Warren Buffet claims that the average investor can’t beat the S&P.

In another statement he claims if he had less than 1 million, he could make 50% per year. What he is describing here is scalability. Is Stars scalable?

Look at private equity. As the fund size increases it gets harder to find opportunities with the same high return. This is the scalability problem.

Stars uses two of the most liquid ETFs. They are usually in the top 3 most actively traded ETFs every day. By weighting they are made up of large cap stocks.

When investors start out their holdings work well enough for the SPY portion. Sell the worst 10% performers to purchase TQQQ. If you want to purchase more TQQQ sell additional worst performers.

Rebalancing occurs at year end but when starting out you can buy TQQQ anytime as much as you desire up to 40%.

After one year you rebalance if TQQQ exceeds 40% otherwise there is no need. You can let the TQQQ position continue to grow.

In future years rebalancing involves only on average 12% turnover. Even though everyone is rebalancing at year end, the exact day is not that important. During the year there is no pressure on the market because Stars is a buy and hold strategy.

I can see no limits to the scalability of the Stars model.