Categories
Uncategorized

How do most financial advisors treat their customers?

  • Little original thought is given to each client. They will take hours of your time getting all your information only to tell you that you are best off going 50/50. 50% stocks, 50% bonds, thank you and have a great day.
  • They are giving you a chance to come up with a goal, and hoping the market helps you out.
  • They do help out in one way: by pushing index funds. This is much better than actively managed funds.
  • Most financial advisors are really just salespeople. They are not versed in analysis of stock values, probabilities, mathematics, risk management, algorithms, or computer models.
  • They also push retirement goal dates. This can help you quite a bit if you haven’t considered retirement, but if you have, you pretty much know this already.
  • They are versed in asset classes to an extent and can tell you the difference between a convertible bond and a non-convertible bond (convertible bonds can be traded for stock).
  • My goal is to be what you think a financial advisor should be – a person who looks carefully at each invested stock and gives you a way to tell the true value.
  •  

      • Most people think this is what a financial advisor does. They do not usually do this.
      • Try to improve your investing.
      • My background is in analysis of stock values, probabilities, mathematics, risk management, algorithms, and computer models.

     

    To  invest with me is to invest in many different ventures, each of which not only can grow, but which demonstrates a mathematically superior chance to grow in the market. This will spread out any risk of failure while maximizing the chance for an awesome return. And the numbers and history back this up.

    My goal is to test many algorithms, but give you the benefits of the best that have a long history of proof that they work.

    What has that proof?

    On the order of proof over centuries, there is proof that investing in stocks of companies, returns about 8% per year, such as index funds, since the 1900s.

    Since at least 1960, it has been known and scientifically proven that investments in “low PE” stocks work better than the average market.

    My “412” algorithm have been working since 2012 and have shown results demonstrated on this page.

    Want a scientifically proven algorithm that finds the best investments?

    Categories
    financial advisor quant

    The simplest way to beat the market



    The simplest way scientifically proven to beat the market is value investing on Price over Earnings.

    Price Over Earnings, or P/E or just PE. What is it, and does it work, and why does it work?

    For every company, profit has been the goal. But what does that mean? Isn’t profit an evil capitalist lie to exploit the workers and keep them poor?

    Quite the opposite.

    If you are a farmer, profit = food. For millions of years, humans either “profited” by getting more food than they planted in the ground, or they simply died.

    Profit is a necessity for civilization, like food and water. It allows us to have this meeting.

    How much you profit vs. how much you have to invest is a good rule of thumb for embarking on an enterprise.

    When you divide the investment by how much you profit, that is Price (how much you pay) over Earnings (how much you gain).

    Companies tend to grow into relatively stable profits and expenses over time, leading to an expectation that we will gain, in the future, about what we did in the past.

    Thus, companies publish thousands of numbers. And there are thousands of numbers others calculate from them.

    But the P/E is the grand-daddy, the others are merely imitators. If you want to make money, and don’t have the time or energy to read all the literature, just invest in an index fund. They make about 8% a year on average from 1910s until today. That’s better than bonds, or most loans, and far better than inflation.

    If you want to beat the market, then invest in low P/E stocks. The average P/E is about 18-25.

    If we go back to the farming example, imagine that your farm, after you pay (feed) your people and animals, makes 5 cent profit a year for every $1 dollar invested to buy the farm.

    That would be a P/E of 20.  .05/1 = 20

    Not bad, and that’s after you haven’t starved to death. Great job, you can now do things like paying taxes and having children with that profit.

    Now imagine we have 10 farms we can invest in. They have PE ratios of 100,90,80,70,60,50,40,30,20, and 10. One has a PE of 10. That means the farm is making 10% profit each year, or 10 cents on every dollar.

    You guessed it, buy the farm with the best profits and you tend to do better than the average farmer!

    Similarly, you want the stocks that make the most money for their shareholders, and that means the lowest PE values.

    So, that’s what a good investor will look for.

    You need to look out for scams, unfortunately, and there’s no common way to do that. Most scams go on for years before they are caught.

    So spread out your investments, and look for companies that get steady good incomes.

    If you do that, and invest in the top 5th of all stocks in terms of p/e… you will gain about 12% a year in your investing on average, which will double your money 50% faster.

    It still helps to be able to read a balance sheet, however most actively managed funds are too consumed by the 10,000 numbers out there to grasp the simplicity of the P/E, and this has been shown.

    If you are investing in stocks on your own, there are two rules to keep in mind: Low PE, and buy the stock in the companies you buy things from, since they will do well in the future.

     

    Want a scientific algo that automatically does this for you to find the best investments?