Accredited Investing Education

Retail Stocks with Greg Jensen 8-14-2014



Presented by Greg Jensen

Video Transcription

Greg Jensen: My name is Greg. Glad to be with you today. As always, before we get started into our presentation today, I need to remind you the information
in the presentation is for educational purposes only. It should in no way be considered recommendation to buy or sell a security. Remember that the options
in equity markets do involve risk, and you should a firm understanding of the rights, risks, and the obligations associated with any of your trading
instruments before considering placing any type of trade.

I want to do a little audio check to make sure you’re hearing me okay. If you could inside of the question bar just give me a heads up, saying that you’re
hearing my audio just fine. Okay, perfect. Thank you, John Morris, and thank you everyone.

Let’s jump into a little bit of a discussion about retail. Specifically, what I like to refer to, this is the time of year when I often times go shopping
for retail stocks. This is sometimes you’ll find. It’s seems there’s pessimism. We’ll talk about that pessimism here in just a little bit.

I think one of the key things that you need to, or at least I know a lot of questions that are often times asked, “Well how do you find opportunities in
the market right now?” We’re at all time highs in the S&P. It seems like we go to a newer high every day, and I know we had a little bit of a pullback,
what about three, three and a half percent? Now we’re back pushing up to highs again. It seems as if everywhere you turn, whether it’s CNBC for your
information, whether it’s Twitter, or whether it’s your broker, you get conflicting data and often times confusing data as to where you are looking and
what types of stocks you aught to be considering trading.

Let me just give you an example. Here’s one of the most recent posts, and I just pulled headlines up. Here’s the current headlines on Yahoo! Finance in
regards to retail. Notice just the headlines over here on the left. First of all the feature headline, it’s sad and pitiful, “Howard David Weighs In on
Walmart’s Latest Disappointment”, talking about Walmart’s earnings. “Retail E-tail Makeover: Slow Consumer Spending Hurts Retailers”, “Low Expectations For
Retailers”, “Thorns in the Market’s Side”, and it will go in and talk about retail. “Consumers are Smarter and More Frugal: Customer Penny Pinching is
Spreading.”

Obviously it makes it look as if retail right now is dead. For those of you who are relatively new to the market and have never recognized this before,
you’re very likely going to be in for a surprise that every summer this is the story. What I’ve done here is I’ve gone back in time just a little bit, and
I’m just going to start at 2006, but I have noticed this pattern for the last 20 years, that really, with the exception of 2007 and 2008, that this pattern
occurs. Now why are 2007 and 2008 different? Well, we were in the midst of the financial bubble bursting and nothing was going up during that time because
everyone was in panic mode.

Again, let me just point out this pattern. 2006, notice this, for those of you who are like, “What is this retail? This isn’t the S&P.” This is the
XRT. If you’ve never seen the XRT before, this is an ETF, the SPDR ETF that tracks the S&P retail index. That’s the ticker symbol if you’ve never
looked at it before. I’m sure many of you who have seen, have watched any type of TV before has seen the XRT featured.

Notice the pattern that I’m going to point out here. This is the middle of August, here. In fact, I believe this is like August 10 in 2006, was the bottom
for the XRT and then it proceeded to rally. Here’s 2009. Here’s August right here. Now the bottom actually was back in July in 2009, but even in August
there was a significant rally. 2010, August, end of August in this case, started to then have a significant rally in 2010 in the XRT. Here’s 2011, and
there’s a little more volatility going on in 2011 than there was in the other years but still the same pattern. A low in August in about mid August here,
reaching about, and again, these are not insignificant moves.

Let’s look at dollar moves that we’re talking about here. 2006, we’re talking about a dollar move from 32.50 to 38.50 as the high. That’s a six dollar move
on a 32 dollar stock here. That’s about a 20 percent move to the upside. Here is a 29 dollar bottom right here move up to 35. Again, a six dollar move on a
29 dollar stock, about a 20 percent move. Here it moved from 35 up to 45, up to actually to about 47 by the end of December. Notice these are pretty
significant, and even inside of the volatility of 2011, you had a move from 43 up to 53. That’s a 10 dollar move on a 40 dollar stock. That’s about a 25
percent return.

