How We Beat the Billionaires… by 47%!

By: TradeSmith Research Team

Aug 29, 2017 | Investing Strategies

Great investing ideas are everywhere. But even the savviest investors can miss big opportunities hiding right in front of them.

For instance, TradeStops Billionaires’ portfolios allow Lifetime subscribers to piggyback on the research and stock-picking strategies of over a dozen of the world’s most accomplished investing minds.

Yet, using TradeStops tools – and a simple strategy anyone can duplicate – allowed our team to “beat the billionaires” by an average of 47%.

Here’s how the strategy works, and how any TradeStops subscriber can use it to create your own “Ultimate Portfolio” in minutes.

We revealed the beginnings of this strategy two months ago by looking at a few of the individual trades by Bill Gates, Prem Watsa, and Warren Buffett.

Since then, we’ve dug even more deeply into their investment activities and unearthed profits our billionaires likely missed.

Each of our billionaire investors use their own proprietary research to analyze and choose the stocks they want to own. Most of their research focuses on underlying fundamentals of stocks they’re interested in. It’s a sound approach that anyone would do well to put in practice.

Yet taking that approach a step further – and applying TradeStops’ Stock State Indicator (SSI) rules – would have made almost 50% more money!

If TradeStops can get that kind of dramatic increase from investors like Buffett, Watsa, and Gates, imagine what it can do for you.

Before we show you the individual results, these are the rules that we used to beat the billionaires:

  1. We use their own investment research and only invest in stocks they own;
  2. Stay out of the Red Zone! If a stock they own is in the SSI Red Zone, we won’t buy that position;
  3. If a stock that was initially in the SSI Red Zone triggers a new SSI Entry signal, and the billionaire still owns the stock, we will then buy that stock;
  4. If the billionaire sells a stock that is still in the SSI Green Zone or Yellow Zone, we will continue to hold that stock until it enters the SSI Red Zone;
  5. Once the portfolio was determined, we used our proprietary Risk Rebalancer to equalize the risk in each stock.

Pretty simple, right? Simple but powerful. Check out these before and after results that show how the publicly traded investments of the billionaires could have benefited from the simple tools of TradeStops:

Editorial_Apr21_01

TradeStops outgained eleven of our 12 Billionaires — a better than 92% win-rate against some of the best in the business!

Average Annual Return Improved 47%

  • 12.6% with TradeStops
  • 8.6% without TradeStops

Over a 10-year period of time, with an initial investment of $100,000, the TradeStops portfolio would have grown to over $327,000 while without TradeStops, that number is only $228,000. That’s an increase of almost $100,000 by using TradeStops!

Take a look at the top line of the table.

David Einhorn is considered one of the most intelligent investors in the world and TradeStops more than doubled his return. Remember, this was using Einhorn’s own stocks.

It’s clear these investors choose great stocks using their fundamental research. By applying the TradeStops rules, the results are even more outstanding.

You don’t need to actually access the “Billionaires Club” on TradeStops to achieve similar results. If you have a good source of stock picks, create a Watch portfolio of the stocks and apply the same rules that we applied to the Billionaires’ portfolios.

Billionaire fundamentals + TradeStops SSI tools = the TradeStops mantra.

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