Quotes from three great value investors support this thought.
“Be fearful when others are greedy, and greedy when others are fearful.” Warren Buffett
“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” Ben Graham
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” Charlie Munger
We do not have to be brilliant to preserve our wealth. When it comes to investing, discipline can make you smarter than the smartest man in the world.
Sir Isaac Newton is widely regarded as one of the most influential scientists of all time. His role was key in the scientific revolution.
His book “Mathematical Principles of Natural Philosophy” laid the foundations for mechanics.
He supplied a foundation to optics.
He helped develop modern calculus.
Newton formulated the laws of motion and gravitation and confirmed the heliocentric model of the cosmos.
Newton built the first practical reflecting telescope.
His theories about color and cooling and the speed of sound were spring boards in physics.
In math, Newton contributed to the study of power series, the binomial theorem to non-integer exponents, and a method for approximating the roots of a function.
He is said to have been the greatest genius who ever lived!
But Sir Issac Newton also lost his shirt in the stock market. His comment was “I can calculate the motions of the heavenly bodies but not the madness of the people.“
Sir Issac forgot the intelligence in seeking value. He ignored the fact that buying and selling discipline is more important than being smart.
How can we gain this discipline? Discipline comes from simple math which is why two of the three exports I use in my Purposeful investing course (Pi) and mathematicians not economists. I am happy to introduce an investing math program that instills investment discipline in our Pi course.
Use math, not emotion to protect your wealth.
There are time tested mathematical systems that can help you know when to take profits that maximizes gains and minimizes loss.
These systems help you seek value but also create disciplined exit strategies because one of the toughest decisions most of us have is to know when to sell a rising or falling share.
Human nature makes it harder to let winners run, than to cut loses.
Let’s look at a real time example of how purposeful investing strategies can increase profit. In this real example, in 2002 Merri and I invested in Jyske Bank shares. We were visiting the bank with a group of readers. We had been in Copenhagen for several days and took the group out to the bank’s headquarters in the small charming village of Silkeborg. We visited the CEO (who has been a friend for many years) in his new modest offices, saw the bank’s new currency trading room and visited with the Jyske Invest Fund Managers. What impressed us was the conservative and balanced thinking throughout the bank. There were no staff limos or corporate jets. The CEO’s office was small with walls of glass so staff could see him at work. The bank worked for and talked about the long term view.
Jyske Bank share price since September 2002.
We invested in Jyske shares at DKK96.50 on 2nd September 2002. We sold half in April 2006 at DKK352.50. The share price of the remaining shares we hold have never dropped below our purchase price. Today the share price is over DKK300 again.
Could I have done better with a mathematical system? I asked Dr. Richard Smith, CEO of Tradestops.com, who has a PhD in mathematics and is one of the experts we use in our system, to see how his trailing stops strategy would have increased my profit.
It turns out I could have done better. Much better. Here is the chart of the trailing stops that his strategy would have given me had I been using it.
Click on image to enlarge.
Let’s look at three scenarios to show the difference in profit between using simple buy and hold with no stops, my system of taking back the original investment and the Trailing Stops strategy. For simplicity sake, I am not including dollar to Danish kroner fluctuations. The forex fluctuations would make a difference if calculated in US dollars performance but we’ll analyze that element of the invest in another message.
Scenario #1: DKK100,000 becomes worth DKK350,158. Profit is DKK241,880 in 15 years. In this scenario we assume a DKK100,000 investment. The investment is at DKK96.50 so 1036 shares were purchased. The assumption in this scenario is that all the shares have been held. The price of today’s quote (April 23, 2015) is DKK330. The value is DKK341,880 on DKK100,000 invested.
Scenario #2: DKK100,000 becomes worth DKK357,679. Profit is DKK247,840 in 15 years. Assume again, DKK100,000 investment. 1036 shares were purchased at DKK96.50. In this scenario, (what I actually did), 285 shares when the price reached DKK352.50. This returned my original investment appx. DKK100,000. The remaining 751 shares at 330 (4/22/2015 price) are still held so are worth DKK 247,840. This represents a total profit of 247,840. This is a little better than keeping all the shares, except the shares sold in 2006 created new opportunity potential for nine years so this scenario is actually much better than the numbers appear.
Scenario #3: DKK 100,000 becomes worth DKK1,156,069. Profit is DKK1,056,069 in 15 years. As in the other two scenarios there was a DKK100,000 investment. 1036 shares were purchased at DKK96.50.
Dr. Smith, backtracked to and see what the system would have done would with this share.
Richard sent the exact dates with buy and sell numbers:
Exit @ 325.50 on 6/13/2006. All the shares are sold bringing in DKK337,218.
Buy @ 321.98 on 10/9/2006. The DKK337,218 buys 1047 shares.
Exit @ 404 on 6/8/2007. This sale grosses DKK422,988
Buy @ 118.5 on 3/20/2009. The DKK422,988 buys 3,569 shares
Exit @ 170 on 8/10/2011. This sale grosses DKK606,730
Buy @ 173.40 on 2/1/2012. The DKK606,730 buys 3,499 shares
Still in @ 330.4 on 4/22/2015. The share value at this time is DKK1,156,069.
