Originally Posted by 6bmike
|
. . . some instructors that have received their certification, or so it seems to me- there has been some many of late posting on other sites, that don't fully agree with everything Mr. Kelley taught or researched.
I'm not looking for cookie cutter robot/"stepford-man" types- some have learned systems from other instructors and were just increasing their knowlegde- and thats cool. Thinking out of the box is important, but you still need the box. I think that if you decide that you are an AI and not an instructor that studied tgm that you teach your students real TGM. I think they expect it.
The excuse that all varibles are covered in the book is a weak argument.
|
In October 1990, stocks emerged from their months-long bear market decline. I was 44 years old -- an entrepreneur with my own money management firm -- with a fierce desire to do the very best for my clients.
In the few years prior, I had been structuring fee-only, no-load mutual fund portfolios (long before Schwab's One Source, et. al., came on stream). We had performed, but had also suffered declines during the Crash of 1987 -- even with a 66 percent cash position. I wanted no part of that in the future.
So, over a period of several years, I mastered (more or less; remember, the market quickly humbles its 'masters') a particular system based on individual stock and stock market fundamentals and patterns. During that time, I traveled from New York to California and met with the greatest living stock market brains of our time, including
Sir John Templeton and
Phil Fisher.
Sifting ideas, I sought out one of the great market operators of our time and trained under his tutelage for more than 50 hours over a period of two years. I transitioned my clients to his approach, and over a period of years, we enjoyed extra-market returns. In short, their collective accounts grew by millions of dollars.
By the early 1990s, I was in a position to purchase institutional research, an advantage usually reserved, because of its cost, to the larger 'buy side' organizations. Given my prior hard-nosed training, I had little time or respect for most of that research product (even that of my own internationally respected clearing firm). But, for the particular organization of my mentor, I was willing to pay. And pay big.
Remember, my only objective was identifying those
few stocks -- I didn't need many -- most capable of enriching my clients' portfolios. Like everybody else, I wanted the few
right stocks at the
right time and that was that. So, I saddled up along side the 'big boys' -- the mutual funds and pension plans and charitable foundations -- and I paid up. Including ancillary services, my research fees ran roughly $10,000 . . . per
month.
Month after month.
Over a period of several years, including my other direct connect research and platform trading charges, I paid about a half million dollars.
But whose counting?
The Internet was then in its infancy, and much of what is now considered 'plain vanilla' was then unknown. In that environment, I used my weekly hard copy stock books (which included substantial fundamental analysis) to select my trades. After the
Friday close, I received these books by Federal Express by 10 a.m. the next day --
Saturday -- the same day and the same time as the big-time managers at Fidelity, Vanguard and whoever else received it. These were the 'idea books' they would use in their
Monday meetings.
We all knew the leaders. And the laggards. And, come Monday, we would act on that knowledge.
The difference was I didn't have to buy (or sell) 200 stocks: I only needed five or ten.
And I didn't play golf on the weekend.
Once picked, I used my real-time stock trading screens to execute those few trades as best I could. The leaders were in demand, and I had to be careful to avoid overpaying through careless buys. The laggards were not to be trifled with: Their only strength would come on one-time 'below market' buy orders and short-covering that would dissipate quickly. Boot'em out on any strength. If there was no strength, boot'em anyway.
The good news was that, given my individual portfolios, I didn't have to buy (or sell) stocks in multi-million share size. So, as the big funds would scale-in to their ideas, I would
buy big. As they would scale-out, I would
sell big. My holding periods were usually measured in months, not years. With a glitch or two along the way, this system worked. It was far from easy -- and it was very expensive -- but it worked.
Early into my $75,000+ per year contract with the research firm in question, my young relationship manager began to bring me idea after idea that, while making perfect sense, were a total violation of all I had learned --
personally -- from my mentor. Despite their logic, I questioned these ideas -- his 'own' ideas -- and asked him why he was bringing them to me, when the
process suggested something far different.
Soon thereafter, I made it my business to visit the floor of the New York Stock Exchange and seek out the Head Trader for that firm's proprietary account, an account then worth in excess of $100 million (and now several times that). I learned a lot that day, mostly by watching turnover in the millions of dollars. These trades were indeed made in conformance with the principles I had been taught, and which, to this point -- even on my own unassisted efforts -- had been so profitable.
I made brief mention to the trader of the disparity in what I saw happening for the firm's own account and what was being suggested to me on the institutional side, and, well . . .
Let's just say things changed.
In my nascent golf career, born of a lifetime of study and practice, I teach the principles of
Homer Kelley -- my
personal mentor -- and his book,
The Golfing Machine.
These principles 'work' for me and my students, both amateur and professional (teaching and touring). They always
have worked. And I have no doubt they always
will work.
Let others wail at the wall of our success . . .
And spin their own derivatives.
In this day, the miracles of modern technology are just now proving the ideas Mr. Kelley professed so long ago. And it is those ideas that the world's greatest teachers are now integrating into their teaching (with or without knowledge of their origin).
These are the principles I teach.
These are the principles of
The Golfing Machine. 
Hybrid Mode
