We employ a proven strategy with clear advantages over traditional
money managers using tools they choose not to employ
“It is okay to be wrong, it is not okay to stay wrong!”
Max Power Alpha Management
We have been in the investment arena for over a combined forty years and charting the markets for thirty plus. We believe all financial market analysis; fundamental, quantitative, cyclical, etc. will inevitably reveal technical supply and demand patterns through chart formations.
We imagine you have heard the phrase “There is always a Bull Market somewhere.” We believe in that philosophy and have designed a system to ferret out just where the Bulls are. Sometimes these moves will last just a few days and can show up in the darndest places, even in Bear Funds.
We use market timing and realize many money managers and others say “No one can time the market.” Which is code for “I have no clue how to time the market?” We employ a proven strategy with clear advantages over traditional money managers and update our indicators regularly.
How Max Power Alpha Works
(learn more about our four key tenets by clicking the tabs below)
Arguing with the Market, which I have done, is essentially akin to arguing with the Truth. A losing proposition. Have you ever heard a money manager or pundit say “The market just doesn’t get it.” Not a sign of credibility. We have a tremendous respect for the collective consciousness the financial markets represent. There is little stasis which is why and where we believe opportunities exist.
For example relationships among asset classes often morph and can leave past high probability decision making now in the red. Identifying those changing relationships early are just an example of how to take advantage of new signals as they unfold. New signals are a dynamic we focus on regularly.
The market advances about 75% of the time, the other 25% it descends. Down markets have a different look then up markets as equities tend to take the escalator up and the elevator down i.e. The Covid Correction. Often vulnerable signals will form prior to the start of a downtrend.
100% Money Market is a frequently used strategy and often effective in reducing losses and improving performance. We are in search of absolute returns and producing positive annual performance, even in down markets. So far so good.
Alpha is the spread between a portfolio’s performance and its benchmark, in our case the S&P 500. Just as we are attempting to generate absolute positive returns, we look to outperform the S&P 500 every year. Most growth fund managers fail to regularly beat the S&P 500 and they tend to mimic the performance at best. That portion of an investors portfolio is best served with index funds.
The ability to leverage the major indices when probabilities present themselves along with Inverse Funds when the market is vulnerable is the core process we use to create Alpha. Overweighting deeply oversold sectors is also a key component. We call this strategy “Put your eggs in one basket and watch it closely.”
An important distinction.
Not Okay To Stay Wrong!
You do not have to be market savvy to know that no strategy is infallible, including ours. Contrarian consequential news will nearly always undermine even the strongest of signals. Sometimes the signal just fails. We have spent our allotted time arguing with the market and now have arrived at our senses.
Humility is a characteristic we am proud to possess, personally and professionally. We coined the phrase a while back “The sooner I admit I am wrong, the sooner the relevant info reveals itself.” That maxim has saved our clients a lot of money. Hoping and guessing we will eventually be right has been an overall ineffective strategy.
“We can be nimble and opportunistic which sometimes creates a flurry of activity.”
We have built a quiver of chart patterns/indicators which tend to produce predictable, dependable, and profitable moves. These patterns cycle through various indices/sectors on a periodic basis. One week the Energy stocks might be in formation and next Technology, then Small Caps.
We can be nimble and opportunistic which sometimes creates a flurry of activity. Many believe activity is a sign of risk and that is clearly not necessarily true. The ability to move 100% to the Money Market fund when we are unsure removes us from harm’s way and reduces the risk profile of the portfolios.
The platform we use to allocate the portfolios is the Guggenheim Rydex Funds. These funds are not designed to beat the market, but to mimic index and sectors. It is an extensive lineup including leveraged and inverse funds. The fund family does not charge fees or commissions to reallocate portfolios.
“A key strength I bring to the table is the ability to easily admit we are wrong.”
The performance of the Max Power Alpha portfolios are tracked by Austin based Theta Research. If you would like to review their up to date analysis please visit their website.
Taking cover in money markets and Treasuries until the downtrend has shown exhaustion is the typical way to preserve capital in volatile markets. Often the down markets will provide as strong a signal as is produced in Bull Markets and using Inverse Funds allows for profiting from the corrections.
The strategy is dynamic and nimble which is number one designed to preserve capital. Many consider this counter intuitive as activity is often associated with risk. Over 40% of the time our portfolios are 100% in money market funds. Avoiding falling knives can reduce risk considerably and improve performance.
When strong bullish patterns occur the strategy will employ leverage. When patterns are not as strong a partial position will be taken. When in doubt the government money market fund is used.
A key strength I bring to the table is the ability to easily admit we are wrong. With clues from the financial markets morphing regularly, humility keeps our learning curve constantly moving up and to the right. I also believe it is an important component in keeping losses to a minimum.