Archive for February, 2013

Where is our mysterious “John Bell”

Posted in Investing on 20, February 2013 by nathanbusch

Recently, “John Bell” issued an e-mail stating that he felt bad about how is last “magic stock pick” flopped and promised a real block buster. Of course, he said precisely the same thing when the “magic stock pick” before his last flop of a “magic stock pick” also flopped. Perhaps if “John Bell” actually obtain his stock pick from somewhere other than a random body orifice, then he might actually come up with something worthwhile.

The truth of the matter is the following: one does not need to chase “penny stocks” to do very well in the market. I have posted a list of companies that I purchased on 31st July 2012. That real money investment was up over 53% as of 15th February 2013. I also set up two other real money “books” of investments on 5th October 2012, one of which is now up approximately 29.6% and the other is now up approximately 28.2%. I am currently in the last stages of designing a hedging operation that appears to yield, on average, greater than 61% per year in returns whilst substantially reducing the downside risk. It appears that, with the hedging strategy, there is an 85% chance that the returns will be between 14% per year and 92% per year. These preliminary results are based upon an unbiased backtesting study without a posteriori filtering and including transaction costs, lost opportunity costs, and slippage due to the bid-ask spread.

No, one does not need “John Bell”. One only needs to think carefully about the stock market and have some passing familiarity with stochastic processes. Well, maybe a bit more than a mere “passing familiarity. Ok, it actually requires a Ph.D. level knowledge of stochastic processes. Nevertheless, it can be done and I am putting real money on the process.

I hope that this helps.

Nathan A. Busch