| Fund or
affiliation
Methodology
- Propreitary and
rigorous quantitative approach to measuring risk
profile of markets and tries to time the markets
by varying his combination of gross short or long
exposures.
Research Techniques
Employed
- If you can think of
a possible relationship between any economic,
fiscal, demographic, or even whimsical indicator
and the stock market, Zweig almost certainly has
run the correlation. He builds up a large
database of these indicators which tells him how
much of risk there is in the market at any given
time.
- The indicators that
test best get the most weight in his models. Part
of the process is to keep up with the changes in
economy and markets and come up with better
measurements.
- He uses monetary
aggregates like prime rates, and sentiment/
market related indicators like mutual fund cash
level, ads in Barron’s, and bear indicators
like market P/E or yield curve.
Trading/ Valuation
Techniques Employed
- Aims to focus on how
much he can lose at any time. Not how much he can
make. "If you can protect your capital in
bear markets you don’t have to be a hero in
bull markets. You just have to be there."
- Zweig is not trying
to call tops and bottoms. He’s trying to get
with the trends, and cut losses short.
- He always have
shorts (from 10-30%) in the private partnership.
Even their mutual funds frequently short stock
index future to hedge. This way, they don't have
to sell the stocks.
- If you’re stock
picker and get 60% right, you’re good. You
can even be less than 50% accurate and still beat
the market as long as you eliminate the losses
quickly and let the good ones ride.
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Philosophy
and beliefs
- Risk adverse... I
was a big poker player in college, and hated
losing... I don’t care if I win or lose. It
was the money.
- ‘The Things
which hurt Instruct’ Benjamin Franklin. Make
sure you don't make the same mistake twice.
- "I cannot hold
stocks through a bear market even in the greatest
company in the world. The pain would kill
me."
- Sometimes the market
goes mad. The only way to get an edge is to have
people go wrong.
History and other
facts
- 1961 was fresman
year at Wharton.
- Zweig is similar in
style to Ned Davis, for whom he has nothing but
praise.
- Zweig recommended
reading Reminiscences of a Stock Operator, 1923.
Point 1: There is nothing new on Wall Street.
Point 2: Don't fight the tape.
Performance Record
- 25% over 19 years:
Zweig Performance Ratings Category 1 stocks from
May 1976 to March 1995, achieved a return of
6,793%.
- Zweig achieved the
return with less volatility than the market. His
portfolio climbed 9% on Black Monday, 1987.
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