by Bret Rosenthal | @bretrosenthal

 

“Social trends have conspired to root out belief in secrets:

People are scared of secrets because they are scared of being wrong. By definition, a secret hasn’t been vetted by the mainstream. If your goal is to never make a mistake in your life, you shouldn’t look for secrets.

The prospect of being lonely but right – dedicating your life to something that no one else believes in – is already hard. The prospect of being lonely and wrong can be unbearable.”

— Peter Theil

The individual investor has been taught at every opportunity — from the first school encounter with investing (A Random Walk Down Wall St.) all the way up to his recent chat with his IA — you can’t beat the market.

Moreover, the experience of an individual investor running his own money seems to reiterate this sad fact in harsh relief. People love to point out the fact that most active fund managers can’t consistently beat the returns of the S&P500 index.

Don’t worry, you will “see all these people again on their long walk back to the middle.” (Almost Famous)

The Cornerstone of Rosenthal Capital Management Investing

Our primary goals are to help the individual investor by:

  1. preserving capital while still capturing the upside
  2. never succumbing to the tyranny of mediocrity

Both of these can be done.

Here’s the myth: “Preserving capital automatically means accepting lower returns.” It is false.

There is a secret to protecting principal while also exposing capital to significant upside growth.

The secret lies in the deployment of complex algorithms that effectively take emotion out of the investing equation and only place capital at risk when the reward potential is at its greatest.

Institutional Investors vs. The Individual Investor

Institutions have been trading on the proprietary information of algorithms for years. As usual, individual investors don’t have access to this valuable resource.

Successful complex algorithms take time, money and in-depth knowledge to develop. Once an institution sinks that kind of intellectual and physical capital into the code the secret is understandably guarded with vigor.

At Rosenthal Capital Management we have taken our decades of experience and invested our own capital and time to create complex computer algorithms that, beginning in 2017, we will be sharing with our friends and partners. Finally, individual investor portfolios will be able to trade on the same compelling information institutions have been feasting on for over decade.

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The Rosenthal Capital Management blog explores how algorithmic trading strategies help individual investors get better returns.

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