Special Report comments from Marty Chenard, President of StockTiming.com:
It will take you less than 10 minutes to read this Report and it will forever change how you invest in the stock market, and it will dramatically improve your success and profits forever. Millions of people never even beat the stock market averages, and the few that know what I am about to teach have the power to beat the S&P 500 by 200% to 300%.

*** SPECIAL report ***

How Pareto's Principle and the Institutional C-Factor can produce profits that can exceed the S&P 500 by 200% to 300%, and give you a higher margin of safety at the same time.

Your first thoughts might be, that this is impossible ... or, Only the large billion dollar Institutional Investors can do it, ... or, Only the privileged few with insider information can do it. NONE of these statements are true, and if you learn what I am about to teach you, your stock market investing results will skyrocket.

Key #1: Pareto's Principle applied to Investing.

Pareto's Principle? What's that?

Pareto's 80/20 Rule, also known as Pareto's Principle is a strategy that you can use to beat the S&P 500 by twice its annual returns. (For those unfamiliar with it, Pareto's Principle states that 80% of results, outputs, or rewards are generated from only 20% of the causing inputs and efforts.) For those who want to study the principle further, I offer these links:

1. http://www.randomhouse.com/doubleday/currency/catalog/display.pperl?isbn=9780385491747
2. http://www.clickz.com/showPage.html?page=988291
3. http://www.wizardzofwealth.com/wealth_pareto_principle_80_20_rule.php and,
4. http://en.wikipedia.org/wiki/Pareto_distribution

Real life examples of Pareto's Principle where 20% of a phenomena are responsible for 80% of the impact or results:

	% of Group		% of Total
World Energy Consumption:	20%	of population uses	80% of all energy.
Poorest Health in U.S. Population:	20%	is responsible for	80% of all health care expenditures
IBM Study:	20%	of operating code uses	80% of a computer's total run time.
Sales force productivity:	20%	of a sales force produces	80% of all sales.
Stock Market Profits:	20%	of all Stocks produce	80% of all profits

How can Pareto's Principle teach me how to make record breaking profits with less risk?

According to Pareto's Principle you should only be investing in the best 20% of any group of stocks. The most important message may well be in what happens with the other 80% of the stocks as seen below:

The Top 20% of Stocks in a group:	Generates 80% of the investment profits.
The remaining 80% of the group:	Generates only 20% of the investment profits.

What does this mean about your investing choices?

It means that if you are trying to make big profits by choosing any of the lower 80% stocks, the odds are against you and the best you will do is to have poor to mediocre results or even losses.

Some may offer the weak excuse that they are "diversifying" by choosing stocks in the lowest 80%. Beneficial diversification never comes from choosing stocks that are not as good as those among the top 20% group.

* The top 20% of a group's stocks have the characteristics of: Solid trends of increased quarterly earnings, growing market share and improving margins.
* The lowest 80% have the characteristics of: Stocks that are in distribution, have poor trading liquidity, decreasing market share, and troubled earnings.

At first glance, this all sounds easy to do, but consider this ... Using Pareto's Principle means that out of 8,000+ stocks, there are only about 1,600 that are mostly responsible for the market reaching their positive yearly returns. How in the world can you find the time to find and track 1,600 stocks?

The answer is: "Go to a smaller universe". The New York Stock Exchange has 3,567 stocks, so 20% would be only be 713 stocks. For the Russell 2000, 20% would be just 400 stocks.

Later, I'll tell about a special way we found to reduce the group universe to 66 stocks where the top 20% (13 stocks) had a return of 42.9% last year.

Key #2: How do you find which stocks are one of the top 20% stocks?

There are many sources out there that allow you do to searches on fundamental data to narrow the list down. It could be from your online stock broker, or from a website like www.barchart.com. Let's assume we were using barchart.com. Their paid subscribers have the ability to do searches on a large number of criteria. Some of my favorites on a barchart.com search are:

The Number of Institutional Share Holders
The Percentage of Inst. Share Holders, %
The 12 Month E.P.S. Change, %
The 5 Year Revenue Growth, %
The 5 Year E.P.S. Growth, % ... and,
The 5 Year Dividend Growth, %

Let's say that you did such a search on barchart.com for the New York Stock Exchange, and sorted the results by the largest percentage of "5 year Revenue Growth" rates.

Here is what the results would look like:

# of Stocks	% of Group	5 Year Revenue Growth
3567	100%	-- Starting universe --
1465	41%	0% to 4.99% Revenue Growth rates
1158	32%	5% to 9.99% Revenue Growth rates.
758	21%	Revenue Growth rates above 10%

Now, your have just eliminated 79% of the stocks in the New York Stock Exchange that you should not even consider.

Obviously, I can't give you the names of the stocks that appeared in the top 21% because that would be dishonest as we do not own barchart.com. But ... there is nothing prohibiting you from doing the same searching process.

*** If this is all you get from this Special Report it will make a world of difference in your investing results.

Key #3: If you want to take it a step further ...

