Tango5 Investing Method by Don Wilson May 10, 2007 PowerPoint accessible at www.donsfunds.comSlide 2
"This evening I Will Show You" What the level of danger is in the business sector today – any day. Should I be "In or Out" Top 1% of 3000 + No Load Mutual Funds - any day Make "great cash" year in and year out. Just in the event that you take after the tenets.Slide 3
My Background Let\'s take a trip. Mechanical Engineer – specialized person Small entrepreneur last 30yrs Cashed Out in 1987 Started contributing with Fundamental Analysis Now mechanical merchant utilizing Technical Analysis Since 1997 been contributing the Tango5 waySlide 4
Origin of Tango5 To educate my grown-up youngsters how to contribute Expanded to family & some dear companions Expanded to Web Site & a few 100 clients All the clients I know of are gainful Tango5 has been running "continuous" for a long time Uses FastTrack and Amibroker Software and "freeware" Trade and TradefrSlide 5
The Market Timing QuestionSlide 6
My Concern – Risk of Deep Bear Markets Market Timing is truly "Hazard Management"Slide 7
Tango5: What is it?Slide 8
Tango5 at www.donsfunds.com A completely created and recorded exchanging framework When to purchase What to purchase How to deal with your property When to offer How to deal with your cash How to track your exchanging history The product "pre-bundled" to run the frameworkSlide 9
Tango5 Is Also "Semi Automated" to spare time Almost "Turnkey" venture handle Almost "Autopilot" being used An overwhelming "measurements" of my speculation theory Novice Investor - Like driving your auto - Start the engine Put it in apparatus Steer and Brake Expert Investor – Just utilize it.Slide 10
Tango5 Is Also A Teaching Tool Graphs and Indicators Displayed Fund Ranking and Selection Displayed Money Management Reports DisplayedSlide 11
"And It Is Free" Caveats: Must have abnormal state of PC abilities or know somebody that can help you. Significant set up subtle element. It requires your investment and exertion.Slide 12
Market Timing My involvement with "Business sector Timing Models" subsequent to 1994 Why? Keeps you out of "Profound" Trouble Timing is "Danger Control" not for Performance Tango5 is not a "Black Box", thoroughly open Tango5 MRI (market timing) is everything you need MRI "Oversaw Risk Investing"Slide 13
How Does it Perform Tango5 Back Test Example Backtest Results from the Amibroker Custom Backtester. All FT information, 15 years of history. High Risk Portfolio 22.72 ann, 13.56 mdd, win rate 73%, holding 4 positions, 8% trailing stop Mid Risk Portfolio 19.77 ann, 10.87 mdd, win rate 68%, holding 4 positions, 6% trailing stop Low Risk Portfolio 16.49 ann, 7.43 mdd, win rate 64%, holding 4 positions, 3% trailing stop *Note Back testing is a reproduction of the past. It is defective "Back testing is an estimate of what may happen later on"Slide 14
Statistics | Charts | Trades | Formula | Settings | Symbols Backtest Example Tango5 Bear Market Years Backtest Results from the Amibroker Custom Backtester Getting "in & out of the business sector" at precisely the wrong time FT information beginning 03/21/2000 – 10/07/2002, 2 1/2 years bear advertise High Risk 9.76 ann, 8.30 mdd, win rate 80%, holding 4 positions Mid Risk 11.29 ann, 6.77 mdd, win rate 75%, holding 4 positions Low Risk 10.53 ann, 3.21 mdd, win rate 70%, holding 4 positionsSlide 15
Who Is Tango5 For ? Speculation Level Beginners ? Speculation Level Average ? Speculation Level Advanced ? It can be for all levelsSlide 16
What Do You Need to be Successful Control of Market Risk What to Buy, Fund Selection How to Manage Your PortfolioSlide 17
Market Cycles - "Are they Real" "Yes" Secular Cyclical & IntermediateSlide 18
Secular Bull & Bear Markets subsequent to 1802 - Range 8 to 20 years There is a clear example here ! What causes these cycles? Trepidation and GREED , yes however that is to basic. Michael Alexander, Andy Kessler, and Ed Esterling\'s examination demonstrates that "Advancement Waves" particularly since the "Mechanical Revolution" have the impact of making long cycles in monetary markets.Slide 19
Another Illustration of the Cycling of Valuation Corresponding to Secular Bull and Bear Markets throughout the previous 100 yearsSlide 20
