I’ve toyed around for the past few months with the idea of tracking the effectiveness of our forecasts. Since we started offering memberships again this week [AVAILABLE HERE*], it seems the logical thing to do. Folks want to know what they’re buying.
For those who don’t know, I stopped offering memberships in 2013 when I took time off to start and manage a hedge fund. It didn’t work out as well as I had hoped. I’m really, really good at forecasting [see: 2012-2013 Results] — not so much at trading.
For one thing, it had been a while since I had managed a portfolio of other people’s money. It was harder than I expected, especially since most of my investors were friends and family. And, though I had some solid service partners, I was routinely working 70-80 hour weeks trying to keep up with the paperwork.
There were other issues, too, such as the “markets” evolving from occasionally to constantly manipulated — by everyone from central banks and their proxies to predatory high-frequency traders. It has taken a while to learn how to anticipate their actions. But, the past six months have proven to me that it can be done.
The bottom line is I enjoy analysis more than I enjoy trading. Puzzling things out, finding patterns, discerning the hidden mechanisms at work — these things are a lot of fun for me.
When I stopped taking on memberships, the site was attracting about 2,000 investors daily. Members were paying up to $1,800 annually. My hope is that enough former members — as well as some new ones — will return to the fold that I can make the site the entire focus of my professional life.
While I’ll no doubt take on a few institutional clients, I’m not keen on going back to work for one of those Wall Street firms that has, in my opinion, so badly screwed up the financial markets.
To active investors: in the spirit of making calls more obvious and easily verifiable, I’ll resume using the blue boxes to highlight future forecasts. For newcomers, they look like the one below (from one of our better shorts on September 14, 2012):
I will tweet a notice of each position change (not the actual forecast, but a notice to check the site.) So, if you haven’t signed up to follow @pebblewriter yet, it would be a good idea to do so. It will give active traders a chance to get the information fairly quickly. I’ll also look into a texting service for those who are interested.
For buy and hold types, I’ll use the Current Forecast page [CLICK HERE] to keep you up to speed on larger, longer-term trends. I’ll also tweet and email notices when things change.
A few technical notes about how results are calculated…
- These are theoretical, not actual, trading results that assume the S&P 500 index (SPX) is bought or shorted based on signals generated by my research.
- This data includes the price at which I made the initial call, the forecast price(s) and the results. Prices are believed, but not guaranteed, to be accurate.
- Assumes no leverage (100% long, 100% short or 100% cash) and no dividends.
- Any gain/loss is limited to no more than the forecast price; e.g., if I forecast a rally from 2050 to 2060, but it runs up to 2065, I’ll only take credit for the 10 points up to 2060. The only exception is when I post an amendment to the original forecast.
- I recommend using reasonable stops and being very cautious about open positions overnight or over weekends. What’s a reasonable stop for one investor might not be reasonable for another. But, we’ll assume a 1% stop loss from “trade” inception.
- Past results are not necessarily indicative of future results. See Disclosures and Use Agreement for important information.
It’ll take a while to go back and identify each long/short call and tally the results. I’ll work backwards until all six months of 2015 are posted. With that out of the way, here are the June 2015 results:
* We’ve had so many requests for this data since announcing the availability of memberships that we’re extending the discounted pricing through Saturday, July 4. For more info, CLICK HERE.