Tyson Tips is being relaunched as a stock tip picking newsletter club.
That’s right and before I talk about:
- How this came about
- Hello Equities
- A good hiding
- Tyson Tips for equities
- Market beating returns. Profit. Fun.
- What that means for you
I’d like to thank all of you for sticking with me and for your patience, especially those paid subscribers (which were virtually all of you!) for holding out for the relaunch of Tyson Tips.
How this came about
As all of you will know we were having a good profitable run with our sport tips recommendations as tracked by our spreadsheet with an all time return on investment (ROI) of 25% from a strike rate (measuring how often our bets came off) of 43%.
Unfortunately, as mentioned in my last post, with the success I was enjoying, the odds being offered to me started worsening and eventually my betfair account was suspended.
Naturally, a period of reflection ensued with questions:
How scalable is sports betting when you’re succeeding?
Not very it seems. Yes I could have placed all of my bets via the Betfair Exchange and kept my account open. However, I used the main sports product for speed because it was much quicker for me to place bets and also compare the odds against other bookmakers.
What have I learned from sports betting about probability?
The great thing about sports, as in life, is that you realise very quickly that literally anything, and absolutely anything can happen. I recall having a position in a French Ligue 1 game (Montpellier vs Reims 25th October 2020) where Marseille should have won against Reims hands down. This was reflected in the near evens odds. However, the Marseille team committed two serious fouls and ended up losing the match 0 – 4 at home!
Is that a black swan event? Maybe. But what I learned is that my statistical methods while profitable could be even more profitable.
We were profitable because we hedged using 2 positions instead of 1 per football game.
While this got me thinking, my day trader friends were boasting about their wins in the stock market (nobody boasts about their losses!). Although I wasn’t about to become a day trader, it did prompt me to question why I was blindly investing money into a stocks ISA every month on the advice of my independent financial advisor (IFA). It also occurred to me that:
- the stock market is a giant casino in the short term
- the stock prices are as much about the emotional expectations of a company prospects as they are about the company financial data
- there is no bookmaker other than the trading app you use as they make money from executing your trades. However, they won’t try to limit your success as it’s in their interest to keep you trading. And the more you trade (both in terms of frequency and position size), the more transaction fees they earn
In any case, I signed up to a I opened a share dealing service account because I wanted more control over the cash being saved in my investment plan. Of course, wanting to have more success than what I was currently getting from my IFA, I also signed up to one of the most well known stocks advisory services (who shall remain nameless to spare their embarrassment!).
I got some recommendations like Archer Aviation (ACHR: NYSE) and others. A load of blurb about the management team, the financials on how they were cash rich etc. It was a nice story, I felt secure in their superior judgement that their recommendation was a sound ‘buy now’.
Then the horror of horrors happened. The share went down after two months from the initial buy in at 6.44 USD 6th Dec 2021 and tanked to 5.99 USD (22nd Dec 2021) and has tanked ever since (now 4.11 USD).
Still, I reasoned stocks do go up as well as down, it’s a tough time in the markets and the economies right now so don’t be a wimp and keep a stiff upper lip! More recommendations ensued such as Polar Capital (POLR.L) and it tanked again (all of them).
After a few more of these, I decided that blaming market conditions wasn’t a good enough excuse for a stock advisory service to make bad investment recommendations. So I started to question them and everything that is peddled as knowledge in finance.
Hello Equities
My first job was to start taking all of the assumptions or perceived rules of investing and use my mathematical knowledge to test them. Even testing the standard investor tests they used to evaluate whether an investment strategy is sound or not!
What I found was shocking (and I will write about these in more detail in later posts):
- Traders and investors use back tests which essentially fits a strategy to historical data. What’s wrong with that? The trouble is, history never repeats itself in the same way in the future so you cannot be certain that your strategy while it worked in the past will work the same successful way in the future. Would you use yesterday’s lottery numbers to play the future lottery? I thought not.
- Selecting stocks on their financial fundamental values is no guarantee of superior returns compared to the overall stock market. They are still subject to the market conditions (even if they are growing earnings and have a healthy balance sheet), which means if the market is not feeling it, the share prices will go down – sorry.
- Market timing matters. Can the small investor time the market? In the short term no, but in the medium term yes. While your average return won’t be doubled by not unwittingly saving money into stocks every month to benefit from what IFAs call ‘dollar cost averaging’, you can still increase your annual returns by as much as 28% per year or more.
- Financial reports don’t matter to some extent. They don’t, as humans we all have this tendency to fit stories retrospectively to fit our facts. Even if you had the resources and the time to purchase, read and analyse all of the financial data on all of the companies, you could still get it very wrong, because as we’ve seen recently:
- Wars break out
- Viruses go pandemic
- referendum results
- Politicians get elected
Regardless of your political persuasion, the point is anything can happen and all the data in the world can only get you so far. But nothing can predict the future. No stock research available to Joe Public (John Doe if you’re in the USA) can foresee and account for these events.
Therefore with all of the above realised in my mind, the key approach for all of us is to maximise returns for the minimum of risk.
