Are You Smarter than a Billionaire?

Jun 20, 2017 Investing Strategies

Are you smarter than some of the world’s top billionaire investors? Could you beat Bill Gates by 219%, Prem Watsa by 266% and Warren Buffett by 145%? Find out what these richest investors know.

If you’re using TradeStops you can… and you can do it while you’re asleep or on the golf course.

When I first started investing my own money, I didn’t have an exit strategy, so the gains I made quickly evaporated as the “dot com” stocks began to break down.

I began using 25% trailing stops as that was popular with some of my favorite newsletter writers. But I instinctively knew that a one-size-fits-all trailing stop was not the answer. That’s the reason I developed the Volatility Quotient (VQ).

I needed a way to know the exact amount of risk I should take on any stock. I needed a way to stop guessing about what to do. I needed a way to outsmart myself by letting my winners defy my expectations rather than letting my losers get away from me.

I’m happy to report that my VQ has done all that and more… and it could have done the same for some of the world’s most well-known investors.

Take Bill Gates, for example.

Gates bought Cabot Oil and Gas (COG) after the market had bottomed in 2009. For whatever reason, Gates got out of the trade in early 2011 with a small 11% gain. That’s not bad.

However, had he been using the TradeStops VQ to decide when to sell, he would have gotten out more than 3 years later with a gain of 230%.

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You don’t have to be smarter than Bill Gates to have beaten him by 219% on this stock.

Prem Watsa, commonly referred to as “the Warren Buffett of Canada” had a similar experience. He invested in Methanex Corp. (MEOH) in 2009. According to his own reasoning, he exited the trade several months later with a nice gain of 45%.

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Had he known about my volatility-based trailing stops, he could have made 600% more on his investment and went from a short-term gain to a long-term profit.

And even the “Oracle of Omaha” himself could have benefited from my VQ stops. Look at this trade he made in CVS Health Corp. (CVS). Buffett bought CVS in late 2011 and sold out in late 2012.

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CVS had a VQ of only 20% when he made his investment. And that VQ dropped to 12% when it finally stopped out in late 2015.

Had Buffett been using a volatility-based stop, he could have had greater than a 10x profit on his investment in CVS.

Are you and I smarter than Gates, Watsa and Buffett? I don’t know… but it doesn’t matter. What matters is that we have a system that lets the fundamental unpredictability of the stock market work for us instead of against us,

Richard_Signature
Richard Smith, PhD
CEO & Founder, TradeStops

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