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« Do they ring a gong at the bottom? | Main | New Year's Resolution #3: Do Not Let an Investment turn into a Trade »

January 21, 2008



Black -
2002 was indeed a tough year for fundamental methods. We were down a bit less than 20% with the S&P down over 23%. Our sector fund was down about 15.5%

We strive for absolute performance, not relative performance, but it does not always work. Our fundamental methods are based on broad themes that do not always catch calendar years.

We are happy to share full records with any interested investors, with the idea that the program has to be right for the individual, risk tolerance, and time frames.

Thanks for clarifying.




Thank you for your detailed response.....I made a mistake in my question, which should have asked how you did in 2002...


Black -

Thanks for the question, which helps me to explain better what we do.

The TCA-ETF model was introduced this year and we have revealed our positions, pretty much in real time, for over six months. We'll do our regular weekly update on Thursday, but we do not "average down" on the model calls. We stick to the system which has only a modest position at the moment, as we indicated last week. For actual accounts, we have a modest negative index hedge, so the accounts were actually positive today.

Our longer running program--a different one -- is based upon fundamentals. This has a strong long-run performance and we are adding to positions in this decline.

We have extensive testing of the system -- not backfitting, but applied to new targets and a different time frame -- which we are happy to share with interested investors.

The fundamental program has a ten-year record that we are also willing to share, beating the S&P by abouts seven points a year on the average.

Any program should be reviewed by investors based upon individual risk tolerance and needs. I consult personally with any new investor.

As to 2003 -- our fundamental portfolio was up about 26% on the year.

I really appreciate the question. The blog is designed to be part of my project in writing a book for individual investors. We are, of course, happy to talk with investors who think our idea might fit their needs.

Thanks again for your helpful question.



Your EFT Sector Report suggests that you've been taking a pretty good beating of late. You've insisted that the consensus has been unduly pessimistic since before the Dow dropped below 13,000.

Are you "cost averaging down"?

In the interest of full disclosure, would you let us know how you did in 2003?

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