We Figured It Out

While the vast majority of managers are still trying to figure out a path to beating the market (using your money), we’ve solved the puzzle. After analyzing thousands of high return investments over the last 15 years- we figured it out! We discovered a pattern that is highly predictive of strong returns within a relatively short period of time.

By leveraging this unique insight, we’ve crafted a multidisciplinary investment strategy that has been validated in the market. Our proof is simple- the strategy has identified dozens of investments that have generated an average return of 85% in 2017 and 37% in 2018. This is a stark contrast to the S&P 500 return of 18.7% in 2017 and -6.6% in 2018.

We are launching Pragmatic Capital to partner with investors who want more than the status quo. Our objective is simple- we aim to significantly multiply investors’ capital much more rapidly than traditional managers ever could.

While you likely will not see this in a financial news headline, and definitely will not hear it from the vast majority of asset managers, there are literally thousands of investments that materially beat the market every year! Despite this plethora of great investments, the average hedge fund is still unable to generate returns higher than the market- even though the average manager has years of “experience.”

Percentage of Investments that Materially Outperform the Market

Shows Percentage of Stocks with Returns that are at least 10 Percentage Points Away from S&P 500 Return
 

Return from $1mm Investment

Compares Growth of Investment in the Average Hedge Fund with that of an Investment in the S&P 500
 

Given the plethora of high return investments in the market, there are two pressing questions:

Why are most asset managers unable to find these market beating investments?

Is there a pattern that can help identify these market beating investments?

While we could write a dissertation to answer these questions, the short answers are:

Most asset managers are unable to find these market beating investments because they actually are not looking for them!

Yes, there is a pattern that can be used to consistently identify high return investments!

Hindsight is 20/20 but Who’s Looking Back?

In January 2016, our fund manager conducted a massive data analysis project using regressions to search for an observable pattern that high return investments exhibited. This project yielded tremendous insight and effectively enabled him to “go back in time” to study relationships between thousands of high return investments over a 15 year period.

POWERFUL REGRESSION ANALYSIS

15

Sets of Annual Return Data

1,000,000+

Collective Data Points

2,500+

Stocks Analyzed

40+

Key Data Points per Stock

95%

Confidence Level


Contrary to conventional views, you do not need decades of “experience” to identify the key drivers of stock price movement. With data and rigorous quantitative analysis, you can clearly identify the key drivers of stock price movement.
— Mark A. Jones, Pragmatic Capital

Investing the time and energy to study thousands of high return investments proved to be extremely insightful as it demystified the path to profitable stock picking. The study not only revealed that there were plenty of stocks that led to great investments, but it also revealed that a consistent pattern was present in these great investments.

We found that high performing investments were very often stocks in which the the market had excessively positive/negative views that were ultimately proven wrong. Upon making this discovery, our fund manager created an investment strategy designed to identify such stocks and bet against the market.