How to Make a Stock Market Fortune in 2021


Do you have what it takes to cash in on Wall Street?

Many will say you (be careful) do.

And you do (but maybe not how you think) as I’ll explain in a moment.

But first, consider this?

Yesterday’s Wall Street Journal article “James Simons Steps Down as Chairman of Renaissance Technologies” (1) tells the story of why today, a majority of trading on Wall Street comes from quantitative and other “nonfundamental” stock traders, that use computer driven predictive algorithms to make investments.

The article says: James Simons, who helped lead a quantitative revolution that has swept the world of finance, is stepping back from his hedge fund on the heels of a terrible year for clients, but a terrific one for the firm’s employees.

Mr. Simons, among the largest financial backers of Democractic candidates in recent years, told investors he was retiring as chairman of Renaissance Technologies LLC’s board of directors as of Jan. 1.

A former math professor and code breaker, Mr. Simons built Renaissance into one of the most successful investment firms in history by helping develop a new way to invest.

In the 1980s and 1990s, when most of the investing world was reading annual reports, chatting with executives and relying on intuition, Mr. Simons decided to let computers make his trading moves. He and his colleagues—all from the worlds of math and science—built predictive models capable of uncovering unrecognized market patterns, partly using early versions of machine learning.

Eventually, Mr. Simons built a fortune of more than $25 billion.

So do we have what it takes to clean up on Wall Street? 

Can we build predictive models capable of uncovering unrecognized market patterns, partly using early versions of machine learning?  Plus can we implement these codes with super powerful, ultra fast equipment based in high rent districts near where stock market computers process trades?

Because that’s what it takes to cash in on shares.

Jyske-bank

I know I can’t.  Many years ago, when I worked with Jyske Bank (one of the largest currency, stock and commodity traders in the world) I had meetings in their trading hall.  I met with their top traders and the people who created their algorithms and IT experts who ran their equipment.

They had this huge staff of really bright people, many millions of dollars of equipment and they were set up to trade 24 hours a day.

Jyske-bank

Photo I took of Jyske’s trading hall

I had been investing the old way for decades, starting in Hong Kong in the 1960s.  “What in the world am I doing trying to compete with these guys”, I thought.

So I stopped trading with the realization I still had to be invested in shares.

Many will tell you they have the algorithms and will sell them to you.  Be careful of those promises.  Chances are those codes don’t really work.   Even if they did work, do you have the fast (and I mean really fast) equipment and 24 hour a day ability to execute orders?

My answer was certainly no, so I looked for another way to have an easy, low cost process of gaining maximum profit and safety with investments in equities.

I found a solution and put it to work five years ago we I began the Purposeful Investing Course (Pi). 

I had for years followed the global stock market analysis of Keppler Asset Management, (KAM) the best value analyst I have ever found.   In October 2015, I  conducted a seminar that featured  Michael Keppler the founder of KAM as a speaker explaining how his analysis works.  I have included a link to that speech at the end of this review.

Then mid December 2015 to start our analysis of the portfolio (Pifolio) we would create investing in country ETFs of Keppler Top Value countries, we invested $80,000 that we could track and report on to our subscribers so they saw the real deal, the genuine results  as they unfolded.

The goal was to make the process utterly simple, excessively inexpensive and safe in the long term.

Here are the results of that Pifolio after five years.

ETF                                                  Invested   Now    Gain    %

Global X FDS GLBX MSCI NORW  $6242    $8103   1861   29.3%
iShares MSCI ETF Brazil                   2597      3883   1286   45.8%
iShares MSCI ETF Chile                    2613      3151     538   20.5%
iShares MSCI ETF Colombia             2613      3274     661   25.2%
iShares MSCI ETF France                 6183       8307   2124   34.3%
iShares MSCI ETF Germany              6175      7637   1462    23.6%
iShares MSCI ETF Hong Kong          6174      7842   1668     27.0%
iShares MSCI ETF Mexico                 5488      5996     508     09.2%
iShares MSCI ETF Spain                   2989      3880      891    29.8%
iShares MSCI ETF Sth Korea            2559      4618     2059   80.4%
iShares MSCI ETF Australia              3196      4047       851   26.6%
iShares MSCI ETF Canada               7965       9857    1892    23.7%
iShares MSCI ETF Italy                     6175       7382    1207    19.5%
iShares MSCI ETF Japan                  6203       8106    1903    30.6%
iShares MSCI ETFMalaysia                 563         375    -188   -37.4%
iShares MSCI ETF Singapore            6189       7117     928    14.9%
iShares MSCI ETF Taiwan                 2596       4501    1905    73.3%
iShares MSCI ETF UK                       6201       6470      269      4.3%
iShares MSCI ETF China                  4066        5121    1055    25.9%

The $80,000 invested is now worth $109,667, a gain of $29,667 or a 37.08% gain over five years.  This works out at a 7.41% per annum gain before dividends which WERE NOT reinvested.