Here’s 2012. Notice the same pattern. This one wasn’t as big of a move percentage wise but still significant, from 56.50 up to about 64. About an eight
dollar move, or about a 15 percent move to the upside. Here’s last year, 2013. The bottom was about August 20. August 26 and a rally from about 77 up to
about 88, where it peaked out right there. This is often times the pattern that we see going into the fourth quarter.

Some of you are like, “Well yeah, I know, because you always buy stocks around Thanksgiving, right?” No and in fact, if you wait until Thanks- … Here’s
again another common mistake that people make with retail investing. We don’t think about retail. We don’t think about our holiday shopping until
Thanksgiving, right? At least that’s often times the pattern that you see here, and whatever it is. Maybe it’s the Macy’s Thanksgiving Day Parade that gets
you excited for it. Maybe it’s just the big Black Friday Doorbuster.

That’s when it seems like all of the financial TV stations, CNBC, Bloomberg, Fox News Channel, Fox Money, all of these massive coverages about how are
Black Friday sales going? It doesn’t happen until the end of November. Notice that if you wait until November to get into some of the, at least in the XRT,
and you’ll find this when you start to look at individual names as well, that you’ve missed the move.

Here’s Thanksgiving right about here. Notice what it did the rest of the year in 2006. It didn’t do anything. Here’s 2009. Here’s Thanksgiving. Notice what
it did the rest of the year. 2010, here’s Thanksgiving. Pretty, and this one kind of slid a little bit higher but not much. 2011, Thanksgiving, well
Thanksgiving actually was down here. We got a little bit of a bounce back up, but ultimately the rally all happened prior to November. In fact, most of the
times the fourth quarter rally is in anticipation, will sometimes peak out in October in these retail names.

If you wait until Thanksgiving you’ve missed the run. Again, even last year we peaked out first of December. Now we had a little subsequent bounce and
rebound and ended up back, by the end of the year, back to where we were at the top at the end of November, but this is a pattern. This is a pattern that
can be traded. What do I expect this year, then?

Let’s go and look at some live quotes here. I’m going to pull up my brokerage platform. We’ll look at a couple individual names here as well, but let’s
just start out with the XRT. Notice that we have a sideways pattern primarily. Let’s go to a six month chart so we can see it a little bit better. Notice
we’ve got a sideways pattern again here in the XRT. We’ve got some pretty good support here at about 84 dollars, and one way that you could trade this
trend is to simply be generic, like the XRT. Those are all the examples I just showed you, were charts of the XRT.

Like I said before, if you start to dig into maybe some individual names, which we’ll do here in just a minute, you’ll notice the same pattern holds true
and in fact, in some cases it’s a little bigger move to the upside. However, in some cases you also have the individual risks of those individual stores.
If you’re the type of investor who says, “I just like the ETF approach. I see the trend of retail.” And you want to trade this trend. Absolutely, the XRT
is a great way to go about that.

How do I trade that pattern then? Well, there’s a lot of different strategies that you can employ here, whether you’re just an equity trader and you want
to just go long stock here, that’s the potential, you can do here. If you’re an options trader and you want to use some different option strategies, well
there are option strategies that can leverage your return and also limit your risk a little bit too, just in case you’re wrong. I’ll get to a couple
specific option strategies here in just a little bit, when we talk about some names.

The point I want to make here is that I can most likely expect, again, looking at past behavior. I know you hear the disclaimer all the time that says,
“Past behavior does not indicate future results, blah, blah, blah …” and I understand, as a licensed adviser in the past, again, my personal experiences,
we have to say that. From a regulatory standpoint, we have to say that because it is true. There are the 2007 and 2008 anomalies. Let me just go back and
look at, show you guys 2007 and 2008 as an example.

