Our New Algo Goes Lives
Friday, 27 November 2020
By James Woodburn
[8 min read]
Last week, I pointed out the mailbag had gone quiet.
I asked for feedback, along with voicing an idea Greg and I had about creating a portfolio ‘scorecard’ for each of our services so you could see which is performing well…and which is lagging.
And this week…heaps of emails!
I’ll get to those in a second.
But first, I’m delighted to announce that our brand-new fully automated algo trading service with ‘financial engineer’ Peter Bakker (aka Chewbakker) is LIVE.
You’ve probably heard me say this before…but it’s a belter.
I’m trading it with my own money. (Within three months, I was up 11%…while the ASX 200 fell 2.9%.)
I’ve since topped up my account and I’ll be trading every single signal along with subscribers.
Chewbakker also uses it as the basis for managing his wife’s super.
And in backtesting, it generated some results that’ll raise eyebrows.
Of course, no system is perfect (and keep in mind that simulated backtesting is no guide to future results). Over a 13-year simulated backtest, we found the system did have drawdowns of 17%…
Yet the results didn’t show a single losing year and indicated a total return of 900%.
And the strangest part?
This system works using just two ticker symbols. That’s it. No trading hundreds of stocks or anything like that. Two tickers.
Sounds almost too simple, doesn’t it?
That’s what I thought.
Then I tried it myself.
And I’m delighted I did.
That’s why I’m making a big deal of this and urging anyone who’ll listen to give this a go.
And the best way to do that is to watch our full on-camera briefing below.
Fair warning: You’ll need roughly an hour free.
And for reasons I’ll explain, I recommend watching before Monday night (30 November).
Either click here or hit the play button below:
Now, the mailbag…
It seems the scorecard is a popular idea…
‘Yes, a score card for each service sounds like a good idea.’
‘I’d really value the comparative performance of the different services offered. It’s quite difficult to decide which ones to subscribe to sometimes: Budget limits leaving any capital to invest and the time to thoughtfully consider ALL the information. So many seem sooo good.’
‘I believe the scorecard is a great idea’.
‘Dear Woody, yes you should put out a scorecard each year — you used to and it was quite revealing. Cheers.’
‘I think the scorecard is useful tool, but it needs to spread over three years and as your clientele may have come on board at any time. I think you should also show the worst and best times in that period. This will give three results — one for the HODLers, one for the lucky and one for me.’
Yes! We absolutely will show the results of each service over a three-year, two-year and one-year time frame. No cherry-picking here.
By the way, for those that don’t know, ‘HODL’ means ‘hold on for dear life’.
Usually it’s in reference to the crypto market where you need to be a brave soul to simply buy and hold. You need to be prepared (and willing) to see 200%-plus spikes, followed by 50%-plus falls…
Laurence, I don’t know if you enjoy the spikes and falls, but it sounds like you a have a sense of humour! Good stuff and thanks for the email. (And look out towards the end of the year where we’re planning a crypto-focused event with Ryan Dinse.)
‘I reckon it’s a good time to revive the annual checkup. PPP used to do that a while back. Seemed like useful idea. Because I can’t afford to grab every pick from every service I subscribe to, I used the checkup to measure how well (or otherwise) I had done in selecting from the smorgasbord of tips on offer. Some years it was embarrassing! So, I am looking forward to measuring my ability to choose from what is already a carefully selected bunch of stocks. Mmm…’
Greg and I are looking forward to reviving it too, Kev.
But you raise a good point. We publish an array of different ideas via an array of different publications. There is no ‘one idea fits all’ or ‘one viewpoint for all markets’. There is no ‘house view’ either.
That’s on purpose, too. We believe the best ideas (and investments) come when ideas are allowed to compete in a free marketplace.
Most readers appreciate that. For example, Burke writes:
‘One thing that is great is that you don’t all agree on a position so gives a balancing effect, whether it’s Crypto, Gold or Cash there are plenty of points of view!! Again thanks.’
You’re welcome, Burke!
Of course, there are others that don’t get it. For example, Marcus writes:
‘Port Philip seems to pick more successful stocks than duds; so thumbs up!
But you let your entrepreneurial spirit screw with the interests of your subscribers, as you look for more ways to hive off existing subscriptions into more specialised areas.
‘For example, I subscribe to the “Australian-Small Cap Investigator” (ASI), and now you conjure up a new subscription called “Catalyst Trader” based on the Medici principle of getting information before others! But both trading systems look at small Australian stocks that fly under the radar of other investors and, as any financial consultants worth their salt, both should provide the same results…
‘…Another bête noire of PPP is Global Warming encapsulated in you issuing “The Australian Tribune: The Greatest Lie in Political History- Global Warming”. But, what have you done? You have launched the “New Energy Investor” based on sustainable energy sources supported by International companies believing that we must do something to counter global warming. If you believe that climate change is a hoax, will you begin a new subscriber service that identifies fossil fuel companies that will eventually be good investments in the future?’
First of all Marcus, thanks so much for taking the time to write in! It is much appreciated. You raised a few other points in your email, which was substantial, and we will address those points next week.
But the above were pertinent for today’s Insider. Good to hear you think we pick more winners than duds. Though I respectfully reject your assertion that we hive off existing subscriptions.
You highlight Australian Small-Cap Investigator and Catalyst Trader as an example, so let’s take a look at those first. While it’s true both services recommend small-caps, they are otherwise totally different.
For one, they are run by different experts, with different strategies and different objectives.
