Thursday, 23 April 2015

1st Quarter Results 2015

Trendinvestor Capital Management Ltd have had a very difficult first quarter of 2015, this happens from time to time, because with a primary trend following system you need to have a trend, occasionally the primary trend goes AWOL!

This is rare and last happened during the first 10 months of 2004. There is nothing we can do about this, we simply have to wait for the primary trend to reappear, and it will!

For January 2015 we were down 6.96%, for February 2015 we were up 5.49% and for March 2015 we were down 0.68%. This resulted in a loss for the first quarter of 2.52%.

Now lets see what can be done in the remaining 9 months of 2015! 

Our Results Over The Last 20 years

Trendinvestor Capital Management Ltd has now been trading for over 20 years, over this 20 year period we have averaged 51.39% per year, which means that $50,000 invested with us 20 years ago would have grown to just over $200 million in this 20 year period.

To us, this clearly shows the wonders of compound interest over a considerable period of time.

We feel it is impossible to try and trade every twist and turn of the market. We only trade the S&P 500 therefore we have the natural diversification of 500 companies, we try and identify the dominant primary trend, we then use sensible margin and trade in the direction of the dominant primary trend.

It takes time to grow an account, a multi decade time frame is necessary. Over the short term the account will be quite volatile, however we agree with Warren Buffett, Volatility is not risk it is simply a natural phenomenon of all markets. Margin used if any, must be commensurate with underlying volatility expectations.

Far too many money managers try and mitigate volatility, by trying to time markets, and therefore trading in and out of the various markets, they are rarely successful, which means that the vast majority of them lag the actual S&P 500 index.

We believe that apart from identifying the dominant primary trend, it is nearly impossible to time the markets, and we make no attempt to do so.

To average 51.39% per year over a full 20 year time frame, with only 1 losing year, it is necessary to identify the dominant in force primary trend, trade in the direction of this primary trend, over a considerable period of time, using limited margin, and let the wonders of compound interest grow the account. Identifying the dominant primary trend is not easy, and having the discipline to stick with the trade is also not easy.

Confusing volatility with risk, and trying to mitigate this risk, by timing the markets, can only lead to a sub par performance. Which is why the vast majority of actively managed funds, perform so poorly.

We prefer naturally diversified, directional long term trades, that simply ride through the underlying volatility or market noise, in the direction of the dominant primary trend. We really adhere to the old saying "The trend is your friend".

It is rarely an easy ride, but it is the only way to produce stella results. We would regard $50,000 to over $200 million in 20 years to be a stella result, and proof positive that our system and method of trading works. 

Monday, 10 November 2014

My blogs from now on will concentrate more on the performance of Trendinvestor Capital Management

Really because of time constraints, i will be concentrating in future blogs on the performance of our trading system that we use to trade the S&P 500. Which at the end of December 2014 will have a full 20 year trading record.

Our results have been very good, and we have averaged over 50% a year throughout these 20 years. We use margin, and we take short positions.

The system has been improved and perfected over the last 20 years, to the point that i feel it should produce very good results over the next 20 years!. Nothing certain with the markets, but i am confidant!

The key is PATIENCE to let the major primary trends develop, DISCIPLINE to stick with the primary trends and TIME to let the wonders of compound interest grow the account.

Friday, 17 January 2014

Feeding The Machine

Back in the 1960,s one wage earner could easily afford a house, and a reasonable quality house as well. My father was a schoolteacher he was able to afford a 4 bedroom detached house that he bought in 1971 for £9000. Today that very same house would be worth circa £400,000.

Now before i start, i would like to state for the record that my remarks are not being anti women in any way. I am simply stating facts. In the 1960,s and 1970,s we had the women's movement a move towards women's liberation fully backed by the Government, Mainstream Media and particularly the big banks. It was no longer acceptable for women to stay at home and look after the family, she should now have her "independence" and move into the workplace, this was the modern way and it was "progress".

Now lets have a look at the reality today. It is now necessary to have two incomes just to survive, as the finite supply of housing is now inflated in price because of the purchasing power of the two incomes, it is now necessary for those two incomes to afford to buy the same house that one income could previously buy. Women have less "independence" than they ever had, and yet we mark this as "progress"

We now have a whole culture based on both parents having to work, a culture of expensive childcare and nanny s, a culture of divorce and broken relationships, a culture of depression and Prozac!. A single person will find it very difficult to survive in a culture where two incomes are necessary to simply provide a basic human right SHELTER. The same shelter that before was affordable with a single income, therefore giving both men and women true independence!. This debt culture based on two incomes has spawned a massive mortgage and re-mortgage industry and recently pay day loan companies charging north of 2000% annual interest payments.

This society is a deliberately manufactured catastrophe, and a disaster for the ordinary decent man or woman.

With women now going to work, so that the family have two incomes, it should mean a better quality of life for that family, WRONG!. This would definitely have been the case if mortgages were simply given on ONE INCOME and not JOINT INCOMES. Then the extra income would have gone to where it belongs the FAMILY and not the BANKERS! If a man or women decided to split then both parties could again afford Shelter for themselves, if a woman wanted to stay at home throughout the early child years, again no problem as the mortgage could be serviced with one income. This would be real independence and real progress, and not the sham that we have today.