Let’s do this, make this full screen so I can scroll back there. We’ll go back to 2007 so you guys can see both of them. I’ll make it a little, I’ll bring
it in just a little tighter here so you will see this. So 2007 … let’s scroll back up here. Go through, there we go. Let me scroll, sorry, months back.
Right, but it’s not going to give me months here for some reason. Trade Monster’s not wanting to … November … That’s why, because I’m still over a
year. Hicky picky. There we go! Now I’ve got my months back in here on the monitor

Again, here’s 2008 as an example. We did still have a little bit of the rally. Notice we still had a little bit of the rally from August, on the XRT we
went from 30 and change up to about 35 and we were starting to move up into September, but then all the wheels started falling off the economy at this
point. You guys remember, this was Lehman Day. We had bankruptcies going on. We had Bear Stearns getting acquired. We had Fannie and Freddie going belly
up. You remember, this was just ultimate panic mode, so the market never realized the potential gain that could have happened here. The same thing is true
back in 2007.

From a regulatory standpoint, yes, past behavior does not necessarily indicate future results. I can’t jump in and say that the trend of the market, that I
can guarantee like we had last year, where we had the lows and we had the subsequent rally in this XRT, that it’s going to happen again this year, but I
also can be a smart enough trader to realize that patterns are there for a reason. The reason why patterns exist is because traders are the ones making the
decisions.

A lot of people want to have this disconnect from the stock market and make it an impersonal thing. They try to say that the stock market is about all
these big companies like Apple and Google and Exxon Mobile and Microsoft. They try to become really impersonal with it and take things that they’re not
going to impact, in a way, the overall market. In reality, what makes up the stock market are individuals trading those stocks, not necessarily the stocks
of the companies themselves. It’s the individuals, and it’s the individuals who recognize this trading pattern and then make decisions on it.

I think it’s important for you as a trader to realize that and to realize those same institutions, and I say individuals, the individuals running those
institutions are doing the same thing right now. They’ve got their shopping cart out, getting ready to buy retail names. Now that takes you to the next
step, “Okay, well what do I do then? What names do I pick?” Let me give you a couple of rules of thumb here, and I’ll come back to these a little more in
detail as we go through some of these individual names and then come back to this idea of community as well.

The first thing I would say is be prepared for volatility. What does that mean, being prepared for volatility? Well, it means that retailers are exposed to
monthly sales reports. It means that they’re exposed to new product releases. It means they’re exposed to the things like we got this week, the Retail
Sales Report, the monthly economic reports we get that can have a negative impact or positive impact with those individual names. One thing is you have to
be prepared for volatility.

I think it’s not very cautious or maybe not very prudent, is maybe the better word, to just be blindly bullish and do extreme leverage type of bullish
trades in retail. What are extreme … don’t just buy call options, in other words. If you’re just going and buying short term call options because you’re
like, “Well, I see this pattern in the XRT and it’s going to go up.” Recognize that there’s going to be volatility and you need to trade accordingly.

Obviously, inside of the options world, the way to hedge volatility or to use the Greek term, for those of you who are Greek traders, to hedge Vega, is to
simply use spread trades. Don’t just go long or just short options. Do your trading in the form of a spread, whether it’s a vertical spread, whether it’s a
diagonal spread, whether it’s a collar trade, and for those of you who want to use equities as well. Just recognize that the spread, in and of itself, can
offset that volatility that can impact your trade. That’s your first step, is be prepared for it, because retail can be a volatile space.

Number two is use channel checks. Now this is a phenomenon, I shouldn’t even call it a phenomenon. It’s just, again, a recognition of human behavior that I
was first turned on to about 20 years ago, when I first read the book, it’s got to be about 20 years ago when he published it, that Peter Lynch wrote,
called “One Up on Wall Street”.

For those of you who don’t know who Peter Lynch is, he’s a very famous, he’s retired now, mutual fund manager. He managed the Fidelity Magellan Fund, the
world’s largest mutual fund at the time, and he’s written several books. One of the books that I read that helped build my foundation in fundamental
analysis was this book, “One Up on Wall Street”.

