSystem™:

A. High volume.

B. Average to low float.

C. P/E around 10 or above is desirable but not overly important. At least not to me. My goal is to collect Free shares of stocks.

D. A high Short Ratio is not always bad. Shorts trying to cover can drive the price up.

E. I always want to know the 50 & 200-day moving averages. I'll usually buy around the 50 day average.

F. The hedge for ignorance is diversity. I buy in ALL sectors.

G. If a stock and I do not have a history, I most definitely want at least a 20% difference between the current price and the 52 week high. Example: If stock is selling for $1.00 the 52 week high will have to be at least $1.20 for me to buy it.

H. Did you know that there are good stocks below $5 that pay DIVIDENDS? To each his own, but I really enjoy seeing those dividends on my statements. To me, it's just FREE money.

This system is as simple as 1, 2, 3.

1. Stock ABC is selling for $1.00 a share. For this example, let's buy 1,000 shares. That's $1 X 1,000 shares = $1,000 plus commission (I use Scottrade® for two reasons: $7 per transaction & excellent service). Therefore, stock ABC cost us $1,007.00 or $1.07 a share. Commissions are higher on foreign stock, stocks under a dollar, and broker-assisted transactions.

2. Our goal is to sell 900 shares of this stock for the total amount invested, including the buy & sell commissions. I immediately place an "All or None" limit sell order for 900 shares.

3. We now have ABC listed to sell automatically at $1.13.  That's $1,000 for the stock plus a buy commision of $7 and a sell commission of $7. $1014.00 ¸ 900 = $1.13. The moment this stock sells, we have recovered our entire investment plus a few extra dollars of cash profit, and we have 100 shares of ABC “free”. The fastest turnaround time to date has been 35 minutes. Some investors tell me that they buy 3,000 shares and sell 2,700. This system can accommodate the 100 shares buyer just as it can the 100,000 shares buyer. Keep it apples for apples and it will work the same way for both the small and large investor.

An actual buy and sell: I bought 1,000 shares of SWC on 03/18/03 - Total cost $2,612.00 - Sold 900 shares on 03/20/03 for $2,624.92 - Return on investment: One hundred "free" shares of this stock and $12.92 cash.

A perfect example of the types of stocks best suited for my  FreeStockSystem™ is INFS. Volatility is a key factor to consider. The higher the better.

Some of the questions I've been asked include, "What happens if the stock goes down?" and "What are the advantages of the system other than getting 100 shares free?" and "What do you do with the free shares?" The #1 question since posting my FreeStockSystem™, "Why are you sharing this information?"

• If a stock drops 80%, in late-December I sell it and take the write-off.
• This system has several advantages. It allows me to keep a small amount of capital working in many different stock sectors. It also helps develop an in-depth knowledge about a stock's tendencies. I have gotten to know the daily movements of certain stocks and can buy and sell them again and again with confidence.
• I do not lock the free shares away in a chest. If a stock reaches ten times what I paid for it, I'll sell it in hopes of buying it back at a lower price. This limits the upside, but in my opinion, it's like the old saying, "A bird in the hand is worth two in the bush."
• Why am I sharing this system? Because I enjoy doing so.
• There's always some stress associated with investing.

Disclaimer

I'm Bob Miller and I'm not registered as a stock broker or investment advisors in any jurisdiction whatsoever. A person should never invest in any stocks unless they can afford to lose their entire investment. Investing in "stocks" is highly speculative. It's super risky, but I love it.