‘Operation Turtle’ Launches

Friday, 16 April 2021
Melbourne, Australia
By James Woodburn

[3 min read]

  • Chewbakker’s algo kicks into gear
  • ‘Operation Turtle’ is now live

Dear Reader,

This week was all about the power of trends. And so I figured what better way to end it than a call with Tom Meyer, our trend expert and algorithm builder.

It was pretty last minute. I sent Tom at text at 7:00pm his time last night. He had his feet up, watching the basketball.

Give me two hours,’ he said, so he could prepare something.

As always, he delivered the goods!

And straight away — I’m talking in the first six minutes — he gives a valuable takeaway that every investor needs to understand.

In fact, if all you do is takeaway and consider this piece of advice and do nothing else today…this video is a success.

I won’t tell you what it is here. You’ll have to watch it!

The video is below, and it gives you a taste of what you can expect if you’d like to take up my invitation to try Tom’s system yourself. (That invite was officially released today and you can check ‘Operation Turtle’ out by clicking here.)

But first, a quick detour to another trend that came to an end this week…

Chewbakker’s algo kicks into gear

Late last November we launched a new algo designed to help guide the allocation of the bulk of your money.

The system gets its signal from the interplay of two indicators:

  1. The ratio between copper and gold
  2. And the price of risk, which determines what market makers are willing to pay to hedge their positions

The unique thing about this system is that it gives you a single simple instruction, which can be any one of the following:

  1. 100% stocks
  2. 100% bonds
  3. 60%/40% stocks and bonds
  4. 40%/60% stocks and bonds
  5. 100% cash

And the way to position for the above is buy a simple ETF pair — either one for the Aussie market, one for the US markets, or a leveraged pair for those who want to ‘spice up’ the returns (and are willing to accept the extra risk too).

I’ve been following this algo to the letter via the US ETF pair since 10 August.

For the first five months it gained 10%. Then, as luck would have it, soon after we officially went live with the algo, we went into a slight (but perfectly normal) drawdown. (In the research business we call it the curse of the launch!)

But those subscribers of First-Mover Algo Alert who stuck with it, like I have, are now being rewarded.

My account is now at US$7,823.90.

I initially funded it in two parts — once in August with US$3,522 and again in November with US$3,585. So US$7,107 in total.

By my calculations that’s back at 10% account growth.

So what led the turnaround from a slight drawdown?

The strong trend in the NASDAQ!

We got the signal to go 100% stocks on 29 March and rode the trend until yesterday.

The algo determined a slight increase in market stress. Market-makers are now paying more to hedge their positions.

And so we decrease our exposure to 60% bonds and 40% stocks.

As Chewie told his subscribers…

So, the risk is increasing again. Yes, but not by a lot. The risk index has been slowly rising over the last week, and the consistent accelerating movement up has alerted the algorithm that more risk is probably following.

As I said a while ago (22 March), we will probably have some volatility in the market as we usually have around 15 April as the tax bills are falling due. Many people and businesses need to pony up, and if they don’t have the cash, they will liquidate some assets. The way the US tax system works, they are most likely going to liquidate the biggest winners and the biggest losers, and that has given in the past sudden gyrations around this time. So we might be tricked by this event, but all in all, the risk is going up, and we have to take some of our winnings off the table and put it to work in (inflation-protected) bonds.

The question has not changed, though: Are we building a base to jump higher from, or are we building a top that gives us a nice slide down the hill? Only time will tell. Topping is a process, not a point in time. The algorithm has determined that the markets are good to invest in, although a bit more risk-averse than we were the past two weeks!

I plan to catch up with ‘Chewie’ next week, so I’ll be sure to publish our conversation so you can see what he says.

But for now, from one trend trader to another…

‘Operation Turtle’ is now live

And so back to Tom Meyer…

Like I said, all week I’ve been exploring the power of latching on to big, powerful trends.

The culmination is an invitation to trial Tom’s system for identifying trends.

We’ve called this event ‘Operation Turtle’ after the famous trend trader Richard Dennis.

In the early ‘80s he put an ad in The Wall Street Journal seeking novices from all walks of life that he could train in his method.

He gathered his small group, dubbed ‘The Turtles’, at the height of a bitterly cold Chicago winter. He spent two weeks teaching them a set of rules to trade by.

Then he gave them a pot of his own money and let them loose on the markets.

Four of them doubled their money…every single year for four years.

And the average annual return the group made over the next four years was 80%.

It’s an inspiring story. And it shows the power of trend following over the long term.

Anyway, it’s the starting point of my discussion with Tom. Check it out by hitting the play button below:

 

And then, if you’d like to consider our invitation to join Tom’s service, you can do that too, right here.

Have a great weekend.

Cheers,
Woody