One of the things that Peter Lynch recommends in there is doing things called channel checks. What is a channel check? Well, it doesn’t mean check and make
sure CNBC works. We’re not talking TV channels. We’re talking, go to the mall, I know malls are kind of a dying space, but go to your local retail outdoor
shopping mall, your strip mall, your, if you’re in Chicago, go walk down the Miracle Mile or the Magnificent Mile, whichever it is. I think it’s called the
Magnificent Mile. I love that stretch of Chicago, by the way. If you’re in New York, go stroll down Fifth Avenue, as an example of doing a channel check.

What you’re doing, you’re not necessarily shopping, but you’re just watching. The example that Peter Lynch used, he said he would go shopping with his wife
at the mall. He would just hand his wife the credit cards and just say, “Okay, I’m going to go grab some popcorn and I’m going to go sit here on this
bench. You walk around and do your shopping that you need to do and I may browse around a little bit, but I’ll meet you back here.”

Then what he would do is simply watch, watch traffic. It doesn’t necessarily mean bags, either. It means watch traffic. The stores that have traffic are
going to equal dollars. Some stores are going to be busier than other stores. A really good example of this and just what I have noticed is that Apple is a
… one of you asked, [inaudible 00:20:13], you asked, “Is Apple considered a retail stock?” I would say yes. Apple is kind of a hybrid because they do
have, obviously, exposure in the technology world, but the bulk of their revenue still comes from a retail focused technology stock, so yes, I would call
Apple a retail stock.

I would also not call Amazon a retail stock. Apple is more of a retail stock than Amazon is, even though you would think, “Wait a minute. Amazon is the
Walmart of the internet.” Which is true, but the thing about Amazon is Amazon has started to get their fingers in so many other different venues of
technology, from their cloud services to their entertainment division, that it’s really not, I wouldn’t call Amazon truly a, they’re a little bit of a
hybrid, kind of how Apple is a little bit of a hybrid, but you don’t see Amazon stores at the mall either, where you do see Apple stores and you do see
Michael Kors stores and Tiffany, the traditional ones or the ones that are more traditional retailers.

Do your channel checks. If the store is busy, that is … and I know. It seems really easy and it seems really basic, but it’s one of the easiest things to
do. Where there is traffic there is going to be earnings. Obviously, you may live in an area where you don’t have all those. In that case, you’re going to
be relying on the internet to do some of that. You’re going to be reliant on a community, and we’ll talk about a community here in just a little bit.

Let me jump in and talk, before we get to a community and specifically the community of traders we’ve got inside of OptionsANIMAL. Let me talk to you a
little bit about some of the specific names that I’m looking at right now. I hope that didn’t just end the webinar. No, it didn’t. Okay. I thought I hit
the wrong button there for a second. Let’s jump into some individual names. I’ll show you some of my favorite retailers. To me, the best retail stock out
there, don’t hate on me, please. I am giving you all my personal opinion right now.

One of my favorite retailers is Costco. Costco does things right. Costco is a stock that also follows this same pattern. Let me just scroll back and show
you last year, as an example. Go back to, let’s go … There we go. Notice Costco’s pattern. Bottom right about in August. Costco actually gave you the
opportunity to get back in in October, but they don’t always do that.

They had a little bit of pullback in October as well, but the trend all the way through the end of November it went from 112 up to 126. It had a nice
powerful move to the upside and then that was the top on the first of December and then it pulled back. Again, it’s the pattern from August, middle of
August, end of August up to the first of November, they have these nice bullish moves. I like Costco. Like I said, I think Costco does a lot of things
correctly. They really know how to target in on who their demographic is, who they’re going after.

I think another one, a really interesting one right now is Lululemon or Lululemon, depending on how you want to pronounce it. Lululemon has not had a good
year, from a company standpoint. This is a stock that’s gone from the mid 70s, now sitting in the high 30s. It’s been chopped nearly in half from its highs
a little over a year ago. Why do I like this stock? Well, I still believe there’s some excitement in this name. I don’t think this product is dead. I know
the product loyalty is still very strong. I know Nike’s making, Nike is a huge competitor here, which I like, as well. I do like Nike. I’m actually a full
disclosure shareholder of Nike.

