Our mission is to help small investors beat market averages by exploiting inefficiencies in the ways that Wall Street's largest brokerages and mutual funds do business.
We call our approach Data Driven InvestingTM, and you can learn how it can improve your returns by reading our book, Data Driven Investing-Professional Edition.
The book will give you the data - including 52 years of return figures for 19 different strategies, intelligently presented in more than 270 full color tables and graphs - and analysis that you need to understand which strategies consistently outperform the market - and why different market environments favor different strategies. It will also give you a firm grounding in the investment techniques that the authors used to produce 79% annual returns over a recent 45-month period.
So, What is Data Driven InvestingTM all About?
Market participants act and interact in ways that have predictable effects on stock prices. Strategies rooted in these predictable patterns of behavior have long track records of superior performance.
Data Driven InvestingTM is about sifting through decades of historical data to uncover these strategies. It's about formulating rules for guiding investment decisions. And, since successful investing goes beyond stock picking, Data Driven InvestingTM is about reacting decisively to information in our day-to-day trading.
Investors who trade on intuition, emotion, or their brokers' advice tend to get beat by the market over the long haul.
Investors who consistently apply well-conceived decision rules to develop watch lists of stocks for potential purchase or sale - and then immediately execute preconceived responses when breaking news affects the stocks on their watch lists - make money.
We did.
Through the expert application of the methods described in our book, Data Driven Investing-Professional Edition, co-author Bill Matson, MBA (Harvard), CPA, CFA, FLMI gained 788% between July 2000 and March 2004 in an actively managed, highly diversified portfolio of (mostly) U.S. equities. Through more than 10,000 trades involving hundreds of different stocks, Mr. Matson beat the S&P 500 in 39 of the 45 months in this period while growing the Data Driven Test Portfolio to several million dollars. And he did it with real money.
As you've no doubt heard many times, past performance is never a guarantee of future results. Nevertheless, the 79% compound annual returns earned by the Data Driven Test Portfolio are an indication of what can be achieved when investment decisions are based on clearly defined, consistently applied decision rules and hard information.
If you're like most investors, you probably get barraged by ads for newsletters, books, and other forms of investment "advice." All of these ads tout their superior performance.
What makes Data Driven InvestingTM different?
First of all, as we've said, the Data Driven Test Portfolio's performance was achieved with real money. We're not talking about the performance of some hypothetical strategy that could never be duplicated in the real world.
Secondly, we're not asking you to take our word for these performance figures. We've published the actual brokerage statements for the entire period - July 2000 to March 2004 - in our book.
Thirdly, and most importantly, Data Driven InvestingTM is an approach to investing based on measurable, verifiable data, rather than theory, intuition, or conventional wisdom.
And you've come to the right place for data and analysis. With over 270 full color graphs and tables presenting more than five decades of market data, Data Driven Investing-Professional Edition has been called "the definitive historical analysis of U.S. stock market activity since 1951." Click on the excerpts button to see why.
Data Driven Investing - Professional Edition is the first book ever to present and explain over five decades of Compustat® market data - and the only one to correlate returns for different investment styles with the monetary and political cycles. As such, it represents a rare opportunity for individual investors to get access to the same data that large institutions use to develop their trading strategies.
But the big institutional investors can never hope to match the performance of a small investor who is disciplined, alert, and armed with appropriate data.
Large brokerages and mutual funds can't cost-effectively buy or recommend the small company stocks that, as a group, have consistently outperformed their larger peers by huge margins. And the big guys can't hope to equal the speed and decisiveness of a competent small investor when news breaks.
But large institutions do affect the way the market operates, and that creates inefficiencies that small investors can exploit.
Data Driven InvestingTM involves methods that are not well-known or widely used, but within 10 years, they will come to define the way business is done on Wall Street.
Ultimately, the market will force the inefficiencies we exploit to be "corrected," as more and more investors adopt our methods.
But whenever the marketplace moves to correct a trading inefficiency, new inefficiencies always emerge. Data from the past is constantly interacting with new data to create new trading opportunities.
Here at Data Driven Publishing, LLC, we are continuously analyzing market data to adjust and refine our investment strategies, so that we can provide the most up-to-date, well-researched, market-tested trading methods available anywhere.
That's what Data Driven InvestingTM is all about!
Compustat® is a registered trademark of Standard and Poor's, a division of the McGraw-Hill Companies, Inc.
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