I just made a chart showing the equity line of the model portfolio for Oracle on Wilshire trades. And gosh, it looks darn good. You get caught up in the details of daily trades, and can lose sight of the big picture.
One of the things I like about this equity line is that there is very little drawdown. Now I don’t know about you, but if my trades are going down for any length of time, I lose confidence in the system, and stop trading it. High on my list of checks for a system I’d like to trade is low drawdown.
I had not looked at the Oracle on Wilshire trades in this graphical way before, and now I’m really glad I did the calculations, because a picture is worth a thousand spreadsheet lines!
A $200,000 portfolio with a 5% investment in each theoretical trade (2.5% for stocks under $20; 1.25% for stocks under $10) would have gained 25.47% in the same time period, excluding transaction costs, with an average investment of between 20% and 50% of available cash.
Now here is what Benjamin, the man behind the Oracle, has to say about the Oracle’s trading philosophy:
|Have you ever wished you could just buy stocks when they are about to go up and sell them when they are about to go down? How much would you be ahead if you had gotten out of the market in September, 2008 and bought back in March, 2009? An extra 200%, right?
Conventional wisdom says you can’t time the market. We say “Nonsense”. Maybe that was true at one time, but with the modern chart technologies available today, it is certainly not so anymore.
I have spent the past ten years developing a reliable indicator that will tell me with a high degree of accuracy when is the best time to buy and perhaps even more important, when it is time to get out.
Does it work all the time? Of course not. Does it work on every stock? No, it doesn’t. But it works enough of the time on enough stocks to be very profitable.
We have developed an algorithm that actually works. We have a group of stocks we follow, on which that algorithm has been back-tested for up to 15 years (or as long as the company has been public), and proved to gain at least $1.50 for every dollar lost.
Many of our stocks have generated more than $2.00 for every dollar invested, and some much higher. It is not a large group. It is certainly not every stock. But it works.
More important, it gets us out of the market, reliably, before major declines. And it is a low risk strategy. We do not ride losses down. The biggest loss we have taken is under 7%. Our average loss is less than 3%.
(Amber’s comment on this last sentence: !!!!!)
Our average trade result has been a net gain of 3.5% in less than 9 days. Out of 173 trades, only 44 trades resulted in losses greater than 1/2 of 1% per cent. Most of those have been less than 2%.
We have had 38 trades that returned gains between 4% and 24%, and half of those returned more than 10%. One trade returned 79%.
That is why we are on track to gain over 40% this year. That is without ever being more than 60% invested at any one time, and on average only about 20%.
So the idea is this: we believe that our strategy can generate returns of up to 40% per year with a maximum risk to the portfolio of not more than 10%. Does that make sense?
How do you know if it is real or just a bunch of b.s.? Subscribe. Right now. It will cost you $1.00 for the first month. Just follow our trades. If you don’t agree that this is a great trading system, cancel your membership. If you continue, it will cost you only $19.97 per month to get the newsletter and the trades in real time (this is a limited time offer that will eventually cost more). That is an unbelievable offer, isn’t it? Try it, right now. For $1.00.
If you’d like to take Benjamin up on that, just click here. And find out for yourself.