Australian Small-Cap Investigator is an entry-level service for those either new to the market or investors looking for a springboard of ideas from which to launch their own further investigations. The stocks tend to have a good business with fundamentals that support growth. The average time frame tends to be for around 18 months to two years per holding.
Callum Newman’s Catalyst Trader, on the other hand, is about one thing and one thing only: Anticipating an extremely short-term jump from an imminent announcement. All small-caps are high risk, but the stocks Callum trades are on another level. The average time frame for each trade can be anywhere from a few days to a few weeks. The stocks tend to be micro-size, and so cannot be tipped to thousands upon thousands of readers. Its higher price reflects that.
There are many more differences, but you get the point. We present ideas and strategies…and you have the choice what to subscribe to…or indeed not.
There is no ‘hiving’, I can assure you. We cannot force readers to respond to ideas. They choose to respond to ideas they deem valuable. And it’s our job to make our service as valuable as we can.
Therefore, our interests are only served if our customer’s interests are served.
You also mention the Tribune. That was an old publication that was folded before I took the helm. The author of that letter has since moved on. But I know the article in question. And it wasn’t saying climate change is a hoax. Of course the climate is changing.
The point it was making was that the whole issue is being politicised in extremely unhelpful ways. Anyway, I don’t want to get into that! The point ties into the one I just made. One person with one view wrote that publication. But does that mean our other editors, James Allen and Selva Freigedo — who believe the biggest investment opportunity of the next decade is in the companies making renewable energy possible — should not be allowed to research, write and recommend them?
My view is, of course they should.
And yes, if another editor we find comes along and has a strong argument for a value play in oil stocks…and has a compelling case to back up the idea…why shouldn’t we publish it?
Ultimately, our readers — YOU — decide what you think is valuable and what isn’t. You can decide what you’d like to subscribe to based on which idea appeals to you and suits your needs.
Isn’t that a good thing?
I think it is. I simply do not understand this incredibly cognitive-restricting concept that everyone has to think the same, have the same ideas…and hold the same view.
If everyone thinks the same, then no one is thinking at all.
And I guess one way to see which of the many ideas work the best is the portfolio performance of our many editors. Which brings me nicely back to the idea of the scorecard.
Karl makes a fair point and a great suggestion…
‘The way your portfolio of services is presented to potential subscribers seems unusual.
‘You apparently have something like 22 services available. If there is a list, with summaries, of your subscriptions, I haven’t managed to find it.
‘…I invest money to make money. Nothing else. Performance is everything, yet the performance of your services doesn’t seem to be proudly published by you. One would think that performance would be the key consideration for prospective subscribers?’
Karl, 100% agree. Our website and the way we summarise what each service offers is, frankly, ancient.
I can assure you this is something we will be finally getting right in 2021. We plan to do a wholesale re-vamp of the Port Phillip Publishing website, plus a few other major developments, too.
But Karl’s suggestion is really helpful. He suggests summarising the following criteria for each publication:
- Whether it focuses on high volume, short-term trading opportunities, both long and short
- What the relative success rate is
- Whether it uses recommended stop-losses and targets
- The average annualised return over the whole of the portfolio recommendations, and…
- Past performance figures available so people can analyse before committing to the service
Fantastic ideas, Karl, and I can promise you we are thinking along the same lines.
All of our services have unique selling points, goals and aims. They should be clear to all. And they will be. Watch this space!
And finally, here’s a very specific question from Barry directed at Shae Russell, our gold investment expert and editor of The Daily Reckoning Australia, Rock Stock Insider and Hard Money Trader.
‘After reading Woody’s suggestion to move to all cash I’d like to know what Shae’s suggestions are on gold mine and resources shares…’
Barry, just to be clear, it was never my suggestion to sell everything and go to cash.
I was talking about the specific portion of capital I’ve allocated to trade the awesome First-Mover Algo Alert signals.
And we didn’t stay in cash long. We are now back to 100% shares (via market ETFs). Just clearing that up!
But for the second part of your question on gold and resource stocks, I took the liberty of forwarding it directly to Shae and she immediately came back with this:
‘Hiya Barry, thanks for writing.
‘The gold price and gold miners have suffered a bit recently, haven’t they?
‘This latest price fall in gold has definitely knocked the stuffing out of gold stocks too. I don’t think we’re going to get a respite here in the next few months either.
‘Every bit of good news knocks that US dollar gold price a smidge lower…making it hard for the gold producers and developers to stretch their legs and rally. Meaning, you might be stuck watching this sector tick down into the new year.
‘Furthermore, a “turning around” of the gold price might be even longer away than we think, depending on how the market reacts to economic events and the vaccine rolling through the community.
‘If you’re long gold miners, make sure they’re quality companies that are profitable with an all in sustain cost (AISC) less than $2,000 and they should survive the volatility.
‘As for the broader resource sector, it’s a hit and a miss. Copper is still 28% off its 2010 high, but stronger signs of economic growth (particularly in China) could see the price move up. Iron ore prices have defied gravity this year, largely thanks to China importing more Brazil’s exports aren’t back to their 2018 levels. But how long will this continue is a wild guess.
‘Internal consumption of steel in China has is only slighter higher, and much of the steel being produced in the country is being produced at cost. Battery metals like lithium and nickel are looking pretty good for 2021.
So, there you have it.
Once again, please do check out the invitation to Chewbakker’s brilliant new algo trading service. You get to take advantage of a cracking deal. But it’s only available until midnight.
Even if you don’t subscribe, you’ll learn a lot from watching our video presentation.
Have a great weekend.