The Model sold ENOC and bought FOSL.
That makes a second position in FOSL, just as there are two positions in NVR. Eventually those second positions will be eliminated, but for now they are in place.
Friday, July 28, 2017
7/28/2017 Unscheduled Trade
ENOC is terminating its trading next week, so I have made an unscheduled trade.
Monday, July 24, 2017
7/24/2017 Long Term Avoids Two Monsters
Sector Model
|
XLU
|
-0.26%
|
|
Full Model
|
Date
|
Return
|
Days
|
BT
|
8/11/2015
|
-41.27%
|
711
|
TMK
|
11/23/2015
|
31.39%
|
607
|
NVR
|
12/16/2015
|
59.67%
|
584
|
CMP
|
2/19/2016
|
4.35%
|
519
|
NVR
|
2/22/2016
|
66.40%
|
516
|
ENOC
|
3/15/2016
|
4.92%
|
494
|
AMWD
|
3/17/2016
|
45.72%
|
492
|
CASY
|
5/12/2016
|
-6.02%
|
436
|
AVB
|
5/24/2016
|
10.18%
|
424
|
AEM
|
6/7/2016
|
-7.59%
|
410
|
ESRX
|
6/13/2016
|
-17.67%
|
404
|
AMED
|
6/16/2016
|
17.80%
|
401
|
FRO
|
6/27/2016
|
-16.86%
|
390
|
ASTE
|
7/12/2016
|
-5.08%
|
375
|
MFC
|
9/1/2016
|
51.28%
|
324
|
SFM
|
9/8/2016
|
23.78%
|
317
|
CFFN
|
9/12/2016
|
3.45%
|
313
|
FIG
|
12/6/2016
|
61.48%
|
228
|
PMC
|
3/16/2017
|
14.70%
|
128
|
FOSL
|
5/11/2017
|
-25.62%
|
72
|
(Since 5/31/2011)
|
|||
S&P
|
Annualized
|
10.39%
|
|
Sector Model
|
Annualized
|
16.57%
|
|
Full Model
|
Annualized
|
13.68%
|
|
S&P
|
Total
|
83.53%
|
|
Sector Model
|
Total
|
156.56%
|
|
Full Model
|
Total
|
119.81%
|
|
Sector Model
|
Advantage
|
6.19%
|
|
Full Model
|
Advantage
|
3.29%
|
|
Previous
|
2017
|
||
S&P
|
66.43%
|
10.27%
|
|
Sector Model
|
120.54%
|
16.33%
|
|
Full Model
|
91.27%
|
14.92%
|
So far doing mostly nothing has worked out rather well this
year. That’s not the same as passive
investing, but is instead meant to stay out of the way of high frequency
trading algorithms. If we sit back and
let them feed off of each other, they can starve themselves out.
Won’t passive index investing accomplish the same
thing? Sure. Passive investing and strategic long term
investing both avoid the black box and the tax man.
The growth of index investing is either a fad, an
evolutionary progression, or both.
Fads are easy to understand, but impossible to explain.
So I’ll focus on evolutionary progression. Let’s say that there are two investors. One flips stocks faster than McDonald’s
hamburgers and the other holds an index.
The one with the most successful strategy (or the least unsuccessful
strategy) will dominate the investment share.
If they start off with the same money then the total amount of money in
each strategy is evenly balanced. If one
out performs the other, then the better strategy will eventually have two
thirds, then three fourths, of the total money – and that’s even if neither
investor changes his style.
For 95% of investors index holding is probably much better
than trying to pick stocks or time trades.
And if those investors think they are in the top 5% then they are almost
certainly wrong.
As for my own model – I already know I have the world’s
worst investment instincts, so I let my own evolutionary algorithm make the
decisions for me.
If I'm dumb, but I KNOW I am dumb, then I can have
something else be smart for me. For
most of us that’s an index. For me it’s
my model.
In BOTH CASES, the answer is long term holding. The short term taxes and high frequency
algorithms will eat most of us alive if we flip trades.
LESS IS MORE.
Tim
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