I hesitate to add to this thread. Users of VV seem to eventually fall into two groups. The first group are those who have been burned by it and want to warn others. The second group are those who have found 1 or more aspects that made it worth while to subscribe.
I have a foot in both camps.
During the several years that I used VV I never got “burned” financially but there were a few times it nearly happened. I avoided being burned due to warnings of other VV users not from warnings from VV itself. VV’s marketing hype which unfortunately continued in their user help forums made it very easy to get burned by assuming that VV had no significant limitations when it fact it had some very serious ones. I was one of the noisy posters on the VV forums urging VV to do a better job informing users of its limitations and doing the warning myself in the interim. VV’s approach at the time, (maybe they have improved since I left) was to deny the existence of serious limitations and even to delete posts that clearly demonstrated those limitations. I think I never got banned by the VV marketing police as some others did because I usually included sentence in my posts noting that VV, despite it limitations, was a tool that could not be duplicated elsewhere at a price affordable to individual investors – remember this was in the days before Portfolio123. Even in the days before Portfolio123, what was in VV could be obtained elsewhere but the yearly subscriptions were in the thousands rather than the hundreds that VV was asking. So although VV info was not unique, it was the only source in its price range.
For the years before Portfolio123, VV was the only affordable means for back testing strategies that used fundamental data. So despite it serious flaws (some of which have been corrected after a lengthy period of denying there was any flaw) VV had a useful place in a trader’s toolbox. Today, Portfolio123 easily surpasses VV in every way but two (back testing shorting strategies and combining chart reading with fundamental analysis). VV’s chart reading tools were always 2nd rate during my time as a user (Metastock, Amibroker, TC2000 and others were better in raw power. VV’s advantage was more of convenience of using an integrated program rather than two of three.
VV’s strengths and limitations are both present in its approach to market timing. VV can be a useful tool in the hands of the experienced VV user who knows often from experience what the different timing tools can and can’t do. VV’s marketing hype (remember I am talking about the VV of several years ago so VV might be better now) would gloss over the failures of its various timing systems and give the impression that it is a system that “never failed”. At the time I subscribed, VV would use the “Riding the Wave” timing calls to demonstrate how much money could be made with the right calls and then they used their “Confirmed Calls” to support the claim that VV never failed to signal a major upturn or a major down turn. After a while, I learned that their Riding the Wave system was often wrong and their Confirmed Calls (which never failed) often had very modest gains or even whipsaw losses for extended periods. But their marketing hype (which at that time continued in the user help forum) made it sound like VV had both characteristics at the same time. Rather, VV was often one or the other but frequently not both at the same time. It seems to me at the time that users were given insufficient guidance into safe and profitable use of the VV timing systems.
OK, the above should be enough for a reader to realize when I speak about what VV does well, I am not giving an unconditional recommendation of VV. So let me proceed to what I remember VV being good at in the timing world.
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VV based its timing on the average price of all the stocks it followed. It thus often gave a different picture than that of the major market indexes which are cap weighted. VV’s index was not necessarily better than the typical market cap indexes, but having a second very different index could be helpful. By the way, VV’s method for constructing its index is similar to ValueLine’s Arithmetic Index (^VLIC in Yahoo symbol), so VV hardly invented the price weighted index but VV did provided a quick way to get the price weighed perspective.
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VV’s secondary timer used a buy/sell ratio as a confirming oscillator. That is an interesting measure for identifying major oversold and overbought conditions. VV gives every stock a Buy, Hold, or Sell rating based on proprietary formulas. Although it would not be identical, one could construct a similar indicator for identifying oversold and overbought periods using a ratio of stocks being above or below a moving average as long as one excluded stocks with prices close to the moving average (ie stocks that were not clear buys or sells). Yet another OB/OS indicator would be new highs vs new lows. So even though VV’s 2nd timing indicator is unique since it is based on their propretary formulas, that indicator concept of OB/OS existed long before VV in a variety of different implementations.
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VV has a third indicator (its MTI or Market Timing Indictor) which is also proprietary in nature and according to VV is based in part on the buy/sell ratio and the VV composite index and perhaps an additional factor as well.
As other posters have mentioned, from time to time, VV retools some of the above indicators. During my time with VV, VV did not always tell users when an indicator was reformulated nor did VV automatically tell users when lists of past signal dates might have changed due to changes in a formula. As I have repeatedly said above, I am talking about what VV was like when I subscribed years ago and VV may be better now. I mention this so anyone who decides to check VV out is alert to the possible need to confirm VV’s claims, lists, etc., with other users and not rely entirely on VV’s own published materials.
In summary:
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I can understand why some traders might continue to use VV for stock selection (ie especially for shorting since P123 does not yet have this) and can see why some might continue to use VV as a tool box for some market timing indicators (since its VVC index is one way to get a similar picture to that provided by ValueLine’s VLIC and its buy/sell oscillator might be preferred by some to other OB/OS indicators).
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I personally no longer use VV because P123 is far better for long stock strategies (I prefer being long individuals stocks and in cash or shorting ETFs rather than shorting individuals stocks). I no longer user VV for timing because its timing tools gave me inconsistent results and because I could never be sure VV would inform me if VV changed the formulas used to calculate its timing indicators.
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Once one understands the concept that each proprietary VV indicator is built on, one realizes that there is nothing unique in Vv that can not be obtained elsewhere or constructed for oneself. The goal here is not, I repeat not, to reengineer VV’s indicator. I make this point for two reasons. First, I prefer to make my own indicators rather than copy anyone else’s indicator. I am confident enough (some might say arrogant) to prefer coming up with my own new implementation of a general concept. My second reason is VV tendency to threaten to sue subscribers who used what they considered their proprietary material in ways that did not have VV’s approval. So just in case some VV legal guy reads my post let me be very clear. I have never tried to copy any VV formula or indicator. Also I have not seen any concept in a VV indictor that was not already known and used by others before VV came up with their own variation. So if some VV legal guy thinks any of my indicators might be similar to what VV considers its proprietary items, it is because I am following “prior art” in patent terms that pre-dates anything VV has implemented. When I used VV it was not because VV had something that others did not; it was because VV provided whatever it did in a form that was less expensive or more convenient than the alternatives.
In short, there is nothing special about VV. Some may find it more convenient or less expensive than alternatives. That was once the case for me, but now I find other products (like Portfolio123 among others) to be better suited to my needs than VV.
All the best to VV users. All the best to a hopefully reformed VV.
Regards,
Brian