I failed to keep an accurate track of dividends received, but they have been running in the region of 2% to 3% per annum so the annual return over the past five years have been around 9.4% to 10.4%.

Though this is not as dramatic an increase as we have seen in some US market indices, I’m happy with the results because the Pifolio is based on the reality that value controls market prices in the long term.

If that return were randomly distributed, it would be hard for most investors to lose over the long term.  The reason so few win and so many lose is because stock price increases and drops are not randomly distributed.  There are long time-periods in which valuations steadily rise (with small drops mixed in).  There are also periods of sharp corrections.  During these times, when markets may be volatile, investors tend to panic and liquidate at the worst possible time.

The Pifolio over the past five years has been as steady as can be in such turbulent times, was incredibly diversified for safety and provided decent returns while locking in extra value potential.

Why the Top Value Portfolio has extra potential now.

There are three factors that give extra potential to the Pifolio now.

#1: The U.S. dollar has been in decline.  This is usually bullish for global risk assets and every investment in the Pifolio is currently in non USA markets.

#2: Value stocks have under performed their growth counterparts for 13 consecutive years.  Mean-reversion (value investments now over performing) is probable well into 2021 given the accelerating under performance since last December.

#3: Global major and emerging markets are drowning in net fund flows in late 2020. According to Bank of America, a record $89 billion flowed into stock funds over three weeks up to November 20, 2020.

These three factors could cause the Top Value Pifolio to rise dramatically in 2021.

We should not count on extra ordinary returns. We need to be realistic… but logic and math are on our side.

Most humans are not realistic!  Humans have a bias against risk that creates a performance gap.

We created Pi to face this fact and prepare for it.

The Pifolio above invests in 19 country ETFs.  These ETFs represent investments in hundreds of shares in the Top Value Markets.  There are few ways to gain greater safety though diversification. 

No one knows when the super heated US stock market, that is now at or near an all time high,  will slow.

What we do know is the value of the US market is low, compared to its history and to other stock markets around the world.

The table below shows how the Developed Markets Top Value Model Portfolio compares to three alternatives at the end of December 2020 based on selected valuation and return measures:

keppler

According to Keppler Asset Management’s analyses, the Developed Markets Top Value Model Portfolio is now undervalued by 39% compared to the MSCI World (Standard) Index, by 51% compared to the MSCI USA Index and by a whopping 68% compared to the MSCI World Growth Index.

The average developed market—as measured by the KAM Equally Weighted World Index—is undervalued by 29% compared to the cap. weighted MSCI World Index.

This next table below shows how the Emerging Markets Top Value Model Portfolio compares to three alternatives as of the end of December 2020 based on selected valuation and return measures:

keppler

According to Keppler’s analyses, the asset class Emerging Markets Equities is now undervalued by 21% compared to the MSCI World Index of the developed markets. Moreover, the Emerging Markets Top Value Model Portfoliois undervalued by 23% compared to the MSCI Emerging Markets (Standard) Index,by 39%compared to the MSCI World Index and by a whopping 57% compared to the MSCI EM Growth Index.

These numbers suggest that value shares will outperform Wall Street or at least US shares will under perform global shares at some time in the years ahead.

We just do not know when the shift will equalize values.

We can still see profits and growth in US shares and we will… until we won’t.

All stock markets have risk and volatility, but if you invest in the top value markets  you get the best value and creating and managing such a portfolio is easy.

This five year review shows that the Pifolio has seen steady growth and good income.

The review shows that the Pifolio has been safe.

Perhaps the biggest benefit has been the ease.  There have been no advantages to viewing this portfolio daily or even weekly.   A monthly checkup has been more than enough to keep the portfolio balanced.  There have been only a handful of changes in the Top Value market over the past five years.  This strategy of easy, long term investing stops us from getting daily jitters and most important, frees up time so we can enjoy life.

The three benefits of the Pifolio are; safety, maximum profit potential and more time to live.

Here’s how you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.  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.

You also receive a 100+ 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 of all 46 markets.

This year I will celebrate my 53rd anniversary of global investing and 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 the Pi course.

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 $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years, plus all new updates over the next year.

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 in the first two months for a full, no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery from the pandemic is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2022 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

Here is a reminder why Pi makes so much sense for us as investors. This core Pi information was presented by Michael Keppler at a value investing seminar in October 2015.

There are two documents as well as Keppler’s talk.   The first was a reprinted article of an interview with Michael in which he explained why most investors misunderstand risk.

Keppler asset management

Click here to read  Keppler’s Interview “A New Definition of Risk”

Keppler also delivered this 22 page PDF report at his speech in 2015.

Keppler asset management

Click here to read or download and print “Keppler’s 22 page “Top Value Strategy”

Keppler Video

Here is Michael Keppler’s one hour 40 minute presentation on Top Value Asset Allocation.

Gary

(1) www.wsj.com:  James Simons steps down as chairman of Renaissance Technologies