I also like Under Armour in this same space, but both Nike and Under Armour’s stocks have performed significantly better than Lululemon’s and I think
there’s a little bit of opportunity in Lululemon from a percentage standpoint, more so than there is in Under Armour or Nike, even though I think both of
those previous companies are better run, simply from the stock trading standpoint, where it’s at and where the potential fourth quarter may take it.

Again, this is another name that I think is an interesting one. Another stock that falls in that same category is American Eagle. American Eagle is an
interesting name in the fact that, again, this year has been a pretty rough year for them. They were at 15. They’re now at ten. They were actually at 17 at
the end of the year last year, but the pattern could and should behave about the same.

Those, Lulu and American Eagle I think are both a couple of risky names in the space. If you want to look at, “Well, I don’t want to deal with risky
because, yeah, their stock may be there for a reason. I want to deal with the good names that I can count on having good quarters.” Then I think you go to
some of the more traditional retail names that aren’t going to be as driven by fleeting fashion, by trends, and one of those is Nordstrom.

Nordstrom to me, again, is another key player in the retail space that has this pattern that we’re talking about. Notice the pattern last year move from 56
up to about 65, from the end of August up to the end of November. The same type of pattern. I think Nordstrom is an interesting name here.

Tiffany’s is another one that I think is a very well run, very good quality brand that, as you look at the pattern, again, here’s last year’s pattern. I
think we’ll just stop it at the first part of December. This one actually did continue into mid January before it peaked, but again, a nice move from high
70s, mid 70s, 76, 77 back here in end of August, up to 90 dollars a share the first part of December. Tiffany’s is another interesting name at these
levels.

I think Michael Kors is another very, very good name at these levels. They didn’t have quite the big stellar run last year, but still not terrible. Again,
the bullish pattern here, the stock went from low 70s. Here it’s 72, 73 and went as high as about 85. Before it had its big up move in February with a big
blowout earnings with their holiday sales, and actually Michael Kors is, with the pullback they’ve had from a hundred dollar stock in February, even there
again in May, the pullback below 80, this might be another interesting entry point for Michael Kors at this level.

I’m going to make a stretch here, and this isn’t really that much of a stretch, but I’m going to call this an entertainment/retail stock as well, and that
is Walt Disney. Disney, in the last year has become one of Wall Street’s favorites. Everybody loves to be a Disney shareholder right now and a lot of that
has to do with the fact that Disney has done a very, very good job of creating property, creating content. This specific name I think still has the same
opportunity. I wouldn’t say this one’s going to react the same way as the traditional pattern we’ve talked about, of the traditional types of retailers.

Like I said, this is a little bit of a stretch, calling Disney just a retailer, because they’re also in the entertainment industry and communications, the
television industry as well. The same thing with Apple. Apple is really not truly a retail stock because they’re a little bit of a hybrid.

There is one name that I would avoid in the fourth quarter this year, and that is Walmart. I do agree that Walmart’s earnings were not very impressive and
although they do often times have the same pattern we’re talking about, notice last year. The move from 72 up to 80, which is a huge move for Walmart and
they’re back down at that 72 range again right now. I think Walmart has a few fundamental issues that they’re dealing with and personally would maybe shy
away from structuring or playing this pattern on this stock this year.

The list, we could spend hours going over each individual name, whether it’s, Sharon, you’re asking about Ross Stores or Dave, you’re asking about Best Buy
or any of the other stocks that you guys have listed there, from Abercrombie and Fitch. There are a lot of names and the pattern typically holds the same.
I would say, from a standpoint of trading, you kind of have to go back to using my channel checks and doing my due diligence to pick the best players in
that space.

The last, I think, and most important thing here is to be part of a community. I think, for those of you who know me, know that I’m very passionate about
community. I’m very passionate about using others and helping others become more successful and in doing so, you get great opportunity given back to you.
OptionsANIMAL is a phenomenal community of investors, and there are thousands of investors and students in this community across the globe. I find on a
regular basis that I am able to find great trading ideas from members of the community. There are also phenomenal trading ideas that you, as a member of
the community, will be able to get from the instructors.

