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ABOUT ME
Want to know more?
Wall Street Scientist was made to help individual investors perform better in the markets. Investing is complex and requires a general base of knowledge. This FAQ rundown is designed to help both novice and advanced investors use our portfolio service to the fullest capacity.
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As always, if you have further questions, please contact us. We wish everyone life-changing success from their investing.
- Wall Street Scientist Team
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Why Why Why?
Probably the most frequent question: if you have the keys to making money on Wall Street, why share them across a subscriber platform?​
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For many years Wall Street titans put individual retail investors at a sincere disadvantage. Access to news, data, strategy, plus unbelievably high commissions kept most profitable investing to a tightly held circle of large banks and highly specialized firms with nearly unlimited capital. Individual investors (also called 'dumb money') by the floor crowd (vs 'smart paper') and were generally regarded as targets for every scheme and product that could be pushed out through the wirehouse and retail advisor networks.
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This is changing and we want to be part of the change, but we also see a business opportunity. We've spent years researching and investing in our own strategies to make money in the markets. When an investment manager has a strategy that is ready to scale larger they are faced with two options: 1) Start a fund and hope you can raise significant capital, or 2) Sell your data, insight, strategy (all part of what's generally called an edge, or alpha) to someone else who has capital and wants to deploy this strategy in their fund or private investment account.
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We feel the fund industry overall crested sometime around 2011. Old funds have become entrenched and defensive (hence reduced returns), fee compression is making it difficult for new funds to afford the ever more expensive regulatory environment, and the democratization of investment tools and data means the overall value proposition to investors is becoming less each day. Simply said, we don't believe the ivory tower of private hedge funds is the future - the future is you - smart, active, engaged, self-directed investors who want to save thousands in manger fees while charting their own success in the markets. We believe we can give investors better than hedge fund returns - with complete transparency - all while keeping thousands of dollars in their account every year. This is our big 'why' and we hope you join us!
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So, how does Wall Street Scientist work for investors?
We specialize in the one thing someone new to the markets may find difficult: strategy.
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There are two paths independent investors can take to managing their own money.
The first path is to learn to become a 'trader'. We know from industry statistics that people will generally have less than 10% percent success rate, and generally abandon these prospects before they are able to become profitable. This also can come at a huge cost of time, emotional stress, and personal learning commitment. The biggest detraction from this path isn't the work, stress, or potential losses - it's time. Many investors take YEARS to become proficient in the markets to a degree that they can responsibly administrate their own portfolio - and that's assuming a fast learning curve. Investors instead could be using this time to capture investment returns from day one.
The second path is to source professional strategy and advice. This is the path we promote at Wall Street Scientist and why our company was born. Many professional traders and large hedge fund managers source research, data, strategy, and expertise from a whole network of sources. At an institutional level, it can be hugely expensive - such as unique data feeds that cost 250K a year. This is not really a reasonable process for most individual investors. Wall Street Scientist is designed specifically for individual investors in its model, trade requirements, and price.
One thing we realize is that most investors are unable or otherwise don't want to be traders stuck at their screens all day. We designed a path for everyday investors to achieve their financial goals with just a few minutes a week.
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Here's the process:
1) We run our strategy research 24/7 using the latest data science, AI, and fundamental investment techniques. From this, we produce a long-only (just buying stocks, no shorting) portfolio designed to keep investors allocated to stocks showing the most promising upward growth.
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2) Every Monday, before the market opens, you will receive an email detailing current portfolio holdings. This is generally 8-15 stocks. Stocks that continue to meet our investment criteria remain in the portfolio. Stocks that fail to meet our criteria are sold from the portfolio. We give details instructions including which stocks to buy and which to sell from the portfolio. We guide you through the entire process.
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3) We try to hold stocks as long as possible so the investors benefit from long term averages. When we do need to rotate stocks in and out of the portfolio, simply place trade instructions to your investment account with your preferred broker or manager. Then you're free to go about your week.
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4) Enjoy knowing you've got a solid strategy and someone watching the markets - at a much more cost-effective rate than an expensive financial advisor.
