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Clear Thoughts
Spring Fever
| Are baseball and investing so different? |
With the kids attending birthday parties this weekend I was able to read the newspaper about one of my favorite topics. The articles were filled with controversy highlighting the up and comers and dramatizing the ones in decline. Ah, the predictions of greatness! There were so many forecasts that each author could slice and dice statistics to justify almost any position. The stories this week included amazing historical data along with juicy scandals involving drugs, fast women, money and corruption. Last but not least were the editorials and conjecture, highlighting who stands to gain from these scandals, and who could cover it all up.
I am aware that this sounds like the plot of an Oliver Stone movie. It is not, nor am I referring to politics or Wall Street. I was reading about our national pastime: baseball.
When taking into account the number of teams, players per team, farm teams and the calling up and sending down of players, adding all the personal data, team and divisional statistics, plus the permutation of how many games are played per week, the analogy to investing is not far fetched. Many fans and professional gamblers have tried to use quantitative measures to predict the outcome of seasons and individual games. As New Yorkers, we know that the Yankees have the biggest budget and highest paid players with the Mets not too far behind. Although getting into the playoffs and winning championships may sometimes seem to be a given for teams that have such high payrolls, the teams themselves and some of the players and coaches do not always cooperate, as over the last few years my friends in Boston, Chicago and Houston have ruefully reminded me.
Fans have taken matters into their own hands truly believing in their own statistical analysis and creating their own fantasy teams and leagues. They fill their rosters with the best statistically performing players: catchers, infielders, outfielders, pitchers and so on. They believe that through their own analysis of batting averages, slugging percentages, earned run averages, and the belief that this performance would continue, will enable them to assemble a winning team in their fantasy leagues.
You have been waiting for me to bring the discussion to investing, so here it is. At Clear Asset Management, we too create our teams: small, mid and large caps, each in their leagues of value and growth. We select our individual players, or stocks. One big difference is that we have much more powerful tools. Our stocks are selected purely though rigorously tested and finely honed computer programmed algorithms, and we perform stress tests on our systems regularly. We balance stars and laggards, without emotion or bias, sending poor performing players off the team until their statistics warrant another try at the big leagues. Every market day we send our best team onto the field, as dictated by our algorithms. Our all star team, comprised of the stocks we calculate to have the highest probability of beating the market, has won enough days to win our league, and in some time periods, make the playoffs of investing.
The view into our fantasy league is our three week trial. For those of you reading this post as voyeurs on a trial, we invite you to join our very real, major league of investing success. In that league, we work with live money entrusted to us by investors and help direct the accounts of our subscribers.
Of course at Clear Asset Management, investing is not a game. We play hard, all year, every market day, and for keeps!
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