Tango5 Investing Method by Don Wilson May 10, 2007 PowerPoint accessible at donsfunds

Presentation Transcript

Tango5 Investing Method by Don Wilson May 10, 2007 PowerPoint accessible at www.donsfunds.com

"This evening I Will Show You" What the level of hazard is in the market today – quickly. 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 on the off chance that you take after the principles.

My Background Let's take an excursion. Mechanical Engineer – specialized person Small entrepreneur last 30yrs Cashed Out in 1987 Started contributing with Fundamental Analysis Now mechanical broker utilizing Technical Analysis Since 1997 been contributing the Tango5 way

Origin of Tango5 To instruct 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 am aware of are beneficial Tango5 has been running "continuous" for a long time Uses FastTrack and Amibroker Software and "freeware" Trade and Tradefr

The Market Timing Question

My Concern – Risk of Deep Bear Markets Market Timing is truly "Hazard Management"

Tango5: What is it?

Tango5 at www.donsfunds.com A completely created and recorded exchanging framework When to purchase What to purchase How to deal with your possessions When to pitch How to deal with your cash How to track your exchanging history The product "pre-bundled" to run the framework

Tango5 Is Also "Semi Automated" to spare time Almost "Turnkey" speculation prepare Almost "Autopilot" being used A substantial "dosage" of my venture theory Novice Investor - Like driving your auto - Start the engine Put it in apparatus Steer and Brake Expert Investor – Just utilize it.

Tango5 Is Also A Teaching Tool Graphs and Indicators Displayed Fund Ranking and Selection Displayed Money Management Reports Displayed

"And It Is Free" Caveats: Must have abnormal state of PC abilities or know somebody that can help you. Extensive set up detail. It requires your investment and exertion.

Market Timing My involvement with "Market Timing Models" since 1994 Why? Keeps you out of "Profound" Trouble Timing is "Hazard Control" not for Performance Tango5 is not a "Black Box", thoroughly open Tango5 MRI (advertise timing) is all you require MRI "Oversaw Risk Investing"

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 recreation of the past. It is flawed "Back testing is a guess of what may occur later on"

Statistics | Charts | Trades | Formula | Settings | Symbols Backtest Example Tango5 Bear Market Years Backtest Results from the Amibroker Custom Backtester Getting "in & out of the market" at precisely the wrong time FT information beginning 03/21/2000 – 10/07/2002, 2 1/2 years bear showcase 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 positions

Who Is Tango5 For ? Venture Level Beginners ? Venture Level Average ? Venture Level Advanced ? It can be for all levels

What Do You Need to be Successful Control of Market Risk What to Buy, Fund Selection How to Manage Your Portfolio

Market Cycles - "Are they Real" "Yes" Secular Cyclical & Intermediate

Secular Bull & Bear Markets since 1802 - Range 8 to 20 years There is a clear example here ! What causes these cycles? Dread and GREED , yes however that is to straightforward. 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 money related markets.

Another Illustration of the Cycling of Valuation Corresponding to Secular Bull and Bear Markets throughout the previous 100 years

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 buyer markets begin after the trough of beneath normal P/Es Secular bears begin after the pinnacle of better than expected P/Es +2% +317% - 80% 200% - 38% +774% - 10% +1214% ???% Despite market decreases in the 2000s, P/Es stay better than expected and slanting lower − the potential indication of a momentum common bear advertise 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 stock exchange cycles are driven by patterns in the value/income proportion (P/E) Secular buyer markets begin after the trough of underneath normal P/Es Secular bears begin after the pinnacle of better than expected P/Es +2% +317% - 80% 200% - 38% +774% - 10% +1214% ???% Despite market decreases in the 2000s, P/Es stay better than expected and inclining lower − the potential indication of a flow mainstream bear showcase 1,000 100 10,000

Is the Four Year Cycle Always Four Years? "NO" Lets Take a Closer Look

The Average of the Last 60 Years is 4.02 years. In any case, the Range is from 2.68 yrs to 5.31 yrs

Intermediate Term Cycle - Weeks to Months Indicated by OTC New High/Low Summation NASDQ(OTC) Composite NASDQ 52 week High/Low Oscillator

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 Timing

Rutvol Plus Tango Summary = Tango5 Intermediate Timing The RUTVOL test has passed. Facilitate 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 market. Handle interests as per Tango5 Fund Management When Tango5 is demonstrating BUY.

Ranking Explained RSI/Stochastic = RSI/2 + Stochastic/2 NCAlpha = Alpha without the relationship segment Ulcer Index = the negative part of Standard Deviation Ranking = RSI/Stochastic + NCAlpha – Ulcer Index Absolute numbers are then weighted for Rank count

Note this table rehashed For Mid & Low Risk

Note this table rehashed For Mid & Low Risk

Example Sector Ranking

Example second Sector Ranking

Amibroker "X-ray" Charts "Oversaw Risk Investing"

Tango5 ruttr Indicators - Russell2000

Tango5 rutvol Buy Indicators – Russell2000

Tango5 Dominant Market Indicators-OTC/NY

Ann 18.96 MDD 8.83 Win % 72.18 PayRatio 3.46 tamrankDW, 6% trailing quit Starting value 50K, 09/20/89 to 06/16/05

tamrankDW, 6% trailing quit Starting value 50K, 09/15/02 to 06/16/05

Tango5 Holdings DrawDownFT File

Tango5 Amibroker DD (DrawDown) Chart

Tango5 Sample Portfolio Equity Chart versus S&P 500 Composite Tango5 Sample Portfolio (dark)

That's the Output File Package Market timing – MRI (Managed Risk Investing) Fund Screening & Ranking Fund Holdings Management Portfolio Management

Back Testing Tango5 A more broad take a gander at results

Mid Risk Back Test Results

Investing's Two Major Forces 1. Strategy - 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 Hudson

Wrap up - Risk When Investing You can't control the "Advertise Action" You can control "Hazard" Tango5 unequivocally situated towards controlling "Hazard": from Ma