A CLOSED MIND RELEGATES YOU TO THE SAME OLD BAD OUTCOMES … STOP FOLLOWING THE CROWD!

EFFICIENCY

Fungibility - what does that mean?

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FUNGIBLE - adjective synonym: interchangeable, flexible

DEFINITION: 1) being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part, 2) readily changeable to adapt to new situations

If you took an entry level finance or economics class, you earned that “money is fungible”! Great word, love the concept, but while we learned a little about it, it doesn’t affect people in their everyday dealings.

You have been taught to save money in compartments that are separate for many reasons such as taxable vs tax deferred, risk, liquidity etc. This means - NO MORE FUNGIBILITY!

But who does THAT BENEFIT? What a DUMB IDEA!

ALL OF YOUR ASSETS TOGETHER EQUAL YOUR PORTFOLIO!

The CUMULATIVE annual return of ALL accounts, divided by the TOTAL starting value (adjusting for additions/subtractions) EQUALS YOUR TOTAL PORTFOLIO RETURN.

So if Wall Street TELLS you that PAST PERFORMANCE is NO INDICATION OF FUTURE SUCCESS, WHY does every solution that they present come with example of it’s past performance? Why doesn’t Wall Street present us with opportunities that give us a CLEAR and UNDERSTANDABLE view of the future? Is this why every solutions is “a la carte”?

By compartmentalizing your assets, Wall Street is able to separate your money into smaller components so that you lose ALL economies of scale, allows them to charge more fees, adds more complexity to the problem, ensures lower ongoing OVERALL RETURNS, AND …. eliminates the fungibility of your money.

This “divide an conquer” and make you overpay for underperformance!!

STOP GUESSING!! BUILD A PORTFOLIO THAT YOU UNDERSTAND AND WORKS JUST FOR YOU!

Take back control of your investments and reclaim your portfolio’s fungibility.

No more duplication of efforts and fees,

No more locking up money,

No more “solutions” that work for Wall Street and NOT FOR YOU!

WALL STREET acts like the WORLD IS FLAT!!

YOU KNOW THAT IT ISN”T!! WE’LL PROVE IT TO YOU!!

TAKE ADVANTAGE OF THE FACT THAT YOU’RE SMARTER THAN THEY ARE!!

BECAUSE YOU FOUND A NEW — PROVABLE — SOLUTION!!

JUST ASK US TO SHOW YOU!! We’re here waiting. It’s your money - treat it right!

S&P 500 INDEX YEAR END 2023 VALUE 4769

Yardeni Research: 5,400

Capital Economics: 5,500

Goldman Sachs: 5,100

Bank of America: 5,000

Barclays: 4,800

Societe Generale: 4,750

Morgan Stanley: 4,400

JPMorgan: 4,200

TODAY’S CLOSE = 5634

THEY WERE ALL WRONG IN 2023 TOO!

The WORLD IS NOT FLAT, its 2024 and things are different!

STOP GUESSING ABOUT TOMORROW! Ask us how to beat this system!

NO ONE CHALLENGES OR VALIDATES THE CLAIMS OF ADVERTISERS …. HAS ANYONE CHECKED THEIR MATH?

This is a real example of a big advertiser for investment advice.

MOTLEY FOOL "ALL IN" STOCK BUY ALERT

From January 1, 2022 - THIS IS THEIR CLAIM!

They say, “The “ALL IN” buy signal has happened only 92 TIMES in the history of the Motley Fool Stock Advisor”

The AVERAGE return of the stocks selected with the "ALL IN" buy signal is 635%

This CRUSHES the S&P 500 buy 4.5 TIMES

SPECIFIC EXAMPLES

AMAZON 21679%

NETFLIX 32389%

NVIDIA 7514%

BAIDU 1685%

SALESFORCE 3587%

TOTAL RETURN FROM THOSE STOCKS 66854%

AVG RET FOR THESE 5 PICKS 13371%

Now this is where a nerd like me is just curious, those are pretty impressive results for sure!!!!

So, the MATH says that the TOP 5 PICK RETURNS (66,854%) DIVIDED BY ALL 96 PICKS = a 696% average return.