The first two keys will undoubtedly make you a lot more money, with much less risk. But, there is still a lot of work and know-how necessary to taking this to even higher levels. Work and time go together, and for some, there is not enough time to do this kind of work every day. We spend 20+ hours a week doing this kind of analysis and have taken Pareto's Principle to the next highest level, ... so you may want to consider letting us do all the hard work and simply becoming one of our paid subscribers. Every Thursday is devoted to a C-Factor analysis and update on our paid subscriber website.

Finding the "Best of the Best" stocks to invest in.

One of our daily mandates, is to provide our subscribers information on what the big Institutional Investors are doing. These are the truly big investors that collectively have trillions of dollars in the market. In fact, they are responsible for over 50% of the trading volume in the market, so they control much of what happens simply by the power of "where they direct their money".

Last year, we noticed a very critical piece of information that determined which stocks Institutions were making big commitments on. When stocks had this special characteristic, the biggest Institutional Investors bought huge amounts of these stocks throughout the year.

During the first week of January this year, we did a study based on this critical data which we call the C-Factor. The study covered the movement of 75 stocks from December 28th. 2005 to December 29th. 2006 ... a one year period. During that time, 66 stocks retained a C-Factor rating high enough to remain in the group. (The C-Factor is a proprietary, Institutional Data Analysis that is not found anywhere else in the investing world.)

The key question you need the answer to, is "how did this key group of stocks perform during that time"?

This is how the C-Factor stocks performed relative to the highest C-Factor:

* The top 10 stocks, or 15% of the group had a return of 47.1% for the one year period. They all had positive C-Factor ratings above 20.
* The next 23 stocks, or 35% of the group had a return of 18.8% for the one year period. They all had positive C-Factors between 1 and 19.
* The next 33 stocks, or 50% of the group had a loss of -0.98% for the one year period. They all had Negative C-Factors below 0.

If you want to use strict 80/20 Pareto measurements, then these were the numbers:

# of Stocks	% of Group	1 Year Profit
13	20%	42.90%
53	80%	7.30%

Chart 1, below shows the yearly gains or losses for each of the top 66 Institutional stocks that we followed based on their C-Factor ratings.

After looking at the chart, it is obvious that the top 10 stocks were the big winners, but how would you know which 10 stocks out of 66 were going to be the best of the group?

Click to open larger image in new window.

How would you know that you had an ideal Pareto's Principle group when you were done?

The answer easily comes from our C-Factor ratings in the Chart 2.

Note that the C-Factor numbers for each stock range from approximately 50 to a minus -37. What should immediately get your attention is the nearly perfect, descending slope from the high end to the low end of C-Factor ratings.

That is the C-Factor's secret for having a very small, manageable group of 66 stocks that still have the characteristics for a perfect fit using Pareto's Principle.

The beauty of the C-Factor, is that it has a direct correlation with which stocks will be the most profitable. Stocks with C-Factor ratings over 20 enjoyed a superior return on investment.

Click to open larger image in new wimdow.

The uniqueness of the Institutional C-Factor stocks:

What is so special about this group of C- Factor stocks that allows you to have a manageable list of 66 stocks to deal with?

First, I have expanded the list to the top 75 Institutional "core holdings" so that we will have more opportunities to chose from based on C-Factor ratings.

Second, these are the "best of the best" stocks that Institutions have selected after spending millions of dollars on research.

* Research that tells them which stocks are growing fast enough to have a sales backlog problem.
* Which stocks have steady increases in quarterly sales, increasing margins, and expanding market share.
* Which stocks don't depend on U.S. sales, and instead, often have 40%+ of their sales coming from the fastest growing
international markets ... such as China and India. These same stocks benefit from a falling Dollar.

Third, there is a secret to investing in these stocks. The list of stocks move in a cyclical pattern every year. The key in knowing which of the 75 stocks will be the next 10 most profitable is "in the trend of the C-Factor". Once a C-Factor stock reaches a rating over 30 or more, Institutions start to have too much exposure in them, so they slowly start to sell them and then they re-invest in stocks with lower C-Factor ratings.

*** Every Thursday we be posting the trend change on which C-Factor rating stocks are moving towards our goal of a C-Factor rating of 20+ by the end of the year.

Fourth, a big advantage of C-Factor stocks is that they have the smallest drops of any stocks during market corrections. After learning about how to use Pareto's Principle in investing, and how to find the key 20% stocks, you may want to do the work on your own. Or, you may also want to take advantage of our very manageable group of 75 stocks that are all Institutional acquisition targets.

The decision is yours. If you want to be an inside Member who knows which are the "best of the best" of Institutional stocks, and which are becoming the top favorites of Institutions, then consider accepting my personal Invitation to join us ... you can do it for a very reasonable $19.95 per month.

If you would like to accept my invitation, simply go to this link for information on how you can be a Standard or Advanced member at StockTiming.com: Member invitation options

Remember, that we will provide C-Factor analyses and updates every Thursday. And, starting in February, we will begin the process of making C-Factor recommendations for 2007.

If you don't feel like you want to accept my invitation right now, please ... at least start to implement the Pareto's Principle strategy that we taught you in this Special Report.

With my best wishes for your success,