Benjamin Graham said: “To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.” Graham was a value investor who studied, in detail, the companies worthy of investing.
I never met Ben Graham, but at university where I was fortunate to graduate summa cum laude in the business school, earning the Wall Street Journal Student Achievement Award, I studied Ben Graham’s text books more than any other. My finance professor was Dr. Basil Healey, then Dean of the Business School. Although he was the most demanding teacher I ever encountered, he was my inspiration during those academic years, largely because he pushed me to learn the teachings of Ben Graham. I went forward to earn an MBA with a major in economics and two professional accountancy designations.
Years later, my mentor and business associate Ian Notley, taught me the art of technical analysis, which combined with Ben Graham fundamentals, my studies in economics and my accountancy training, helped me to develop a holistic approach to investment analysis and decision-making. As computer technology and databases developed, I applied statistical analysis to my work, which some refer to as quantitative analysis. At the end of the day, I learned a few things that I am pleased to pass along to others.
I think the Ben Graham quote I used as the focus for this blog is highly accurate. Portfolio performance is what we are seeking and what we need; but, for most people, it’s evasive, out of reach year after year. In my view, there are a couple reasons why people are losing. Because Ben Graham was a master at studying companies, I highly doubt whether he would ever have bought a mutual fund or exchange traded fund, which are products of financial services companies, the same ones that are getting wealthier as their customers are getting poorer. Moreover, the customers are not investing; they are trading. Worse, these so-called traders are competing against highly advanced computer systems designed to beat them, and the powerful owners of these systems control the funds and now control the legislators and the mainstream media of all economically advanced nations. The public has been brainwashed into believing they are going to be successful in their capital markets endeavors, which will not happen unless they learn the art and science of investing.
As Ben Graham said, achieving acceptable performance is not difficult, but also harder than it looks. In my case, I knew I needed to develop computer models and databases that could compete effectively against those of Humongous Bank & Broker, our supposed trustworthy financial agents who are trading against us, and winning. Although competing against the world’s most powerful organizations is a daunting task, I know that a small band of guerilla fighters has repeatedly won against all odds and, because it’s personal, will continue to do so. However, winning at anything important and competitive requires thinking smart and working hard.
Today, my database contains over 35,000 stocks, 15,000 ETFs and 25,000 mutual funds that trade on over 125 securities exchanges in about 85 countries. Much of this data is inputted and computed daily, some of it in real-time. This is my system, not one offered to me by a financial services company that can effectively model my trading to steal from me. I derive the data from numerous sources and can change my systems on the fly as conditions warrant. I can develop new research and trading models at will. I am, in a word, independent.
In combination with another person who shares my views as well as a strong education and work experience, Dr. Owen Williams and I will start 2017 in partnership. Owen, who is 32 years younger than me, will be the driving force behind the day to day investing programs while I remain focused on the big picture. Together we will be publishing daily and weekly reviews on our website and for other publications and investment advisors. Financial editors who seek our independent and objective insights can call on us for quotes or articles. Individual and institutional investors can call to discuss our professional money management and premium subscription services. Importantly, our performance will be transparently displayed and we will show you why customers of Humongous Bank & Broker are failing to keep up.
In closing, today, I wish to make a comment about President Trump. His win was because of the people who desperately need change. His four-minute video of a speech he gave shortly before election day was in the words of my friends in Cuba where I am building my computer system, “awesome” and “inspiring.”
http://trump.news/2016-11-04-trump-exposes-hillary-like-never-before-video.html
Mark my words, however. Should President Trump fail to live up to his promises to give the people what they need, and should he instead revert to the conventional practice of the nation’s chief executive in supporting the establishment, there will be unimaginable internal strife that follows. The President brought the nation to this point with his rhetoric and now it’s up to him to earn the people’s respect with action he promised would happen. Forget the Middle East. Forget Russia. America’s problems or its solution will be internal.
Enjoy your weekend. The weather in Vedado today is spectacular. Tonight, my wife and I will be attending an art and fashion show in Old Havana. Life is changing here too!
/Bill
