MarketCycle’s Method

94% of all individual investors, when reporting to the Internal Revenue Service each year, reveal that they make zero profits (according to IRS.gov).  That is why MarketCycle Wealth Management has had to re-invent investing from the ground up.

So, what do some well known investors say about various investing/trading techniques?

Fundamental Analysis ?

“By the time a fundamental case presents itself, the move will already be over.”
– Ed Seykota, from the book: Market Wizards: Interviews with Top Traders, by Jack Schwager

“Fundamental economics are nice, but useless in trading.  True fundamentals are always unknown.”
– Jerry Parker, from the book: Trend Following: How Great Traders Make Millions in Up or Down Markets, by Michael Covel

“Wall street relies on stock analysts.  These are people who do research on companies and then, no matter what, even if the company has burned to the ground, enthusiastically recommend that investors buy the stock.”
– Dave Berry, comedian

 
 
 

Buy and hold ?

Jon Stewart:  “My mother is 75 and she bought into the idea that long term investing, buy and hold, is the way to go. And guess what?”
Jim Cramer (with head hung low):  “It didn’t work.”

– Interview on Comedy Central’s: The Daily Show With Jon Stewart, March 11, 2009

“One down 50% year can take decades to recover from, whereas a series of small up years will compound to great returns over time.”
– From the book: Invisible Hands: Hedge Funds off the Record, by Steven Drobny

 
 
 

Day trading ?

“Fastest way to intensive care I know.  It’s insane.  The minute I hear the words ‘day trading’ I know that I’m staring at a loser.  It cannot be done.”
– Ralph Bloch, chief technical analyst at Raymond James and Associates

 
 
 

Counter-trend investing ?

“Counter-trend trading is very dangerous.”
– From the book: Invisible Hands: Hedge Funds off the Record, by Steven Drobny

 
 
 

Contrarian investing ?

“Markets can stay irrational longer than you can stay solvent.”
– John Maynard Keynes, lived in the 20th century and is still the world’s most famous economist

“I lost a lot of money shorting the NASDAQ (tech stocks) during the second half of 1999… I lost about a third of my capital that year.”
– Jim Rogers, (retired) global-macro trader and co-founder of the Quantum Fund

 
 
 

Value investing ?

“Big money does not come from cheap stocks.”
– Jesse Livermore, a late 19th and early 20th century stock trader that was so good that he was eventually banned from the trading shops of Boston and New York

 
 
 

Market-neutral investing ?

“It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.”
– William O’Neil, founder of Investor’s Business Daily

“Cheap leverage allows hedge funds to boost returns from strategies that are minimally profitable and should otherwise be abandoned.  Instead, their trades get ‘overcrowded,’ leading to crashes when the leverage leaves.”
– John Authers, chief investment editor, Financial Times

 
 
 

Intuitive trading ?

“Decisions based on our natural instincts invariably turn out to be the wrong course of action.  Success based on an emotional response to market conditions is the result of chance, and chance does not help us to attain consistent results.”
– Martin Pring, from the book: Investment Psychology Explained

 
 
 

Global-macro investing ?

“Most of us are rubbish at seeing macro events coming, let alone timing them.”
– Dylan Grice, strategist at Société Generalé

“Macro funds tend to have a lot riding on a handful of bets, so getting a few calls wrong generally makes a big dent in returns.”
The Wall Street Journal, September 27, 2010

 
 
 

Dollar-cost averaging ?

“There has been a persistent ‘buy the dips’ mentality in the markets, which proved to be a disaster in 2008.”
– From the book: Invisible Hands: Hedge Funds off the Record, by Steven Drobny

 
 
 

Trend following !   

MarketCycle uses a unique & proprietary version of trend following to trade market cycles.

“Markets go up and markets go down.”
– Ronald Reagan

“All profitable systems trade trends.”
– Ed Seykota, trend follower

“I analyzed which investors were the most successful and discovered trend following.”
– Salem Abraham, from the book: Trend Following: How Great Traders make Millions in Up or Down Markets, by Michael Covel

“Markets aren’t chaotic, just as the seasons follow a series of predictable trends, so does price action. Investments are like everything else in the world:  They move in trends, and trends tend to persist.”
– Jonathon Hoenig, hedge fund portfolio manager

 

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MarketCycle Wealth Management | Stephen Aust
MarketCycle Wealth Management, LLC is a Registered Investment Advisor. Information presented is for educational purposes only, is not considered an individualized recommendation or personalized investment advice, may not be suitable for everyone and does not intend to make an offer or solicitation for the sale or purchase of any securities. All investments involve risk and unless otherwise stated, are not guaranteed. Past performance or performance charts are not a guarantee of future performance. Portfolio performance charts are shown net of fees so the management fee, brokerage fees, trading fees and ETF fees have already been subtracted. Current performance may be higher or lower than that shown and differing accounts may show different results. Investment returns and principal value in client accounts will fluctuate. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Be sure to consult with a tax professional before implementing any investment strategy.