First-Mover Algo Alert

First-Mover Algo Alert began as an attempt to turn an F-16 fighter pilot’s brain into a trading system. Sounds crazy. But the pilot was system creator Peter Bakker’s father, who was also a successful investor.

Unlike the fighter jets that Peter grew up around, his first attempt to map his dad’s brain didn’t take off. But it kick-started Peter’s obsession with the world of financial engineering.

The system he built for us uses the interplay of the gold/copper ratio and the fluctuating price of risk premiums of market makers to determine how you should allocate your capital.

It’s an elegant formula that not only tells you what’s really going on in the financial world, but makes trading it so simple that all you need is just two ticker symbols to use it.

You simply switch between stocks or bonds or a balance between the two, both via simple-to-trade ETFs. It sounds almost too simple!

But we’ve backtested this system across several big datasets. And while backtesting can never guarantee future performance, the results were impressive:

  • In a five-year theoretical test in the Australian stock market, it outperformed the ASX 200 by 72 times.
  • In a 13-year backtest in the US — which included both the GFC and the pandemic crash — it generated a 900% return.
  • It DID have drawdowns. But it generated 18% average annual returns and didn’t have a single losing year.
  • The most aggressive variant of it generated a hypothetical 38-fold return (3,827%) over 13 years.

Peter — who goes by the trading pseudonym ‘Chewie’ — also runs his wife’s super fund using these same underlying signals. Group Publisher James Woodburn also trades Chewie’s algorithm with his own money.

Publication overview
How often is this service published?
Text message, followed up by an email if there’s a new signal. Plus a quarterly economic health check report.
How much capital should I have to get started?
That’s totally up to you according to your risk tolerance.
What will we be recommending?
Bond and stocks via ETFs. Plus cash.
Do you put on short trades?
No.
What’s a typical holding period?
In backtesting, the average allocation switch is 37 times in a year.

Peter Bakker’s life-long career as a ‘financial engineer’ stemmed from when he tried to build an algorithm based on his F16 pilot dad’s investing brain. Since then he’s developed hundreds of algorithms to manage his family’s money. He’s a serial entrepreneur, with high-tech experience working at Google, Mydeco, and Sensis.

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