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Bottom Line:
We do all the research, strategy development, and market monitoring. All you have to do is place the trades.
How do I know your strategies will work in the market?
In the land of statistical research, there's good research and then there's bad research. Bad research generally comes about when someone is hoping for a particular conclusion (profits in our case) and they somehow consciously or subconsciously manipulate the data or the process to give them what they want. It's the famous quote: "torture statistics enough and they will tell you anything you want".
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Quality research is the prominent feature of our product, and so we always want to protect our investors and our results from any 'bad science'. We do this in two ways:
1) Keep to fundamental rules. This means simple models such as supply/demand, momentum, arbitrage, rebalancing. Stuff everyone knows about, and stuff that has been written about since the beginning of the stock market. There's no debating that markets do 'tend to trend', or that momentum is a universally found feature of markets. You don't even have to take our word for it - momentum is used by the biggest hedge fund in the world, AQR. You can read their research paper here.
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2) Then we actively restrict ourselves to only using transparent scientific processes. Many funds and investment strategists are curious enough to use 'black box', 'gray box', or otherwise highly complex AI and machine learning processes (think Neural Nets or Deep Learning Networks).
There are cases these can be useful, such as high-frequency trading, but our investors are trading once a week, and so this type of technology would be the wrong tool for the job. The other problem with AI is that it's very difficult to see inside the logic. With billions of logic nodes, the truth is that even talented data scientists have no idea how some deep logic programs make or lose money. Try explaining to the police officer what your self-driving car was thinking after it crashed. We don't want to do postmortems. The best way to avoid this is to not crash in the first place.
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Combined these two ideas and apply the best fundamental ideas to test, test, and test some more. There's no way to create a scientific model for a single event such as COVID19 - because COVID and its effects on the global economy have never happened in the modern market. When necessary we take an aggressive 'risk-off' stance to protect the portfolio and then publish these instructions to our investors. Our portfolio in our view is the very best of investment science, investment experience, and simply good wisdom because our experienced traders holistically consider the whole of the market - stand back, does this make sense? Our process is sound, and is why we have a high degree of confidence in our work.
Which broker is best? Can you reccomend one?
While recommending and introducing new accounts to brokers can generate a highly lucrative commission, we don’t participate in any formal recommendation process because we feel it would harm our future ability to always act in the best interest of our clients.
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We do like brokers that don’t participate in selling client order flow, but these are few. Our general idea is to use the broker who gives you the best rates, the most intuitive user interface, and who has the best internal risk controls. Most household-name online brokers will do the job. More and more, Wall Street Scientist strategies are able to be traded on mobile applications, so you may want to consider convenience or the availability of apps as an aspect of broker selection.
How often will I receive an email?
Every Monday before the market opens. Occasionally we will also share internal private research we find interesting with clients. We don't want to overload your inbox, so we keep this minimal.
What time does the email arrive?
In consideration of our West Coast (PST) clients, signal emails are generally distributed by 10:00 PM the evening prior to the market day. This way California residents aren’t scrambling to get their orders in before the 6:30 AM Pacific Standard Time market open.
Occasionally our computers are busy crunching numbers or some unusual activity happens in the market and we feel additional commentary will benefit clients. In this case, emails may be delayed for several hours.
If for any reason a technical interruption occurs, we will immediately notify all subscribers.
Is Wall Street Scientist a Financial Advisor?
Our team loves teaching and mentoring, but unfortunately giving individuals personalized financial advice requires official registration as a Financial Advisor in most jurisdictions. And since we think the advisory industry is shrinking, and also because we market our portfolio service to a broad international audience, it would be impossible to register everywhere we offer our services. And just to be clear here’s some legal: We are not financial advisors and do not office personalized financial advice. Please consult a financial advisor before making any financial decision. For our full legal and terms of service, please click here.
What keeps Wall Street Scientist from front running investors?
One of the old games investment advisors and strategists would play is to first buy a stock for their account, and then send out advice for everyone they know to also buy the stock - hoping the flurry of additional buyers would then push up the stock price to new highs - classical front running.
