As time went on in 2004 and 2005 I was increasingly frustrated. I was working incredibly hard, but my investment returns were not reflecting the fact. If anything, I was starting to underperform while the market was surging higher. I had big problem on my hands. After a lot of fundamental research I have determined that the real estate sector as well as the mortgage finance sector are set for a significant decline. Not just any kind of a decline, a once in a lifetime blow up. After reading and analyzing at least 100 annual reports I was sure of it. The “subprime” mortgage companies I was looking at were essentially bankrupt. I was sure the market will soon see the same and reward me with outsized returns.
I was wrong. Instead promptly collapsing the companies in question kept surging higher. Day after day, month after month and year after year. I could not wrap my head around it. There I was, looking at clear evidence that the “sub primers” in question are nothing more than a giant Ponzi Scheme , yet Mr. Market was rewarding them with ever increasing stock prices. That was my first clue that while the in-depth fundamental analysis can show me WHAT will happen with great accuracy, it fairly useless in identifying WHEN it will happen. It was not until 3 years later that the said companies did collapse in a spectacular fashion. Some losing $70-50 per share price within a 2 week period of time and then immediately filling for bankruptcy (summer of 2008).
I was right on the money, yet my timing work was way off. That lead me to spend a considerable amount of time searching for market timing solutions that work. If I can somehow identify the “WHEN” portion of the equitation, my investment returns should surge. It wasn’t long after I started that I came across the article below. It was a life changing revelation that showed that I can use modern science to predict the timing of individual stocks and the overall stock market with great accuracy. It was a life changing understanding and I had to explore it further.
(***I highly encourage you to read the article in its entirety to form your own opinion. The Ticker and Investment Digest was later renamed “The Wall Street Journal”).
To Be Continued Tomorrow…..
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