Stack The Deck In Your Favor

20 years ago Riverboat Gambling changed my life.

 Back then I was in college. But lady luck would have it that
my college was exactly ¼ mile from the Mississippi River.

Riverboat Gambling had come to my college town.

I quickly learned that a card player could completely
change the odds of winning the card game
Blackjack if they learned how to “count the deck”.

A “high count” would stack the deck in the player’s favor.
A “low count” would stack the deck in the houses’ favor.

People who counted the deck cleaned up…and big.

This got me to thinking, could I count a deck of stocks?

I was 19 years old and I found my true calling…to learn how
to stack the ‘stock market’ in my favor.

Starting with this question in mind I began to lay the
foundation of what today is the best investment course ever,
The Millionaires Academy.

To find out more about how to stack the deck in your favor
read on.

Since 1993 I have been, testing, researching, and counting…everything I could find that can be measured in or about the stock market.

I’ve personally tested, valuation indicators, sentiment indicators, interest rates indicators, demographic indicators, technical indicators and behavioral indicators and what I found that worked best for growing money in any climate were three things…

 …AND ONLY THREE THINGS

First: The prevailing trend is the single biggest indicator of future price movement.

Second: Mastering the skill of knowing what information is trivial and deleting it.

Third: The ability to manage losses properly.

The results from my research created the following algorithms more than a decade ago.

Please take a minute to look at the chart below.

The chart below compares three Fearless Wealth Algorithms against the S&P 500 over a one, three, five and ten year period.

The three Fearless Wealth Algorithms are identified by “L-TEC” “MP” and “MOS”.

Type                           1yr return     3yr return     5yr return     10yr return
S&P500                     12.9%                  -12.6%                 6.7%                    8.5%
The L-TEC                 50.4%                 91.2%                  304.3%               649.7%
The MP                       25.8%                 33.8%                  94%                     360.6%       
The MOS                    20.6%                0 .3%                    43.1%                  215.2%         

Understanding how to count the stock market matters above everything.

 If investors who have lost over the past decade feel like the “deck has been stacked” against them they are correct.  The house won.

 But for a few, “the card counters” or in this case the “stock counters”, the past decade has been remarkably successful.

 Let me reveal a little bit about the Fearless Wealth Algorithms that have been beating the “house” for over a decade.

 1)    The L-TEC Investment Algorithm
L-TEC stands for Long-Term Economic Cycles. Cycles can be found all over nature including the investment world. The two cycles that drive EVERYTHING in the investment world are the Paper Asset Cycle (stocks) and the Physical Asset Cycle (commodities).

The L-TEC algorithm signals which long-term cycle we are in and what specifically to buy while in that cycle. 

Its ten year return is 649.7% (S&P 500 grew 8.5% during the same period).

 2)    The MP Investment Algorithm
MP stands for Market-Probability. There is a probability to making or losing money in the stock market. When the probability is high then investors want to be fully invested in the markets.

And when the probability is low, investors are best served by being out of the market completely.

The MP Algorithm determines what the probability of making or losing money is in the stock market and then signals where and how to invest.

Its ten year return is 360.6% (S&P 500 grew 8.5% during the same period).

 3)    The MOS Investment Algorithm
MOS stands for Margin of Safety. Margin of safety is a term coined by Benjamin Graham, the father of value investing, in 1934.

The MOS Investment System buys dollars for seventy cents. The thirty cent difference is the investor’s margin of safety.

Its ten year return is 215.2% (S&P 500 grew 8.5% during the same period).

 So which algorithm (or approach) is best for your money?

 Please note, I never use terms like, this is a ‘conservative’ approach or this is an ‘aggressive’ approach because those words have more to do with the investors’ feelings than what is actually happening in the stock market.

 In all my years of research I’ve found that responding to what is happening in the market is more important than how an investor may feel about what is happening. Feelings need to be managed and understood, which my clients learn how to do, but that is a topic for another day.

So let me describe the above algorithms a bit differently:

 The L-TEC Investment Algorithm is for investors who want their money invested appropriately in the prevailing long-term cycle.

 The frequency of changing positions is low, which means it requires the least amount of an investors’ attention.

 This approach is great for individuals that do not follow the weekly or even monthly moves of the market but want to make sure they have a proven long-term investment approach that protects them from inflation, deflation and any economic turmoil.

 The MP Investment Algorithm was specifically designed for 401(k)s, 403(b)s, Annuities and 529s.  And even though this approach was designed for accounts with very limited choices, it is also used in brokerage accounts.

 The frequency of changing positions is low, which is typically a great fit for professionals who lead full lives.

 The MOS Investment Algorithm is for investors who believe in deep value or Margin of Safety investing.

 More than any of the algorithms, this approach is most closely related to traditional deep value investing. This approach is great for individuals who may want less frequency in changing positions with their investment approach.

 So which one is best for your personality?

 Most likely it is a combination of them.

 Let me explain.

 Wall Street often talks about diversifying. BUT they only diversify investments and NOT investment strategies.

 This approach works for Wall Street but it produces very bad results for their clients.

 All of Wall Street (okay, only 99% of them) use the same investment approach – “buy and hold”.

 This is why most investors have lost money over the past decade.  

 Yes, investors may have been diversified into small-cap stocks and large-cap stocks and mid-cap stocks and international stocks and dividend-paying stocks and growth stocks and emerging market stocks and corporate bonds and muni bonds and government bonds and high yield bonds…

 BUT THEN…

 Wall Street put these investments all into the exact same “buy and hold” strategy.

 And this is why investors lost money EVEN IF THEY WERE “DIVERSIFIED”.

 Because investors were not diversified in the most important way.

 Strategy Diversification.

 Again, real diversity is diversity in approaches (or strategies) and NOT actual investments.

 You get the strategy right and you get everything right. You get the investment right but put it in the wrong strategy and you get everything wrong.

 This is why investors have lost money over the past decade!

 The more your money follows a diversified set of strategies the more your money will be protected and growing in any climate…even this one.

 Starting in seven days, I am taking a few select investors and teaching them the exact strategies.

 I’m leaving nothing out. These are the same strategies that have literally made people millionaires from the markets.   

 My 8 week highly-interactive-webinar is called The Millionaires Academy. Do you have what it takes?

 Together, we are growing and protecting your wealth,

rc

1 Comment

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    August 8, 2012

    I actually love that the manner you discuss this kind of topic.
    ,.