Wow, what a difference if one followed and used the trailing stops. The trailing stops and re buy signals increase the investment by 11 times versus 3.5 times in the other scenario.
The Jyske shares have a volatility quotient at this time of 15.5% so would create a sell signal at around DKK287 at this time.
These scenarios are based on approximations and do not include trading costs, management fees, etc. so the real money in the bank would not be exactly this amount. For our analytical purposes this study suggests that trailing stops help us protect the successes we gain in spurts.
This type of math creates great discipline so you know not to sell too soon and give away profit but, also know not to hold too long and give away returns already made.
Yet using trailing stops only works when you have good shares to begin.
To easily spot good value, we use Keppler Asset Management as our first source of data. We follow the analysis of our friend, Michael Keppler.
Michael Keppler is an expert on stock market value and I have worked with him for nearly 30 years because the best way to create long term multi currency investment profits is to get good value in the shares you buy.
Michael continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. He compares each major stock market’s history. From this he develops his Good Value Major Stock Market Strategy, an analysis that is rational, mathematical and does not worry about short ups and downs.
Michael Keppler. In my opinion, Michael is one of the best market statisticians in the world.
Numerous very large fund managers use his analysis to manage funds. In January, his company, Keppler Asset Management, was, for the third consecutive year, named Best Fund Company in the Fund Specialists’ category by Capital, a leading German business magazine. Keppler’s firm was one of only six out of 100 companies tested that received the highest five-star rating based on an independent evaluation of fund quality, management, and customer service by Feri Rating & Research and Steria Mummert Consulting.
Yet you have not heard about Keppler nor can you hire his services because he only serves mutual funds and institutional investors for investors in Europe.
This is why I want to introduce you to our Purposeful investing Course (Pi) with this special offer.
Investing Beyond the BoomWarren Buffet once warned against the Cinderella effect.
He said “Don’t be fooled by that Cinderella feeling you get from great returns. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know the party must end but nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Cinderella may have lost a shoe when she fled the party to meet a midnight curfew. We can lose much more when we rush from a crashing stock market.
Most investors face emotional dangers that build in rising markets.
Almost everyone feels good.
But the clock of economic reckoning is ticking.
No wants to see it. Nothing rises forever and especially… not everything at the same time.
Yet no one wants to leave the party until the end.
But many edge closer to the door.
When the clock chimes there could be a stampede even though leaving in a hurry may be the worst way to go.
Here are seven steps that can help avoid this risk.
- Choose investments based on markets instead of shares.
- Diversify based on value.
- Rely on financial information rather than economic news.
- Keep investing simple.
- Keep investing costs low.
- Trade as little as possible.
- Make the decision process during panics automatic.
One strategy is to invest in country ETFs that easily provide diversified, risk-controlled investments in countries with stock markets of good value. These ETFs provide an easy, simple and effective approach to zeroing in on value. Little management and less guesswork is required. The expense ratios for most ETFs are lower than those of the average mutual funds. Plus a single country ETF provides diversification equal to investing in dozens, even hundreds of shares.
A minimum of knowledge, time, management or guesswork are required.
The importance of…
Keeping investing simple is one of the most valuable, but least looked at, ways to avoid disaster. Simple and easy investing saves time. How much is your time worth? Simple investing costs less and avoids fast decisions during stressful times in complex situations where we are most likely to get it wrong.
Fear, regret and greed are an investor’s chief problem. Human nature causes investors to sell winners too soon, and hold losers too long.
Easy to use, low cost, mathematically based habits and routines help protect against negative emotions and impulse investing.
Take control of your investing. Make decisions based on data and discipline, not gut feelings. The Purposeful investing Course (Pi) teaches math based, low cost ways to diversify in good value markets and in ETFs that cover these markets. This course is based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.
Enjoy Repeated Wealth With Pi
Pi’s mission is to make it easy for anyone to have a strategy and tactics that continually maintain safety and turn market turmoil into extra profit.
One secret is to invest with a purpose beyond the immediate returns. This helps create faith in a strategy that adds stickiness to the plan.
Another tactic is to invest with enough staying power so you’re never caught short.
Never have to sell depressed assets during periods of loss.
Lessons from Pi are based on the creation and management of Model Portfolios, called Pifolios.
The success of Pifolios is based on ignoring economic news (often created by someone with vested interests) and using financial math that reveals deeper economic truths.
One Pifolio covers all the good value developed markets. Another covers the emerging good value markets.
The Pifolio analysis begins with a continual research of 46 major stock markets that compares their value based on:
#1: Current book to price
#2: Cash flow to price
#3: Earnings to price
#4: Average dividend yield
#5: Return on equity
#6: Cash flow return.
#7: Market history
This is a complete and continual study of almost all the developed major and emerging stock markets.
This mathematical analysis forms the basis of a Good Value Stock Market Strategy. The analysis is rational, mathematical and does not worry about short term ups and downs.
This strategy is easy for anyone to follow and use. Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.
Learn how to invest like a pro from the inside out.
