What Others Think About Our New Trend Indicator
Last week I asked our readers and members what they thought of our new Long-short Strength Indicator (LSSI). Here is a reaction from one of our members. I believe that his thoughts on how to use the indicator in combination with our other trend signal the MATI for his tax-deferred and taxable accounts are worth sharing here.
Please see here below the feedback we got from Gary MacNeil from Long Beach, NY on our new trend indicator.
Hi Van Beek,
Sorry for the delay in getting back. I had a raft of deadlines over the past two weeks.
First, I just sent a suggestion to Michael Covel to interview you for his podcast. Your work deserves more exposure.
I for one LOVE the new LSSI system. It gives a much more granular calibration of the current state of the trend, and I would greatly appreciate such a tool. It would enable me to adjust my holdings according to the changing probabilities at different stages of a trend, and this would be fantastic. To me, that's what trend following is -- mechanically following the probability of the trend's future movement, and any tool that can better keep me in sync with the ever-rising and falling probabilities of the trend will give me an edge.
I already see how helpful it would be, for example, in enabling me, during a looming downtrend, to lighten up on some holdings in a tax-deferred account (where there is no short-term tax penalty for jumping in and out more frequently to enhance my downside protection) ... while, conversely, the MATI will allow me to comfortably follow the longer-term MATI in my taxable account, where I prefer to follow a longer-term trend and not get hit with the much higher tax rates for short-term trading.
I wanted to consider this from every angle, so I asked myself, "The MATI is so beautifully simple. Will the LSSI add new and unnecessary layers of complexity, giving your readers so much information that they become confused?"
After thinking this through, I have to vote, "no." While there's always a virtue in simplicity, I think that investors like me will welcome the additional insights and flexibility that the LSSI would provide. As Einstein famously said: "Make things as simple as possible, but not simpler.” For me, the LSSI would be exactly what I've been looking for and a perfect complement to the MATI.
There are many other highly successful newsletters that don't rely on a single, simple approach. Publications such as Value Line, Morningstar, etc., offer in-depth, complex analyses and recommendations, somewhat overwhelming at times, yet rank among the most successful investment newsletters in the world. On the other side of the coin, I don't know of any newsletters based on severely simplified approach that has been around too long.
Back in the 1980s, there was a newsletter published in the US by Dick Fabian, based on nothing more than a 39-week moving average crossover system. Compared with your system, it was so simple as to be almost simple-minded. It was popular for a while, but was so unreliable, and got whacked with so many whipsaws, that Dick's son, Doug Fabian, who now writes the letter, abandoned it completely and turned the letter, from what I gather, into a fundamental-style publication. Point being, simple is nice, but results are what count.
Another example. I also get a trend following newsletter I like called the Sector Timing Report. It gives a lot of trend-following data and no less than five model portfolio recommendations in each monthly issue...plus lots of "mix-and-match" possibilities, depending on one's goals, risk appetite, access to various investments in a typical retirement plan, etc.
At first, I found all this info a bit daunting, but in the end, the more flexible the tools, the more one grows to appreciate and then depend on them, which is what I found with this newsletter. (A suggestion I sent to them is to please have a shorting portfolio for when the market is in a major downtrend. They are considering it.)
In sum, I love the LSSI and fervently hope that you'll offer it in your outstanding service.
All the best, Van Beek,
My sincere gratitude goes to Gary for sharing his experience and views. I have added the links in his text for the convenience of all other readers.
After getting such a feedback, I have to give you of course the link where you can sign up for our Stock Trend Investing system. Here it is.
And don’t hesitate to send me any questions you might have on our LSSI and MATI signals or on my stock investing approach in general. I always reply to your emails personally.