I’ve never hid my growing admiration for investment mimicry. While much ink is spilled daily by pundits recommending this and that, I’ve come to the realization that most of this is just emotionally-driven noise.
This breakthrough in thought, that investors would be better off just aping proven investment techniques, led to my backing and promoting AlphaClone as the cure for investor insanity. AlphaClone is a research system in a box that allows investors to research, manage and trade portfolios piggybacking the world’s greatest investors, like Buffett, Soros, and Lampert.
Screening 2.0 technologies and services also can be used to employ a mimicking strategy — with a twist. Validea, one such firm, provides premium tools to recreate master portfolios of some of history’s greatest: Peter Lynch, Ben Graham, Ken Fisher. Unlike AlphaClone which recreates actual guru portfolios by monitoring portfolio holdings from regulatory filings, Validea uses an approach that reduces master investment technique to algorithms, layers in some artificial intelligence, and screens through thousands of stocks to pick more winners than losers. All Validea’s guru portfolios are solidly beating the S&P over the past few years.
Now, for the first time, investors can invest directly in portfolios managed with the Validea methodology. Founder John Reese announced to subscribers today the launch of 2 portfolios, the Validea Capital Hot List and Hot List Rotational portfolios.
As you can see on the tear sheet (by following the link above). both actual and backdated performance are really good — like we’d expect from Lynch, Buffett, et al. Reese’s asset management group currently subadvises on over $100 million in assets and this is a no-brainer next step for Validea.
- My interview with John Reese, founder of Validea
- How to piggyback guru investors: a primer
- Learning the basics of Screening 2.0 by the book