I have been asked why I was the one to find Stars. I asked them how many people would build a model only needing prices once a year. Their answer was no one. As many have said less is more. Quants have never learned this. 85% percent of investors can’t beat buy and hold the S&P. That strategy needs no prices. The S&P has a beta of one and an alpha of zero. So much for modern portfolio theory and risk adjusted returns.

The need for prices once a year is to rebalance so the concentration of TQQQ doesn’t get too high which cases excessive drawdown. Rebalancing comes near year end because of market structure. 75% of the time is an up year with the high usually near year end. Of the 25% of the time that prices are down for the year, 50% of the lows occur near year end. Rebalancing occurs near year end because that is where highs and lows occur.

Truth about investing lies in simple concepts just like in other scientific areas. It does not lie in quantitative algorithms that most investors don’t understand. The truth shows up in performance results. The truth is you can earn twice the S&P. The key is you have to have volatility. Rebalancing prevents that volatility from causing excessive drawdown.