The instructors at OptionsANIMAL are second to none, in my opinion. There are no better traders in the world that I have met. The other unique passion that
they have and the unique thing about them is that because of their backgrounds, they have a unique perspective, in a sense, to help the students of the
OptionsANIMAL school succeed. That unique background is the fact that they, themselves, were students first. We’re not a bunch of floor traders who tried
to decide to make an education company to see how much money we could make.

The instructors of this program have varying backgrounds and they’re across the country. I can’t say across the globe right now, because we don’t have any
instructors based internationally, but from Jeff McAllister, who’s background is he’s an airline pilot and he lives in, well used to live in New Hampshire.
He actually just moved to Connecticut. To Emilu Bailes, who’s background is in medical sales with Abbott Laboratories. She lives in Atlanta Georgia.

To Eric Hale, who’s a nuclear engineer and lives in Naperville, IL. To Ken Bailey, who is also an engineer. Lives in Pennsylvania. To Scott Gillam, who is
a former financial adviser and has been in the IT space for several years. Also lives in Connecticut, in fact right on the doorstep of ESPN, there in
Bristol. We’re all over the country, and their concern is for the success of the students because they, themselves, were that once. What we’ve created is a
phenomenal community.

Let me give you one of the examples of this community. Down here, you’ll notice several different stocks. These were our stocks to watch this week, and we
do two live broadcasts on a weekly basis, where we talk about specific stocks, we talk about the overall trends in the market, we talk about the DOW, the
S&P, and the NASDAQ. We talk about the ten year yield. We talk about the commodities, both oil and gold and if there are trading opportunities there.
More specifically, we use the overall economic story line to help build our expectations, but then we look at individual stocks.

I just wanted to highlight a couple of them, here, from last week. Let’s start with Apple. Last week on Friday Apple was at 94.74. The expectation or the
description of why Jeff was looking at Apple was from an accumulation standpoint, and he said, “It may have institutional accumulation here right now. The
accumulation distribution line and the money flow are both turning positive, and September 8 they have an event with their new iPhone 6, and it’s possible
we’ll get a bullish run playing into that.” What has Apple done since then, being at 94? Well, Apple today is at 97. Three days later. It’s having a nice
little pop this week, as an example.

Let me go and highlight another one, here. Let’s look at Monster, as an example. This is one that specifically I was looking at last week. Earnings were
just out last week. They had a good gap up. I believe there is a possibility that Monster still moves to the 73 to maybe as high as 75. I think there’s a
short term diagonal or even a vertical play here.

What has Monster done? Similar type of move. It’s not all the way up to 73 yet, but it was at 69 and change. It’s up to 71 and a half. It had a nice follow
through after their earnings gap up and is probably trending to that resistance level, right there at 73, maybe as high as that resistance level back in
early February. Those are the types of expectations that I was looking at.

They’re not all that way. You’re going to have some times where you’re going to have scenarios that don’t go as planned. John Deere is an example of one of
the things I want to point out, there’s a nice indication of the chart here. “The stock was just under 87, right around 87 dollars, a nice indication but
earnings are coming up. Protective put is an intelligent play here. Expect good earnings but will look at after earnings.” What’s John Deere done in the
last couple days? It’s gone from 87 down to 84 and change. It’s actually had a negative move to the downside and that protective put ended up being a very,
again, prudent strategy choice at the time.

This type of community, this type of group of investors I have found is an essential part of your successful trading long term. One of my good friends, Guy
Adami. You know Guy from “Fast Money”. Guy recently ended up taking a position with LPL Financial, the biggest, one of the biggest investment advisory
firms in the country. Guy and I are still doing a lot of stuff together. In fact, we’re doing a webinar next month together, but he’s been very busy in
this new partnership opportunity he’s got with LPL Financial.

One of the things that Guy said to me years ago that has stuck with me was that whenever you get into a trade, and he was taught this at Goldman Sachs when
he was [inaudible 00:38:18] there. He said, “Whenever you get into a trade, take a partner, because what that partner will help you do is give you a
different perspective.” It’s sometimes easy to put on blinders or fall in love with a trade when you put it on, and I think what’s important when you’re
looking at potential trades is to have a community of investors to bounce it off of. That’s what we have inside of OptionsANIMAL.

