A finance professional refines and promotes his strategy for maximizing investment gains by understanding stock market trends through a long-term view.
In this new edition of his book originally published in 2003, portfolio manager Tuttle presents the latest version of his stock-picking strategy. The strategy demands an understanding of the business cycle over years and decades, rather than the shorter horizons most analysts rely on, and sees smaller cyclical ups and downs as components of larger, secular trends. The theory accounts for nine secular phases from 1906 to the present, with detailed looks at the ups and downs of each trend. Tuttle challenges the accepted theories of asset allocation, including the efficient markets theory and the capital asset pricing model. Fusion analysis, including a ratio called Tobin Q, drives Tuttle’s theory, which argues that both risk and return are cyclical instead of linear and returns can be maximized by understanding the progression of the cycle. Tuttle acknowledges that his theory is outside mainstream investment thought, but he notes that it has gained adherents: It is now “considered thought-leading radical work in the financial arena [and] is used by countless management firms as their basis behind risk correlation in relation to market cycle comprehension.” Dozens of color charts throughout the book help illustrate aspects of the theory and of the long-term trends Tuttle describes. Elsewhere, the book is hampered by occasional awkward sentences: “It seems as if the definition placates the defining of a person’s or firm’s time objective”; “Considering in the year 2000 the U.S. poverty population accounted for 15% and children under seventeen accounted for more than 20%, this equates to only 15% of the working class not invested in the stock market.” In the end, though, the theory isn’t an approach to choosing individual stocks to buy or sell but rather a new way of looking at the market and the economy as a whole.
An alternative approach to investment management, explained in detail.