The AD states that the “average return for ALL of the “ALL IN” BUYS IS 635%

THEREFORE THE "OTHER" 91 PICKS HAD CUMULATIVE LOSS OF -61%

SO MOTLEY FOOL “ALL IN” IS WRONG 91 OUT OF 96 TIMES OR IS WRONG 94.79% OF THE TIME!!!

Does THAT type of successful advice work for you?

By the way, they ran the same add on July 1 of 2021 with the same stock and similar claimed returns. Their math was the same as I’ve shown, they brag about being right in just 5% of their overall announcements!

Smart Structure Models, let us show you how to take control, STOP BELIEVING SUCH NONSENSE.

Ask us to show you how!

Taking off from the film, “gaslighting“ in contemporary usage means a form of intimidation or psychological abuse whereby false information is systematically presented to the victim, causing him to doubt his own memory, perception or even his sanity. In the investment management world, the overarching priority for the vast majority of money managers is to gather assets and revenues and only peripherally to provide quality performance for investors. Gaslighting is routinely used to try to obscure those priorities and to convince investors that, despite the reality of what they see, investing in product X or with firm y is a smashing good idea. [Bob Seawright - Money Management, May 4, 2016]

I came upon this blog while researching what others in the business have written about the “Wall Street” gaslight. My specific experiences were gathered over 30+ years in the advisory business. I tried to be near cutting edge of design and met with and engaged with some truly brilliant award winning academic people over the years. These people weren’t bad guys, or foolish or schemers, they were simply guilty of peddling solutions that had little actual science, coupled with voluminous mathematical iterations, attached to verbose papers making grand assumptions, all which violate a great Jack Bogle quote: “We deceive ourselves when we believe that past stock market return patterns provide the bounds by which we can predict the future”.

My favorite real world example of this came from many interactions with the sales folks and then the higher ups at SEI Corporation. This firm is exemplary, advising, managing or administering for Trillions of dollars in assets. They are the “smart guys” for the smart guys who are looking for better solutions.

So imagine my excitement when I read their

Commentary of Feb 2015 - “Diversification: The Perils of Nearsightedness” an excellent paper discussing how important Asset Allocation is to successful investing.

Commentary April 2015 “Manager of Managers”. Of course!, add some extra security to this concept, makes perfect sense!

Commentary “SEI - Same Ways New Answers - April 2018 - “Diversification: the BORING WINNER”. That also made perfect sense, after all, you don’t chase the flashy untested ideas, you play it slow and steady.

Then I happened to go back and do some more research and came across a Commentary October 2013 - “When Diversification Fails and Why We Still Believe”.

HUH???!!! They KNEW they wrote a paper discussing that “Diversification Fails” yet they STILL published the other three papers!!

EVERYONE ELSE ON WALL STREET - PEDDLE SOLUTIONS TO WALL STREET - NOT YOU! Your advisor ‘wants’ the new solution he’s espousing to work like a charm, but if it doesn’t HE STILL GETS PAID! Only YOU care if it works!

Or, as the old Broker joke says: …. “Mr. Client, I made money, my company made money, and 2 out of 3 aren’t bad sir”.

It’s funny, when i showed the hedge fund administration people my fund concept (which is now Smart Structure Models), they commented “Wow, that works! Every end investor will buy that concept, they’d be fopolish not to.” I excitedely said “so why don’t you guys start using this concept”? Their honest response: “we have 5000 employees and advise to Trillions of assets, we don’t want anyone to know what you just showed us”.

We are here to make you Smart Investors who control your financial future. Just ask and we’ll show you how!

CIOs and consultant-advisors oversee about $10 trillion of institutional assets in the US. They have underperformed passive management by one to two percentage points a year since the Global Financial Crisis of 2008 (GFC).

