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Rajeev Seth
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Rajeev Seth is the Managing Director of BeatIndex, an investment management consulting firm. Specializing in quantitative investment management, he has consulted for many diversified asset managers, and startup hedge funds. The philosophy of BeatIndex is that one can indeed beat indexes, by a... More
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BeatIndex
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  • How to invest in today's trendless markets if you want a good return on your cash without much risk
    As I write this in Sep,2010, a lot of individuals are sitting on cash that earns them nearly 0% in savings accounts. They are wondering how to get a decent return on that cash without subjecting it to a lot of risk.

    By listening to various market gurus such as Mr. "Stocks for the Long Run" and diversifying their assets amongst various asset classes, they likely got losses in most of their holdings, as the market "chopped up" long-term investors.
    Having invested alongside those long-term investors, I feel their pain, and I believe this long-term investing mantra was created and spread as propaganda by the financial industry to support their motive of having a stable fee-base, which was based on a percent fee of AUM. To some extent, a long-only "follower base" is also required for an economy to continue to function.

    There is a conflict of interest in that goal with the real goals of the investor, who wants to see a Return on his Investment, with low drawdown and risk. These goals are aligned in hedge funds, which generally will charge a performance fee of 20% if your returns exceed a base level of say 6%, while keeping the AUM based  fee to a minimum of say 1%. Importantly, they give you a low-risk vehicle, so your assets are not supposed to have a large drawdown from the previous high.

    Take for instance, the BeatIndex Fund, whose stock trade signals you can follow at 

    stockpairstrader.collective2.com

    In the trendless markets over the last 3 months, this fund has been delivering an annualized performance return of about 60%, with a super low drawdown of 2.4% 
    The movement of daily returns to this fund are uncorrelated with that of the S&P500, which means that whether S&P500 zigs or zags, the trade signals you get here make you a slow but steady profit

    So, stop listening to the long-only market gurus as to whether Gold will go up, or Europe will default, and instead subscribe to trade signals at

    stockpairstrader.collective2.com

    if you want to earn a steady return on your cash in today's trendless markets without much risk. You will only lose long-term if you stay in the long-only, buy and hold camp of investment management.

    Disclosure: No positions
    Tags: SPY, SPY
    Sep 19 11:10 AM | Link | Comment!
  • Our stock pairs trader is better than ALT, the supposed "hedge fund in a box", and better than SPY, gives 63%+ return, and 2.3% low drawdown
    For those individual investors who want a better than near 0% return on their money without losing sleep at night, here's a proposal. Follow the simple trading signals issued by my Stock Pairs Trader system

    stockpairstrader.collective2.com

    Check out the performance statistics collected independently by collective2.com, which assigns it a C2 score of 988 out of 1000. This simple to follow (for the retail investor) system has been outperforming the S&P500 for the last 8 weeks. Since its public launch date of July 22, 2010 it has outperformed the S&P500 by 4.9% percentage points. See the chart in this link below:

    stockpairstrader.collective2.com


    As you can see from the annualized return for this model has been 63%
    The Sharpe ratio of this performance has been an outstanding 4.3, which means the excess return has been about 4.3 times the risk taken. This is mainly because there has been virtually no risk once each long position has been paired off with its corresponding matched short position. I did not say, there is absolutely no risk, because there is always a small possibility that the two positions can deviate farther away. However, the risk is so low that the 
    Max peak-to-valley drawdown (historical) was only2.43%
    and the
    Correlation w/ S&P was-0.01
    So this fund is as good as cash as it has a really low drawdown, while providing you a steady upward return, while having no correlation to the S&P500.

    As a hedge fund, my system is proving to be far superior to the professionally managed iShares offering of ALT.
    In the same time, ALT, the purported "hedge-fund in a box" has achieved a return of 0.86% in the period 7/22/2010 to 9/10/2010  

    So, for a worry free return on your cash, do not put money in ALT, or SPY, but follow the trading signals given by

    stockpairstrader.collective2.com

    Enter each new paired trade signal you receive, building up your portfolio as time goes by. Enjoy the rewards within a month or two as those pairs are unwound



    Disclosure: None
    Tags: ALT, SPY, SPY
    Sep 12 11:43 PM | Link | Comment!
  • Stock Pairs Trader system has yielded an annualized 46.7% with low risk since inception
    The proof of the pudding is in the eating! The pudding here is the efficacy of my Stock Pairs Trader system. Unlike most market prognosticators, I choose to put to public audit (through an independent third-party auditor collective2.com) the performance of this fund, by sending every trade long or short through it.

    My Stock Pairs Trader system hosted on collective2.com has been outperforming the S&P500 for the last 30 days. Since its public launch date of July 22, 2010 it has outperformed the S&P500 by several percentage points. See the chart in this link below:

    stockpairstrader.collective2.com

    In fact, if you had started with $100,000 in the S&P on that day, you'd be left with $96K, but with my Stock Pairs Trader system, it'd have grown to $104K

    As you can see from the annualized return for this model has been 46.7%
    The Sharpe ratio of this performance has been an outstanding 3.3, which means the excess return has been about 3.3 times the risk taken. This is mainly because there has been virtually no risk once each long position has been paired off with its corresponding matched short position. I did not say, there is absolutely no risk, because there is always a small possibility that the two positions can deviate farther away. However, the risk is so low that the 
    Max peak-to-valley drawdown (historical) was only2.43%
    and the
    Correlation w/ S&P was-0.309
    So this fund has been a great hedge for those long the US stock market, by providing a significant negative correlation to the S&P500.

    I wish all the market pundits I used to listen to over two decades and based on whose advice I lost so much money in the capital markets would SIMILARLY put ALL their predictions to an independent audit, so that we would come to know how effective they really were. Instead, they seem to create a huge amount of inane chatter in the media, which I liken to noise, predicting often, and mostly predicting wrong, causing a HUGE disservice to the individual investor.

    If you want more certainty and invest with an absolute return in mind, follow and track our Stock Pairs Trader system here for free for two weeks. Get the stock trade signals and use them for investing

    The absolute return of this hedge fund strategy seeks to provide a return above that of cash, without losing principal. While we may not shoot the lights out when you invest with our trade signals, you will be assured of a good chance of low losses or drawdown, while mostly advancing your total account equity. In fact, that excess return so far has been an annualized 46.7%. Not too shabby for an absolute return fund!!!





    Disclosure: None
    Tags: SPY
    Aug 26 12:48 AM | Link | Comment!
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