Literature shows that 80% of investment returns come not from stock selection but from being on the right side of major trends.
Bob has combined his extensive knowledge of mathematics, physics, and pattern recognition to develop a model, 10 years in the making, that analyzes past trends and forecasts the future of the stock market. Utilizing bobsstocks.com private members only website, Bob illustrates four different strategies that follow the Model Method (MM) at different levels of risk. He writes two monthly newsletters: Bob's Stock Market Weather Forecast and Bob's Dividend Plus - both based on the Model Method (MM). These strategies are presented in the Newsletters to illustrate the power of trends. Bob uses these strategies himself and shares his market and stock predictions with members of bobsstocks.com. The MM has been in action since 2000 and correctly predicted the crashes in 2000, 2003, 2008 and the most recent mini crash in August 2015. Being out of the market during big downtrends and in the market during big uptrends is why following the 8 signals since 200o would have resulted in a 400%+ return.
Bob's Stock Market Weather Forecast
Following Strategy 1, the lazy persons strategy, for the first half of 2017 would have resulted in a 9% return on the capital invested on that date including dividends! Strategy 2, a more active strategy looking for 5%-10% market changes, was also up 9% in the first half of 2017 but took only two thirds the risk of Strategy 1. The risk adjusted return therefore was equivalent to 12%! Strategy 3 invests in my top 10 stocks and is the most active strategy. In the first half of 2017 it was up 8.1% and had a risk adjusted return of about 12%.
Since this Bull Market began in 2009, Strategy 1 is up 234% plus approx. 17% cash paid in dividends with a lower risk than the SPY!!
Strategy 1 has only 2 possible positions: 100% cash or 100% invested in the SPY (S&P 500 Exchange Traded Fund). Over a 14 year time period money is invested in the SPY about 2/3 of the time and in cash about 1/3 of the time depending on Buy or Sell signals generated from the MM. These signals occur when the MM predicts a 20% or more move in prices either up or down.
Strategy 2 is similar to Strategy 1 except it times the market based on pattern recognition for 10% moves in either direction. It too can have only two positions - cash or the SPY depending on the direction of 10% trends.
Strategy 3 uses pattern recognition to choose 10 stocks or ETFs that are predicted to beat the S&P 500 performance. These stocks and ETFs are selected on December 27th each year. The 2017 list is live on this website now.
Bob's Dividend Plus Strategy
Bob's Dividend Plus Strategy since inception on 1/3/2012 has returned 61% appreciation including cash dividends. In 2016 , this strategy was up 9% including dividends!
The Model in Action
This chart illustrates the power of the Model Method. The bars depict the Model’s prediction of the S&P 500 by month, starting January 2012. This entire prediction was made in late 2011. The line overlay represents the actual movements of the S&P 500. While not perfect, the Model Method has been surprisingly accurate in predicting major trends and changes in the market. Remember, this entire year-long projection was made with one prediction. Bob's newsletters are updated monthly, making the month to month predictions as trends evolve.
History of the Model Method (MM):
In 1990 Bob became intrigued by how the skill of pattern recognition he learned in climate and weather forecasting and satellite image analysis could be integrated to create a tool that would help determine market trends that last from 3 months to 3 years. This marked the beginning of a 10-year process to develop the Model Method (MM).
Using fractal geometry, mathematical sequencing, pattern recognition and pattern matching to key non mathematical parameters, Bob was able to begin seeing good results in predicting major trends and catching the largest parts of these trends to improve his skill as a stock market investor. From 2000 to date he used this MM to consistently be on the right side of major trends and avoided the majority of both crashes since 2000 while capturing the latest Bull Market which is now the 3rd greatest in history. Cumulative returns for Strategy 1 from 1/1/2000 to 7/14/2017 is 432% plus dividends not reinvested of about 31%! Despite two major stock market crashes since 2000 this is an amazing result considering how little effort one has to expend in managing this strategy.
While no method is perfect, Bob’s proprietary MM approach is a refreshing Non-Wall Street look at the markets and stocks that out perform the S&P 500. Taking emotion out of investing is key and the MM is a tool Bob uses to help do just that. “The Trend Is Your Friend Until It Ends”.