As far as stock selection services were concerned, I was done. With the IFA, I recently cashed in my stocks and shares Instant Savings Account (ISA) on the reasoning that I wanted to make a purchase. He protested to say, the “best was yet to come” even though the managed fund made me 20% over the past 2 years. I replied:
- In what time frame?
- And for who? You?!
So I decided to do my own research and test many hypotheses which taught me a lot about the realities of equities investing – more than many of the stock market books I’ve read in the past 20 years.
Most of which is anecdotal, plain wrong, outdated or just simply a self aggrandising love letter to the author (with their portrait photos on the cover!).
Some books are worth reading (I’ll share in a separate post). In fact I would argue all books are worth reading if you’re as passionate about equities as I am and you want to successfully critique alternative approaches. After all, it’s hard to criticise something you don’t know or haven’t read.
A good hiding
Before we go into my advantages, let me tell you why I’m not promising you a get rich quick scheme or day trading riches. Basically I’m not an investment bank nor a hedge fund, so that means:
- I do not have the budget to purchase market intelligence reports spend £250K per year (or per quarter?!) to possess
- I don’t trade with such large amounts capital to move markets
- I’m not in regular contact (or having regular lunches) with CEOs and trade insiders where information just flows freely towards me
- I don’t have a HFT (high frequency trading) box sat next to the stock exchanges worldwide to get my trades in and ahead of the pack
- I don’t have a floor filled with PHDs at my disposal
- I also don’t have a multi million dollar AI trading algorithms system
And that’s why I don’t day trade, because for retail investors like you and I, we’d be getting a good hiding like lambs to the slaughter. For those do, good luck! Seriously.
Tyson Tips for equities
Tyson Tips will beat the market in the short, medium and long term:
- Yes that includes the short term
- And yes – better than the Standard & Poor’s top 500 stock index (SP500 trackable using the ticker ^GSPC)
- Better than your IFA who would only sell you a range of products that basically track the market or worse.
Otherwise, what’s the point?
For example, just shifting your average annual compounded return from 10% to 12.5% means your money doubles in 5.5 years instead of 7.2 years. That’s something isn’t it?
Of course we’re aiming to get much higher returns.
Ultimately, what counts is your final wealth at the end of your experience as a retail investor.
Market Beating Returns. Profit. Fun.
Okay so that’s the bad news over with. Here comes the good news.
Scanning the markets worldwide, so you don’t have to.
I have designed, built and tested systems to scan the entire stock markets of the USA, UK, Europe and Australia to find stocks with potential
With the help of my engineers (some who just happen to have PHDs), we have deployed algorithms that use AI (neural networks in geek speak) to find the right time to buy and the right time to sell.
Finding the right time
How do I know when is the right time?
I don’t. Nobody knows the future. The reality is the market could go up, down, or sideways. But what I do know (or the AI does) is risk mitigation, that means the risk is reduced of any serious loss and your returns are far more improved.
Multiverse testing
We don’t take our AI for granted. I personally use advanced mathematical simulations to ensure all strategies and the resulting recommendations we make will withstand black swan events.
How? Unlike back testing (which is convenient), we simulate 100,000 multiverses as if there are 100,000 Tysons (mad I know!) over a 40 year period to see what is the likely return for most of the Tysons following a given investment strategy or trading pattern.
Why 40 years? Because anything that’s likely to stand the test of time means it’s a winner.
Not only do I simulate the likely return, I also simulate the worst case scenario to ensure any strategy doesn’t make us worse off, even in the event of black swans.
How Tyson Tips will work going forward
For Free subscribers, we will give you:
- Share tips identified by our system for adding to your watchlist
- Our overall track record to date
- Detailed track record reports showing past recommendations (after the fact i.e. share recommendations no longer in play and sold after the recommendation)
- Investment tactics in terms of how well they work (or don’t) – so even if you don’t sign up as a paid member, we’ll stop you losing money following the bad advice out there
- The chance to submit investment strategies for us to evaluate which could be featured in future issues
Paid subscribers will receive everything free subscribers get plus:
- Share tips identified by our system for adding to your watchlist
- When to buy
- When to sell
- Detailed reports on the recommendation performance
On reporting integrity, which is personally important to me, our accountants and lawyers are copied in to ensure we are fully compliant in reporting our true performance – and in general of course.
Please note that we don’t know when the tips will come. They may come all at once and for this reason we will charge an annual subscription.
Please don’t sign up to the monthly as you will be promptly refunded. We haven’t yet figured out a way to disable it (yet).
Our website TysonTips.com will also need updating to reflect our new exciting service. However I’m a mathematician philosopher not a salesman, so I’d rather spend the time helping us all profit than updating websites (for now!)
We will ensure you hear from us at least once a month.
What that means for you
If you’ve read this far, thank you!
To all of our paid subscribers that stuck with us during the difficult period, thank you!
If you find the above is too good to be true, stick with us along for the ride.
I’m convinced that you will see how successful we are, so much so that you will no longer be able to resist and join in the fun.
Watch this space. More will follow in the weeks ahead.
With fun and profit,
Tyson
