I’m Troy, the author behind Bear Market (formerly MarketHistory.org). I run a hedge fund. We don’t take in outside capital because doing so will force us to focus on short term returns (at the expensive of long term returns). We focus on long term performance and ignore short term performance.
We focus on medium-long term investments in U.S. equities. All of our investments are determined via quantitative models.
I am not a perma-bear. Please excuse the name of this blog. Our model states that the current bull market in stocks still has at least 1-2 years left (most likely 2-3 years). Our fund only invests from the long side. So as a fund manager and investor, I need to watch out for bear markets. That’s why this blog is called Bear Market. Look for ideas that go against your market view. Don’t focus on ideas that confirm your market view.
I share our latest thoughts on investing, trading, and the stock market on the blog.
- We focus on the data and not baseless opinions.
- We share our hard-hitting research to help you save time.
- We ignore economic theory, which is useless. (I was an economics major.) Economic theory is based on the idea of “ceteris paribus” (all other things being equal). Ceteris paribus is not plausible in the real world.
Why am I writing this blog?
I get this question a lot. “You’re not soliciting outside money for your fund, and you’re not trying to sell a subscription service. Why are you sharing all this on the Bear Market blog?”
There are a couple of reasons.
#1: I’ve been fortunate to have random people help me and point me in the right direction throughout my life. I firmly believe “what goes around comes around”. I don’t donate to charity, so think of this as my way of giving back to the world. I think it’s better to donate to charity once I have at least $1 billion.
#2: I’m not going to see any immediate benefits from writing this blog. But I’m not a hippie either. Perhaps someday down the road, I’ll benefit somehow from this blog (directly or indirectly). Who knows. Life takes you down a lot of roads that you don’t expect. I’m accumulating karma points for the future. You have to give before you can get.
#3: Writing this blog isn’t really a hassle. For starters, my analysts do most of the research nowadays. So I’m mostly synthesizing and analyzing. I used to write these articles internally for our fund anyways. There’s no harm in sharing it with the world.
I’m not selling a subscription service
I don’t intend on being one of those “I make money by telling others how to make money” people. I make far more money from my investments than I can possible make from selling a subscription.
Running a subscription service is akin to running a business. Businesses have to deal with admin issues. I stopped accepting outside money so that I can live my life however I want. I’m young, single, and adventurous. I enjoy freedom. Running a business will pin me down to one fixed location. I prefer to travel the world. I’m in Australia now, and might go to Norway next.
*Based on what I’ve seen here in Australia, Norwegian girls are hot. 🙂
In addition, I’ve noticed that traders/investors tend to experience performance deterioration once they start selling a subscription service. Here’s a possible explanation for this phenomenon.
When you sell a service, your customers expect you to be right about the market. So when you make a wrong market call, you are forced to defend your position despite the evidence. Normally you would admit your mistakes. Subscription services force you to be stubborn. Successful investors and traders need to be flexible and admit their mistakes.
Once again, I make far more money from investing than I can ever make from selling a service. I’m not going to let a sub service get in the way of my investment performance.
I’m not afraid that someone will reverse engineer the model.
- The model’s tenets are simple. But the way you express those ideas with data is complicated.
- Even if you do manage to reverse engineer the model, kudos to you. 🙂 I don’t mind. The model is still going to work if other people use it.
- The model isn’t static. I’m sure that in 20 years, the model will be different from what it is today.
Read our guide on how to build a trading/investment model.
Many investors, traders, and market participants have no idea what they’re doing when investing. They blindly believe in dogma such as “rising interest rates cause stocks to fall” without actually doing any historical studies: have rising rates actually caused stocks to fall in the past?
When investing in equities, it is imperative that you understand the history of the stock market and global economic trends. History rhymes, and only by reading an accurate account of the past can you see causation and correlation between fundamentals and the market. Only by doing so can you build accurate investment models.
BearMarket.net/history is one of the best accounts of markets in the years past. We avoid the bullshit headlines such as “the S&P 500 fell today because of turmoil in the Middle East”. We focus on the true fundamental factors that have driven markets in the past.