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Clearly, this has ethical problems - not to mention in some cases legal/criminal ramifications if there is a concerted effort to fraud investors or otherwise create unnatural stock prices that can harm an unsuspecting public investor.
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So what's the best way to keep this from happening? Here's how: only run trade signals on highly liquid stocks, ETFs, ETNs, and the most heavily traded products available. For example, Apple Computer stock (ticker AAPL) currently has a market cap of $1.98 trillion dollars. (Yes that's right, TRILLION). This is important because even if all of our subscribers went out tomorrow and bought $500,000 of AAPL stock at the same price in the market, liquidity providers would eat this order flow so quickly that it probably wouldn't move the stock a nickel. It's almost impossible to 'pump' this stock so it can be 'dumped' on you later. Want to trade SPY or /ES index futures? You can have almost unlimited liquidity. We've witnessed billion-dollar trades find liquidity in the S&P500 index products - so unless you're Warren Buffett (we know you're reading), our clients can put this concern to bed.
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Also important, we publish our signals after Friday's close and before the market opens on Monday. Thankfully the market opens the same time for everyone, so nobody gets an early shot a trade.
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Even more important: our service is not about quick in-&-out trades. It's much more akin to traditional 'buy-and-hold' investing, just simply a matter of holding the right stocks and products.
Wall Street Scientist also promotes a word of caution regarding any strategy or signal service promoting trades in small-cap, micro-cap, pink sheet, OTC, or otherwise low liquidity investment products. To our investors: never trade anything through a retail broker unless your order is a small fraction of 1% of the day's liquidity. If you have concerns about liquidity, please discuss this with your broker, chances are they have a high-touch execution service to help you navigate the markets safely.
We do this to protect our clients - markets work both ways. We want you to find good liquidity when you're buying AND when your selling. We also want you to have a high degree of confidence in the work we do for you and your ability to win in the market. Keeping to a selection of highly liquid underlying assets is a prime objective and it's good for everyone.
As always, if it's too good to be true, it most certainly is.
Can I Trade Options with Wall Street Scientist?
Options are a derivative of a stock or investment product. A listed options contract is basically a synthetic for stock shares, long or short. Options are also complex and require substantial experience to be administrated correctly. If you feel that you have a sufficient understanding of the option products to replicate share ownership in your portfolio, then it's possible that one could devise a way to take advantage of our portfolio service to argument an option-based strategy. Please read and be aware of all OCC disclosures prior to trading any options.
How much time the Wall Street Scientist strategy take?
We've specifically built a product for less than 15 minutes a week. Most investors probably take more than this at the beginning as they learn their brokerage software and interface. Depending on how long you've been investing, the trade orders can probably be entered in 3 minutes or less. We've even placed orders through our mobile devices.
What is the General Investment Philosophy of Wall Street Scientist Investment Strategy?
We use trends, momentum, and risk analysis to concentrate a portfolio to the stocks showing the most upside momentum. Then when the market turns bearish we start to reduce and eventually flatten the portfolio to bonds, gold, short market, and other ETF products.
A quick history: During the last half of the 1900s, competitive forces and new technology reduced transaction-based commission fees to new lows and forced the stockbroker industry to switch from peddling single name stocks to an advisory fee model.
The ability to charge people 1-1.5% a year on their whole retirement account and to have this drawn from their accounts pre-tax was extremely profitable. The industry exploded and made a lot of advisors huge incomes. The value was so imbalanced that it spurred famous books with titles such as "Where Are the Customer's Yachts"
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What's really happening now: The truth is the traditional financial advisory business is slowing dying. Paying some advisor 1% each year to quarterly 'rebalance' your account while a portfolio 'analyst' spends less than an hour looking over your account before an annual meeting leaves many investors demanding more value.
Can I cancel my subscription?
Yes. You're free to cancel your subscription at any time. All new clients are offered an automatic 30 Day money-back no-questions-asked guarantee. If for any reason you are not finding value with our service, we want you to feel you made a good choice by trying. Subscriptions can be canceled at any time, after 30 days, all subscriptions will be discontinued upon their next renewal date.