What we’ve worked very hard to build is a community of active traders who talk with each other on a daily basis, whether that daily basis is through chat
sessions. Let me give you an example of the daily communication opportunity that happens inside of our community. This is what you get inside of our
education website we have. Here’s our live calendar, where these are the specific classes that are going on today. Here’s the 14th. This is a pretty busy
day, today. A lot of classes starting at 6 a.m., 7:30, 9 a.m., 10:30, noon.

Here are the really interesting ones, to me, are these live, open forum coaching sessions. These are open forums. You, as an investor, if you’re just
looking for ideas, if you’re not necessarily saying, “Okay, I already know how to do debit spreads or I already know how to do the put calendar or
fundamental analysis or adjusting the collar trade. Maybe I don’t need to necessarily attend all of these classes on a regular basis,” although, inside the
classes, themselves, those are opportunities to find trading ideas as well. “What I can do is go to one of these live open forum sessions, that give me the
ability to interact, not just with Karen,” she happens to be the one hosting that forum session, “but all of the other investors in there and find ideas.”

That’s what half of trading is about. Part of it is, yes, you’ve got to educate yourself and you’ve got to understand how to use the different options
tools to take risk out of the market, I shouldn’t say take it out. There will always be a certain amount of risk, but to minimize risk. The other half of
investing, once you know how to do it all and use the strategies appropriately and how to adjust trades, well then it comes down to, “Well, how do I find
ideas?”

I’ll tell you what, if you’re trying to find ideas on CNBC or if you’re trying to find ideas by subscribing to somebody’s newsletter or listening to “Tasty
Trade” as your way of trying to find ideas to trade, you’re missing out on huge opportunity, because you’re getting a very, very narrow focus and not
necessarily one that specifically fits you. What you need to do is find a community of investors where, yeah, some people may not be able to give you input
on your trade on John Deere, but you might have a handful or really good traders that, if you start throwing out there, “Hey, I’m looking at trading Deere
and here’s the specific things I’m looking at,” you may get some very, very good feedback that you wouldn’t have gotten in any other place.

Let me give you another example of that inside of our community. Again, not only in the live settings, in these little blue bars, where you notice those
are daily, sometimes multiple times a day, where you can get that kind of information, but also if you want to do it in the community forums, where you
give people a little bit of time, because maybe you don’t have time to attend those live sessions. You just want to say, “Okay, I want to come in here and
ask a question about maybe a specific stock.” Maybe I want to come into one of these stocks here and say, “Okay, I want to ask a question about Wells
Fargo.”

Here’s a specific question Carl asked about Wells Fargo, and he put it in a chart and then said, “What do you guys think about this?” Then people went in
and replied to it. Or maybe I have a question about JP Morgan, and that’s one of the things that I wanted to question, or maybe it’s just more of a general
question. Maybe it’s like what Shugo just asked of, “I’m looking at SIPC insurance versus FDIC insurance. What’s the difference and which one should I get?
Again, I know that you’re not going to give me investment advice, but you, as traders, what have you chosen and why?”

This is the type of community that I’m talking about. That one little snapshot I showed you for example, this is part of our 2004 watch list. Let me just
show you an example on a weekly basis what this looks like. This is Scott Gillam, one of our instructors, who puts this together on a regular basis. These
are our weekly calls that we go together. This last week I showed you Ford, Apple, Nvidia, American Express, Deere, Nvidia. The week before it was
Activision, Raytheon, Apple, Disney, Disney, Amazon, American Airlines. The week before that, Amazon, Boeing, American Airlines, AK Steel, GoPro, Qualcomm,
Ebay, Procter and Gamble, The IWM.

On a weekly basis, this is what we’re looking at and why. These types of trade ideas and information about the market is, I’ll arguably say, more than half
the battle. Yes, I don’t want to downplay the importance of understanding and learning, but it’s just half the battle. Half the battle then, is once you’ve
learned it is, “Well, how do I find opportunity?”