So when the women were out of the home and working, what happened next?. We became a "multicultural society" this is just a fancy word for mass immigration, in exactly the same way that "Quantitative Easing" is just another fancy word for money printing. We rapidly increased the size of the population, and anybody who dissented in any way was immediately branded a RACIST. My question is very simple. Did our elected politicians who are simply there to represent US THE PEOPLE ever ask us whether we wanted a policy of mass immigration dressed up with the fancy slogan " Multicultural Society"? and did they have the common decency to build enough shelter for all the new " Multiculturals" now coming to live in Great Britain?

OF COURSE NOT, we were never asked and shelter was not built in quantities that would be sufficient. The whole point was to keep house prices artificially high, by providing a new source of DEMAND!

It is all about feeding the machine. If you look at consumer lending in Great Britain it is about £1.45 Trillion Pounds, but over 95% of all lending is secured on property. The Banks are simply not interested in personal loans or even credit cards.They want the lending secured on bricks and mortar.

This is the problem, because quite simply when you go for a mortgage which is 95%+ of all lending in Great Britain they lend you the PRINCIPAL, but they never lend you the INTEREST. Therefore unless the lending constantly expands, IT IMPLODES ON ITSELF.

This is why the Governments, Mainstream Media, and Bankers were so keen to get Women into work and into debt to keep the scheme going a bit longer,TO PROVIDE DEMAND. It is why the same Governments, Mainstream Media and Bankers are so into the "Multicultural Society" to get the new arrivals immediately into debt to keep the whole scheme going a bit longer,TO PROVIDE DEMAND.

It has nothing to do with Women's independence and Women's liberation but it has everything to do with taking away Women's independence and Women's liberation with a quagmire of new debt. It traps both Men and Women and destroys family, as two good incomes are now necessary just to survive, when in the past one income would easily suffice, but we continue to call it "progress"?.

Remember they only lend you the PRINCIPAL and not the INTEREST so the lending must constantly expand so that the interest can actually be paid or the system collapses on itself. We know that this lending of principal is centred upon property as over 95% of all outstanding consumer lending is secured on property. 

To feed this voracious machine, first they used women and now they are using immigrants. Even after all of this the economy was still about to deflate, so they then resorted to good old fashioned money printing to survive. 

Thursday, 9 January 2014

Taxing Turnover

I have long had the idea that instead of taxing nett profits with corporation tax. A far better idea would be to tax the business turnover. This is because the present system has become so corrupted, with the use of offshore tax havens and also dubious expenses, and other deductibles.

Because the present system is so complex it has spawned a veritable army of tax collectors, accountants, auditors and lawyers, and compliance procedures. All of this has a massive ongoing and unavoidable cost for every business. As a rule of thumb most businesses earn approximately 10% Nett profit and on this profit they pay around 20% corporation tax.  This equates to a tax burden of 2% of Turnover.

Contained within the expenses of the business will be entries for Accountant, Audit, Lawyers and compliance costs and for bigger companies lobbying costs to make the whole system favourable for them at the expense of others. When the Government receives this corporation tax payment there will be significant costs for the whole tax collection process and also ongoing verification, compliance and enforcement costs.

With my proposal the business simply pays 2% of Turnover as a fixed business cost, So instead of Corporation Tax becoming a variable cost based on profits, it becomes a fixed cost based on turnover

The advantage to the business is significantly lower costs as they eliminate Accountants, Lawyers, Auditors, Lobbyists, and all the compliance costs. It also wipes out the offshore tax avoidance industry virtually overnight. It also frees the business of wasted time to concentrate on what they do best making money and not being unpaid tax collectors.

Business turnover this last year $1,000,000 tax to pay 2% = $20,000

When the Government receives these tax payments they have virtually no further tax collection costs. many tax collector employees could be laid off and tax offices closed. So a far higher percentage of the money collected goes to where it should to pay for services that the taxpayers actually receive. Rather than the present system where so much money is wasted in Tax Collection bureaucracy because of the enormously complex nature of the whole tax code and system.

I believe that because of the Offshore Tax Avoidance Industry, with my proposal of taxing turnover at 2% rather than collecting 20% of a very manipulated and massaged nett profit the Government would actually collect far more tax. This then opens the opportunity to actually reduce the rate to 1.5% or even 1% of turnover. If you complete a transaction within the country, either a cash till sale or invoice sale that is the turnover you simply pay tax at the end of the year on the value of all those transactions. If you have a bad debt, that is a credit note that is deducted from the value of all those transactions. It is so simple to operate and enforce. As the turnover then flows directly to the business bank account.

Businesses benefit with significant cost savings, It also levels the playing field somewhat as large companies loose the unfair advantages of the offshore tax industry. Government benefits with a larger and easily enforceable simple corporation tax system, that is far cheaper and easier to operate. The only people who would not benefit are Accountants, Auditors, Lawyers, Lobbyists as well as employees of the Tax Collection system as far fewer would be needed.

However lets be honest as regards the whole business process these people are simply hangers on, they add no value to the business, they are parasites who thrive within a deliberately complex system that only benefits themselves and not the Business or the Government.

With my system Business would have less to pay, and Government would have more to spend.


Wednesday, 8 January 2014

2013 Full Results

2013 was a vintage year at Trendinvestor Capital Management, one of our best years ever.

We were up 110.37% for 2013, which means that over the last 19 years that Trendinvestor Capital Management has existed we have averaged 52.73% every single year. Or put another way if you had given us $50,000 to manage on January 1st 1995, there would now be $156,221,390 in your account as of December 31st 2013. That is the Gross amount, you would have our fees to pay! but would you have minded paying our fees with such massive gains?