At the beginning of 2019 my personal Pifolio is based on select ETFs in the Keppler Developed and Emerging markets. My Pifolio is invested in Country ETFs that cover seven developed and three emerging markets:
Don’t give up profit to gain ease and safety!
Regardless of economic news, these markets represent good value and have been chosen based on four pillars of valuation.
- Absolute Valuation
- Relative Valuation
- Current versus Historic Valuation
- Current Relative versus Relative Historic Valuation
When you subscribe to Pi, you immediately receive a 120 page basic training course that teaches the Pi Strategy. You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.
You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years. Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.
Included in the basic training is an additional 120 page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets). This analysis looks at the price to book, price to earnings, average yield and much more.
You also receive two special reports.
In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich. Some of my readers made enough to retire. Others picked up 50% currency gains. Then the cycle ended. Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview. He said: Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!
I did well then, but always thought, “I should have invested more!” Now those circumstances have come together and I am investing in them again.
The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar. The two conditions are in place again!
30 years ago, the US dollar rose along with Wall Street. Profits came quickly over three years. Then the dollar dropped like a stone, by 51% in just two years. A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.
This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago. The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.” This report shows how to earn an extra 50% from currency shifts with even small investments. I kept the report short and simple, but included links to 153 pages of Good Value Stock Market research and Asset Allocation Analysis.
The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000). There is extra profit potential of at least 50% so the report is worth a lot.
This report sells for $29.95 but in this special offer, you receive the report, “Three Currency Patterns for 50% Profits or More” FREE when you subscribe to Pi.
Plus get the $39.95 report “The Silver Dip” free.
With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years. The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV). The second event is that the silver gold ratio hit 80, compared to a ratio of 230 only two years before.
In September 2015, I prepared a special report “Silver Dip 2015” about a silver speculation, leveraged with a British pound loan, that could increase the returns in a safe portfolio by as much as eight times. The tactics described in that report generated 62.48% profit in just nine months.
I have updated this report and added how to use the Silver Dip Strategy with platinum. The “Silver Dip” report shares the latest in a series of long term lessons gained through 40 years of speculating and investing in precious metals. I released the 2015 report, when the gold silver ratio slipped to 80. The ratio has corrected and that profit has been taken and now a new precious metals dip has emerged.
I have prepared a new special report “Silver Dip” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.
You also learn from the Value Investing Seminar, our premier course, that we have been conducting for over 30 years. Tens of thousands of delegates have paid up to $999 to attend. Now you can join the seminar online FREE in this special offer.
This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning. You can listen to each session any time and as often as you desire.
The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.
Tens of thousands have paid up to $999 to attend.
This year I celebrated my 52nd anniversary of writing about global investing. Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades. This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.
Stock and currency markets are cyclical. These cycles create extra profit for value investors who invest when everyone else has the markets wrong. One special seminar session looks at how to spot value from cycles. Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.
The effect of war cycles on the US Stock Market since 1906.
Bull and bear cycles are based on cycles of human interaction, war, technology and productivity. Economic downturns can create war.
The chart above shows the war – stock market cycle. Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine, production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet. The military technology shifts to domestic use. A boom is created that leads to excess. Excess leads to correction. Correction creates an economic downturn and again to war.
Details in the online seminar include:
* How to easily buy global currencies, shares and bonds.
* Trading down and the benefits of investing in real estate in Small Town USA. We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.
* What’s up with gold and silver? One session looks at my current position on gold and silver and asset protection. We review the state of the precious metal markets and potential problems ahead for US dollars. Learn how low interest rates eliminate opportunity costs of diversification in precious metals and foreign currencies.
* How to improve safety and increase profit with leverage and staying power. The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website. This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power. At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.
Use time not timing.
Time is your friend when you use a good value strategy. The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.
A 45 year portfolio study shows that holding a diversified good value portfolio (based on a good value strategy) for 13 month’s time, increases the probability of out performance to 70%. However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.
Learn how much leverage to use. Leverage is like medicine, the key is dose. The best ratio is normally 1.6 to 1. We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.
Learn to plan in a way so you never run out of money. The seminar also has a session on the importance of having and sticking to a plan. See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk. Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.
The online seminar also reveals the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value. The keys to this portfolio are good value, low cost, minimal fuss and bother. Plus a great savings of time. Trading is minimal, usually not more than one or two shares are bought or sold in a year. I wanted to find the very least expensive way to create and hold this portfolio so I performed this test.
I have good news about the cost of the seminar as well. For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price, but online the seminar is $297.
In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.
Save $468.90 If You Act Now
Subscribe to the first year of The Personal investing Course (Pi). The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription. Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip” and our latest $297 online seminar for a total savings of $468.90.
Enroll in Pi. Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away.
#1: I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.
If you are not totally happy, simply let me know.
#2: I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.
#3: You can keep the two reports and Value Investing Seminar as my thanks for trying.
You have nothing to lose except the fear. You gain the ultimate form of financial security as you reduce risk and increase profit potential.
Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.
Subscribe to a Pi annual subscription for $197 and receive all the above.
Your subscription will be charged $299 a year from now, but you can cancel at any time.