The Stars buy and hold strategy has drawdown 25% of the time where it underperforms the S&P by about 13 percentage points. Another 25% of the time Stars outperforms the S&P by 45 percentage points per year for 2 years in a row. These years are right after the drawdown years. The rest of the time the outperformance varies between 0 and 20 percentage points per year.

The above information is for the 20% TQQQ version of Stars that was described in the book “Earn Twice the S&P”. If you increase the % TQQQ to 40% TQQQ, the outperformance numbers double and the drawdown increases by about 10 percentage points. Since the accuracy of Stars is 100% after a couple years, there is no reason to not use the higher percentage TQQQ.

Stars relies on volatility and views drawdown as an opportunity to purchase more shares at a very discounted price. Financial firms rely on diversification and risk adjusted returns for their strategy construction. The average investor has underperformed the S&P by 5% per year for 70 years. Over the past 25 years Stars has outperformed the S&P by a factor of 17.

Over the past 16 months Stars has outperformed the average of Berkshire Hathaway, Blackrock, and Blackstone performances by 42 percentage points. If you want better performance you have to improve your investment strategy.