Archive Category: Infinite Momentum Alert Archive

As you’ll see in the table below, our 10-stock portfolio netted a 1.1% return over the four-week holding period between July 26 and August 23. That’s a positive result … not hugely positive, of course. But as I’ll show you next week in my separate performance review of our first year trading the Infinite Momentum strategy, every little bit counts … and even a small- to medium-sized edge over the market can produce a tremendous total return advantage over the long run.

When an investor can compound capital at an annual rate north of 30%, the long-run returns become truly eye-popping. Do that for 25 years, and you’re talking about a total return in excess of 150,000%. That’s enough to turn a $10,000 starting stake into $15 million.

In last week’s Performance Review note, we ended with an open question about whether concentration in a single sector or industry group is a good or bad idea. The question emerged as we learned that, although we beat our blended benchmark (+2.8% vs. +1.9%) last month, we might have done even better had we not owned three “shipping” stocks, which lost 10.7%, 10.9%, and 15.6% during the four-week holding period in focus.

As you’ll see in the table below, our 10-stock portfolio netted a 2.8% return over the four-week holding period between June 28 and July 26. A positive return is always good — but how good is it? Whether or not the quote is accurately attributed, I often think of what Einstein (supposedly) said about relativity:

Last week, I promised we’d have a look at one of our current holdings, American Superconductor Corp. (Nasdaq: AMSC), through the lens of our three-factor Infinite Momentum system. Shares of AMSC are up an incredible 168% year-to-date, far outpacing the already-strong performance of the S&P 500. Have a look: