Who we are
This site was started to serve as a tool to communicate stock ideas between friends and classmates after we graduated from a top MBA program. Our philosophy is one word: Result.

We are finance professionals and mathematicians. We spent days and nights researching and modeling stock markets since 1995. Our team leader holds MBA from the University of Michigan Ross School of Business (BusinessWeek ranked it No. 5 in U.S.). Another member holds MBA from University of Chicago Booth School of Business.

We take pride in what we can do. Pride is not pride until it is shared. We also use the platform to explore future opportunities.

What we have achieved
On this site is one of our stock trading systems and a long term stock market indicator. The chart below shows the annual returns that the system achieved in the past 6 years, around 30% per year.

Many people are suspicious and run away when seeing the chart because the returns are much higher than usual. However, we have a way to let you prove it is true to yourself.

We make this site completely open for now. We post every buy or sell the system generates a day before it is traded. We update on every trading day. If there is not any buy or sell that day, we say so.

Current readers know what they get from the site. If you visit the site first time and doubt the trades we posted in the past, the new ones will show you how the system performs.

Put away your credit card. This site is open and free for now.

Spend 5 minutes to explore the opportunity for yourself. Keep a record. It could change your belief on what individual investors can achieve.

How we achieved it
Through research, we found momentum Investing is a powerful methodology but has one major shortcoming:

When stocks appear on a momentum list, many of them are often too hot already to have room for further upside move.  One typical example is the IBD100 list from Investor's Business Daily. Stocks in the list usually have high growth potential. The stock prices may have a little room to grow further but are near end of the cycle.

We developed a methodology to select stocks whose price momentum surpasses analysts’ earnings forecasts, ratings and commentaries. In other world, price of the stocks we choose moves up faster than Wall Street expects.

That is counter intutitive. The method carries more risk from valuation point of view. But it works. Here is our reasoning.

Wall Street analysts could upgrade stock ratings if its price keeps moving up. If the stock price is higher than its valuation, it should be a sell and not be upgraded. The fact is that the valuation is never known for sure.

One of the valuation methods is estimating future free cash flows of the company and discounted back to the present value with a specified discount rate. The future free cash flows are not certain. The discount rate is trickier. Business situation changes in the future.

Other valuation methods are not perfect either. For example, comparing method determines a company’s value based industry or other similar companies’ valuation. In 1990s, analysts thought Gateway is similar to Dell because both are direct retailers of PC. They turned out to be way different.

Valuation is more an art than a science. When stock price is much higher than analysts’ valuation for an extended period, those analysts are in hot water. They are scared to be wrong and want to move the rating to kind of matching the price. Even if the move is proved to be wrong, at least some others such as the big buyers are wrong along with them. So they would have excuses.

With the price momentum, if those analysts’ sentiment moves in a positive direction and they upgrade the stocks, usually stock price moves up fast because some institutions have to buy stocks based on ratings. When most analysts agree that the company has a great potential, or when stock price performance does not match the sentiment, it is our time to sell.

Additional Portfolio Optimization
High risk positions usually bring high returns. Mutual funds study portfolio optimization in a great deal. We take a step further. We seek high returns of each position. At the same time, we maximize the chances that the volatilities of the stocks cancel each other. Our portfolio usually includes 20 to 30 stocks. On some days, one of the positions may lose 10% or more, but overall portfolio still gains for that day.

Your power - take action now
Again, since the site is completely open, there is no way to hide. There is no ambiguity either.

Check for yourself and click

here for our main portfolio

or

here for our active trading portfolio

We wish you well in your endower of pursuing wealth. Tell your friend if you find we are doing something right. Thank you in advance.

Market Indicator
p.s. We also developed a stock market indicator for more than 20 countries. It has proved to be very effective for many years. Wealth is built by not losing big. The indicator is updated weekly. Please click the following chart to see more.