How is it that when the market falls by 25%, 35%, 45% or any other significant decline, the account values of investment advisors' clients fall by similar amounts? If advisors are fulfilling their obligations to manage clients’ risk, why is no one in the industry able to avoid these large market losses? What exactly are the fiduciary duties of a registered investment advisor?
On 4/19/24, NVDA’s price to sales ratio was 39. In the last 6,103 trading days (24 years), NVDA had a P/S of 2.0 or less on 1,028 days (16.8%). In the future, NVDA may again have a P/S ratio less than 2. What does that imply for NVDA’s price?
Excellence wins in every profession! Success in investing, like in chess and many other endeavors, is highly dependent on reducing, avoiding and preventing losses. The tactics and strategies required to substantially reduce, avoid and prevent losses in the market are completely out of reach for average investment advisors. Countless studies have proven this.
An excellent advisor will lose less money than the market when the market falls and make more money than the market when the market rises. But an average advisor will do exactly the opposite.
The competitive environment will force every advisor to make a decision: Either accept average investment outcomes, or commit to learning and using cutting-edge technology to achieve exceptional results! If you don’t make a decision, the competition will make it for you. Exceptional investment performance, not one’s personality, will separate the winners from the losers.
Stock price forecasters compete using vastly different methods: “Traditional Analysts” derive price forecasts from a combination of qualitative assessments and their substantial experiential knowledge. "Quantitative Analysts" forecast prices through the application of complex algorithms and models, using mathematics and statistical analysis on historical datasets to inform their predictions.
The permanent value of an investment advisor is their ability to build their clients’ net worth. To outperform the S&P 500, an advisor must employ highly reliable methods of investing.
Fiduciaries must “act with utmost care” in managing client investments. To effectively safeguard assets, fiduciaries must possess a deep understanding of the various factors leading to corporate failures, ensuring their strategies are well-informed and resilient against potential financial downturns.
Are the companies your clients hold becoming stronger and more durable or riskier and less durable? Consider the following essential accounting factors and analytical insights.
Logic-based strategies, particularly those propelled by the advanced capabilities of computers and artificial intelligence (AI), are creating massive profit opportunities. The sophisticated pattern recognition and predictive analytics offered by big-data algorithms enable profit-rate potential previously unattainable, with the one exception being the achievements of James Simons, PhD. of the Medallion Fund.