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MLR - Important Reminder on the Market Direction Model

Thank you for your comments and praises regarding the Market Direction Model. After four successful signals in a row, and possibly a fifth successful signal, I wanted to remind everyone that it is unusual for the model to have a four or more true signals in a row. As we have said in prior reports, the model tends to have more false (unprofitable) signals than true (profitable) signals, but the model, over time, has always managed to substantially outperform the major indices because of its failsafe which limits losses when signals are false, while capturing more sizeable gains when signals are true. Such gains more than make up for the small losses during false signals.

Earlier this year, the model had five false signals in a row due to a choppy, go-nowhere, trendless market. At that time, we reminded everyone that such challenging environments usually lead to a string of false signals. Fortunately, most everybody stayed on, understanding the situation, and we continued to attract new members, or as we like to say, students, as we consider ourselves and will always consider ourselves students of the market.

That said, the point of this discussion is to remind everyone that strings of true signals are unusual and do come to an end, so stay vigilant in terms of your money management, position sizing, and risk tolerance levels.

And as a reminder: https://www.virtueofselfishinvesting.com/faqs/answer/What-are-the-weaknesses-of-the-model

 

Best Wishes for Successful Investing,

Dr. Chris Kacher and Gil Morales

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This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2020 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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