My subscribers pocketed a 995% gain in shares of Seabridge Gold by following investor Albert Friedberg…
I’ve always had great respect for Friedberg and his team. They knew their investing themes from every angle… the politics, the economics, the fundamentals, the risk-versus-reward. And when an idea passed through all their hoops and hurdles, they invested big.
So when I started out writing an investment letter over 15 years ago, I spoke with Chris Foster at Friedberg a few times a week. I knew if Chris couldn’t punch any holes in one of my investing ideas, nobody could.
[ad#Google Adsense 336×280-IA]Chris eventually left Friedberg to start his own hedge fund. Something he said shocked me…
“Steve,“ Chris said, “I didn’t start making big money in my trades until I finally forgot about the fundamentals completely.”
If anyone else had said it, I’d have dismissed it completely. The traditional thinking is that the fundamentals are as important to investing as the air we breathe is to living.
But Chris tracks just two things: 1) investor sentiment and 2) the trend. And he’s put up a fantastic track record doing just that. (You can see Chris explain the idea on a recent video interview with BNN TV.)
In the last couple of years, we’ve been computer testing every possible investing strategy to build my new product, True Wealth Systems. I’ve been shocked at the results…
Chris was right. The big money really is in the trend.
Here’s a simple example of a True Wealth Systems model for the overall stock market.
With all the events of the last decade – the dot-com bubble, 9/11, the failure of Lehman Brothers – few strategies have been consistently right. Meanwhile, if you simply used an incredibly “boring” trend-following system, you could have been on the right side of the major trends through all of that.
You wouldn’t have needed anything fancy. You could just buy the market when it’s trading above a long-term moving average (like a nine-month or 10-month moving average) and step aside when it’s below it.
It’s not just in stocks. After spending hundreds of thousands of dollars and years testing just about everything for True Wealth Systems, the inescapable conclusion is that in most cases simple trend-following systems have proven to make money better than just about anything else.
Most academics won’t want to hear this. It sounds crazy that “not thinking” (following the existing trend) can beat “thinking.” But historically, it’s true.
My friend Michael Covel says, “The name of the game is not about getting an ‘A’ in balance-sheet reading. It’s about making money.”
Right now, everyone in the world is panicked…
You hear it non-stop. The U.S. debt is going to kill us… Greece is going under… China is taking over… We can’t get entitlement spending under control… The LinkedIn IPO was a bad sign…
[ad#article-bottom]The thing is, there are ALWAYS reasons to panic.
There are always fundamental events that are going to affect your investments. The amazing reality is, few people can interpret how those fundamentals will affect investments as well as someone who simply follows the existing trend. The chart above tells that story well.
Right now, True Wealth Systems says the long-term trend is still up, in just about everything. You can watch the fundamentals, get worried, and not make any money.
Or you can stay in the trade, like we have in True Wealth Systems.
Good investing,
— Steve Sjuggerud
P.S. Literally dozens of strategies that we track in True Wealth Systems are currently in “buy” mode – including a half-dozen that have historically returned more than 40% a year when in buy mode. To learn more, click here…
Source: Daily Wealth