Another way we share opportunity, and primarily how we share education and teach people is through our weekly trades that we send out. These are specific
trades where we go in and structure them and show our students what we’re doing and why. These are real live money trades for us, as coaches, and our
purpose behind this is to share them so that they can see what we’re doing. Some people may look at that and say, “You sent out 234 trades and you closed
207 of them for a profit? What do you have a crystal ball?” No. We just, it’s a process of trading.

The average return per trade is just under 17 percent. The reason why we’ve been able to close for such a high level of profitability is this idea of trade
adjustments, which is one of the things that we specialize in at OptionsANIMAL. We teach people how to not always just rely on stop losses in trading so
that they can get a really high win/loss ratio. The way we do that is, again, through sharing.

Let me again show you how we share this back into our community. Back into the tabs, here in community, we have these animal trades. Here’s just an example
of one on … here’s the most … I’m just trying to find where the most recent one is. Here’s the most recent one, right here. Sorry, that’s a really old
one. That one’s a year old. Here’s one on 8/6. That one’s relatively recent. That’s just last week, I guess. Ken’s doing a trade on IWM. He’s doing an iron
condor, and here’s all the details of his trade. Then as people have questions, they can ask him.

Here’s another example of a trade that Jeff did on Delta Airlines. Step one, he was determining direction. Here’s his rationale. Looked at different trade
ideas, selected and structured the trade right here. He did a put vertical specifically on Delta. Those were the trade parameters he was looking at. Here’s
what his risk graphs look like. Here’s his actual placement of the trade and then off to the races. In this case the snail race. Jeff has got a very fun
personality. As you get to know him, you realize that. Then they go through and make adjustments.

If you have questions, you can then ask him. “Hey Jeff, I thought I heard you say in a few classes you don’t like to take ownership of stock as a secondary
[inaudible 00:45:56] put. There are specific scenarios where you would not mind taking possession of stock as a secondary exit. I know the simple answer
would be it depends, but I need to understand what are the scenarios where you would be okay taking possession of the stock. Thanks, Ray.”

There’s Ray’s question and then Jeff’s response right below, “Ray, it does depend,” and then goes through and answers the question. As you have questions
about this process, whether it’s trades like Jody did on Disney on August 1, just a couple weeks ago, that she’s already closed and she got 30 percent in
one trading day. There’s not a lot of times to ask questions on that as she has it open, but it’s a way of us showing our students our thought process that
allows them to ask questions along the way and learn this methodology of trading.

Yes, part of it is learning methodology. Part of it is being educated enough to be able to understand how to take a bullish approach versus a bearish
approach, but part of it is also being part of that community who are going to give you the trading ideas and the trading feedback as you go along. For
those of you, because I recognize a lot of names that I’ve seen before in webinars. For those of you who are not part of our community yet, because I know
there’s a handful of you who are here that are members of the community. There’s a handful of you who are not.

For those of you who are not part of our community, you need to stop waiting. We are the best trading community on the planet, but you have to take action
to become part of us. Otherwise you’ll just keep coming to these webinars that I teach and learn a little bit of information there and learn a little bit
of information here, but really not get the full value of becoming part of our school. Part of it is the learning, and we can offer you some opportunity to
lock in some discount on tuition if you call in in the next 30 minutes, but part of it is just being part of that community once you have learned it.

For those of you who are new to us and have never seen us before, give us a phone call. You need to find out who we are. What we will do when you call in
is set up a consultation with you, where we can talk about your individual needs, structure specific education packets that can fit you, because we realize
every one of you is in a different place as well. Then, most importantly is, we’ll help show you a path where you can start to make the decisions with your
investments to help you see these consistent types of results that our students see on a regular basis.

Thanks for spending time with me today. Again, for the offer today, is if you call in the next 30 minutes you’ll be able to lock in this 25 percent
discount on our tuition as well as a free consultation about your needs. Our number is 888-297-9165 toll free. Thanks for spending the time with me today
and I look forward to seeing you all in another OptionsANIMAL webinar. Thanks everybody.