Copyright 2006, Crestmont Research (www.CrestmontResearch.com) 1.00 10.00 100.00 1,000.00 10,000.00 100,000.00 1910901091109210931094109510961097109810991190119111921193119411951196119711981199129012911292129312941295129612971298129913901911392139313941395139613971398139914901491149214931494149514961497149814991590159115921593159415951596159715981599169016911692193169416951696169716981699179017911792179317941795179617971798179918901891189218931894189518961897189818991990199119921993199419519961997199829092000200120022003200405 0 15 30 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 SECULAR STOCK MARKETS EXPLAINED Dow Jones Industrial Average: 1900-2005 P/E Ratio (trailing) Secular securities exchange cycles are driven by patterns in the value/income proportion (P/E) Secular buyer markets begin after the trough of beneath normal P/Es Secular bears begin after the crest of above-normal P/Es +2% +317% - 80% 200% - 38% +774% - 10% +1214% ???% Despite business sector decreases in the 2000s, P/Es stay above normal and inclining lower − the potential indication of a flow mainstream bear market 1,000 100 10,000 Copyright 2006, Crestmont Research (www.CrestmontResearch.com) 1.00 10.00 100.00 1,000.00 10,000.00 100,000.00 1910901091109210931094109510961097109810991190119111921193119411951196119711981199129012911292129312941295129612971298129913901911392139313941395139613971398139914901491149214931494149514961497149814991590159115921593159415951596159715981599169016911692193169416951696169716981699179017911792179317941795179617971798179918901891189218931894189518961897189818991990199119921993199419519961997199829092000200120022003200405 0 15 30 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 SECULAR STOCK MARKETS EXPLAINED Dow Jones Industrial Average: 1900-2005 P/E Ratio (trailing) Secular securities exchange cycles are driven by patterns in the value/profit proportion (P/E) Secular positively trending markets begin after the trough of underneath normal P/Es Secular bears begin after the top of above-normal P/Es +2% +317% - 80% 200% - 38% +774% - 10% +1214% ???% Despite business sector decreases in the 2000s, P/Es stay above normal and slanting lower − the potential indication of a momentum common bear market 1,000 100 10,000Slide 21
Is the Four Year Cycle Always Four Years? "NO" Lets Take a Closer LookSlide 22
The Average of the Last 60 Years is 4.02 years. In any case, the Range is from 2.68 yrs to 5.31 yrsSlide 23
Intermediate Term Cycle - Weeks to Months Indicated by OTC New High/Low Summation NASDQ(OTC) Composite NASDQ 52 week High/Low OscillatorSlide 24
Market Timing Components for Tango5 Explained 1. Rutvol utilizes Price-R2000, Total Volume NASDQ 2, Tango5 Summary: Dominant Market Relative Strength of NASDQ versus NYSE Uses Data from Dominant Market NASDQ or NYSE for: Market Environment 30yr Bond, Price Osc., McClelland Summation Price Risk Factor Two Oscillators Advance/Decline Risk Factor Two Oscillators Hi/Low (52 week) Risk Factor One Oscillator Rutvol Plus Tango Summary = Tango5 Intermediate TimingSlide 25
Rutvol Plus Tango Summary = Tango5 Intermediate Timing The RUTVOL test has passed. Further investigation is required. Information by www.FastTrack.Net The Total for 09/01/06 is 4 or above. We ought to be put resources into the business sector. Handle interests as per Tango5 Fund Management When Tango5 is showing BUY.Slide 27
Ranking Explained RSI/Stochastic = RSI/2 + Stochastic/2 NCAlpha = Alpha without the relationship part Ulcer Index = the negative segment of Standard Deviation Ranking = RSI/Stochastic + NCAlpha – Ulcer Index Absolute numbers are then weighted for Rank estimationSlide 28
Note this table rehashed For Mid & Low RiskSlide 29
Note this table rehashed For Mid & Low RiskSlide 30
Example Sector RankingSlide 31
Example second Sector RankingSlide 32
Amibroker "X-ray" Charts "Oversaw Risk Investing"Slide 33
Tango5 ruttr Indicators - Russell2000Slide 34
Tango5 rutvol Buy Indicators – Russell2000Slide 35
Tango5 Dominant Market Indicators-OTC/NYSlide 36
Ann 18.96 MDD 8.83 Win % 72.18 PayRatio 3.46 tamrankDW, 6% trailing quit Starting value 50K, 09/20/89 to 06/16/05Slide 37
tamrankDW, 6% trailing quit Starting value 50K, 09/15/02 to 06/16/05Slide 38
Tango5 Holdings DrawDownFT FileSlide 39
Tango5 Amibroker DD (DrawDown) ChartSlide 40
Tango5 Sample Portfolio Equity Chart versus S&P 500 Composite Tango5 Sample Portfolio (dark)Slide 41
That\'s the Output File Package Market timing – MRI (Managed Risk Investing) Fund Screening & Ranking Fund Holdings Management Portfolio ManagementSlide 42
Back Testing Tango5 A more broad take a gander at resultsSlide 43
Mid Risk Back Test ResultsSlide 44
Investing\'s Two Major Forces 1. Technique - arrangement - Tango5 2. Feeling - arrangement - Discipline(Tango5) Refer to "Mean Markets & Lizard Brains" by Terry Burnham and "Anticipating the Markets of Tomorrow" by James P O\'Shaughnessy and "The (MIS) Behavior of Markets by Benoit Mandelbrot & Richard L HudsonSlide 45
Wrap up - Risk When Investing You can\'t control the "Business sector Action" You can control "Hazard" Tango5 unequivocally situated towards controlling "Danger": from Ma
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