...for a guy who is so risk adverse, you would think he would appreciate the concept of opportunity risk. Zero risk is an extreme risk - especially given that the trend in US capital markets over the past CENTURY has been upward.
Imagine the arrogance required to believe that you have things so precisely figured out that you don't have to take any risk at all - no margin of safety. Pure hubris.
Agreed. Its too bad, because hes a pretty good investor otherwise. His unhedged performance would have turned 10k into 27k since inception, an annual return of 8.1%, crushing the market returns during that period. Hedges have damaged what would otherwise have been a very good investment record during a very difficult period. I think hes right, that the market is overvalued today although i think the low interest rates makes it extraordinarily difficult to value and i think its difficult to look back at the past in order to predict the future. Although the markets likely overvalued, its less so that it was in 2007 and a lot less so than in 2000. There has to be a certain point of overvaluation where youre better off accepting overvaluation risk or maybe less volatile securities instead of hedging.
The dude completely ignores the supposed "Market Action" part of his advertised formula. He's just plain too stubborn to follow his own formula because way back in '09 he dug in and committed to being short (essentially) and now he can't go long until finally comes the day when he happens to be right.
Unfortunately not Nomore, he's still got over 2 billion in the fund. The fund will need to get below 40 million before he even considers closing. Maybe even lower. He could fire his brokers, kick Dennis Hester to the curb and operate thru Etrade with just a secretary. He might let it go down to 20 million before folding. That will take several years and unfortunately we will have another bear market in that time and the 10 percent he makes during this coming bear will give him some breathing room.
I'll probably have to stay at this for another 8 years or so.
#$%$, even I've still got money in the fund. I have yet to get my wife down to Charles Schwab while the notary is working to get her 20 grand (and dwindling) Roth signed over.