1 They rely heavily on expensive alternative investments; and the more they have in alternatives, the worse they do.

2 Large institutions use scores of managers, making them high-cost closet indexers. Inefficiency abounds.

What is lacking in institutional fund management today? Intellectual rigor, for one thing. The professionals are ignoring their canon. Lawyers coming before the bar are expected to know the law. Physicians, conspicuously, in my experience, attempt to adhere to the best medical science. Engineers do not improvise when designing bridges. But the people managing institutional assets behave not like they attended the Booth, Säid or Wharton schools to study finance but Hogwarts School of Witchcraft and Wizardry

The screener, part of the Banking Initiative at Florida Atlantic University, is a quarterly report measuring banks’ exposure to risk based on their unrealized losses in their portfolios of investment securities. Four banks had losses that exceeded their equity capital: Union City SVGS Bank, where unbooked losses equaled 172.7%; Citizens ST Bank, where unbooked losses equaled 121.4%; Green Dot Bank, where unbooked losses equaled 108.6%; and First America TR, where unbooked losses equaled 104%.

Larger banks on the list with more than $10 billion in equity had unbooked security losses more than their equity capital:

Charles Schwab, where unbooked losses equaled 64%;

USAA Federal Savings Bank, where unbooked losses equaled 67% of their equity capital;

Bank of America NA, where unbooked losses equaled 58%.

Rising rates have had a negative effect on the balance sheets of many banks regarding their unbooked securities losses.

“It’s likely that losses in the second quarter could be far greater as the yield on the 10-year treasury rose from 4.21% at the end of this quarter to 4.48% most recently,” Cole said. “There also are many smaller banks with less than $1 billion in assets facing similar risks; 22 have unbooked losses greater than 100% of their equity capital and 275 have losses greater than 50%.”

The WSJ says: “Tougher Stress Tests Are No Big Strain for Banks”

Does ANYONE tell the whole truth anymore? Look at the fines etcv paid by these giant banks over the past 20 years (Pillars - Is this who you ask for advice?)

STOP GUESSING! BUILD A PORTFOLIO TAHT PROTECTS YOU WITHOUT REDUCING GAINS!

We are here to show you, just ask!

It’s a stock picker’s market. So why aren’t more stock pickers doing better?

In theory, active fund managers, who try to pick the best investments and avoid the worst, should excel when some stocks zig as others zag and when the gap between the winners and losers is wide.

By some measures, that’s the kind of market we’re in right now. An index of implied correlation from Cboe, the Chicago-based exchange, suggests that the extent to which stocks move up and down in unison is near record lows. Meanwhile dispersion—a measure of how widely the returns of individual stocks differ from the average—is abnormally high.

If stocks are moving up and down together much less than usual, and the winners and losers are even farther apart than normal that should be ideal for stock pickers. In the first half of 2024, according to Morningstar, only 18.2% of actively managed mutual funds and exchange-traded funds that compare themselves to the S&P 500 managed to outperform it.

That’s down from 19.2% in the first half of last year and 19.8% in all of 2023.

According to SPIVA NO MANAGER stays in the top 25% of all managers, LET ALONE OUTPERFORM THE INDEX for 5 years in a row.

(What is SPIVA? SPIVA stands for 'S&P Indices versus Active Managers'. The SPIVA reports are published by S&P Dow Jones Indices, a division of S&P Global.)

That pokes a hole in one of Wall Street’s most cherished narratives—namely, that it’s worth paying a premium for active management and that stock pickers are sure to do better at some times than at others. The funds’ travails are a reminder of a basic rule: The asset-management industry depends more on marketing than on markets.

The Traditional Wall Street allocation solution DOES NOT WORK!! IT NEVER HAS!!

The fact bear this out, look at our prior blog about “Asset Allocation - Financial Snake Oil” The facts are absolute, but NO ONE talks about A DIFFERENT SOLUTION for one simple reason — THEY DON’T HAVE ONE!

SMART STRUCTURE has changed the game. STOP GUESSING and get a PROVABLE GUARANTEED SOLUTION …

We are here to shed light on Wall Street’s BS. Just ask us to explain it to YOU!

Just 5 days after warning S&P500 will plummet 23% by year end, Marko Kolanovic announce he is “stepping away” from the bank after 3 YEARS of POOR STOCKCALLS.

HEDGE FUND RETURNS 1ST HALF 2024

And the big boys STILL aren’t beating the Markets!

Diversification seems to always underwhelm…

The SEC cracks down… or so they say.

It all begins with an idea…

Fees, fees and more fees…