History of Weekly Stocktip
History of Weekly Stocktip
Weekly Stocktip was founded in Denmark.
The idea of an algorithmic approach to value investing started in early 2003.
In late 2003 the founder of our parent company started development on the algorithms that today power Weekly Stocktip.
The first thing we researched and built was an unbiased backtesting methodology.
We decided to use the scientific method for any strategies we consider adding.
Every idea, has to have a timeless sound hypothesis. An educated guess as to why it should work. A overly simplified example of this would be that investing in companies that are profitable and has little debt will be more successful than investing in companies that aren't making a profit and has a lot of debt.
After such a hypothesis is made, it is then tested in a double-blind test:
On several subsets of the full amount of companies that it "could" have invested in.
On 100s of different time periods
Without the biggest winning outliers.
If it passes the blind tests with at least an 80% predictability score. We analyze the data in detail (every single trade) and if everything checks out, it's put to use in a test account with real capital with no other strategy involved to catch potential issues with slippage and volume.
Read more about our approach in our 2008 white paper
late 2008 (finished)
We finished development of the algorithms, including both micro and macro-cap evaluation strategies.
The macro-cap strategy, despite already being in the middle of the financial crisis, still marked the overall stock market as over-valued. We wanted to try to somewhat time our launch to be at the bottom of the crash, as our strategy isn't immune to drawdowns in crashes.
We spent the rest of 2008 polishing, writing our white paper, and preparing the product for it's official beta test.
We officially launched our pilot test period in 2009 when signs towards a bull market were looking very positive. (we ended up being 1 month off the bottom)
This involved the founders' own capital as well as a few other individual investors who got early access.
The results of the pilot test were as follows:
*Pilot test results verified by 3rd party auditor PwC. (audits are in DKK)
After 3 years of end-to-end testing, and 6 years of development, we marked the strategy a success and got other investors on board for private money-management.
Started development of a fund model that could handle higher AUMs
2014 (Signal service)
Mark Lyck joined the company to create Formula Stocks using the strategies developed by the founder.
Formula Stocks offer 4 products that use
Entry: $50/m (built to be a better alternative to an index fund)
Premium $100/m (built to be a medium between Entry and hedge funds)
Business $20k/y (built for high returns for medium-sized individual accounts. Cannot handle large capital)
Fund $140k/y (built to compete with the top hedge funds, can handle very high AuM Capital)
2015 (first negative year)
2015 marks the first year that our strategy lost more money than it made. Our portfolio value dropped by around -12%, and Formula Stocks was off to a rocky start, and we moved our focus back to the private money management sector, where our longterm investors had experienced the positive results in the last 6 years vastly outweighing a minor loss in 2015.
10 years since our original launch and the strategy performed even better than we estimated with an annual CAGR of around +42%. Our strategy had managed an astonishing return of +1,000% for our business model.
But the stock market was getting awfully over-valued again, making it much harder for the system to find great value investments.
Private money management had been the core of the strategy since 2009, and we needed a better way to scale it rather than individual syndicate deals, and started looking into the possibility of starting a hedgefund in the USA.
Having first-hand experience with how difficult it is to convince investors to come onboard. We knew it would be even more difficult in another country, and our 10-year track record based in DKK (danish currency) would be virtually useless for American investors. In light of this, we decided to revive the idea of a signal service to start getting a reputation in the US and build a more publicly verifiable track-record based in USD.
We gathered all of feedback from Formula Stocks which we still keep running for the few investors that have been using it actively for years. The biggest pain-point was how difficult it was to use and how it required a certain amount of capital to match our portfolios.
We didn't want to dumb down Formula Stocks. So we ended up creating Weekly Stocktip based on all the constructive feedback we got from our first signal service. To create a signal service that could be used by anyone. Since the main goal this time around was to build a reputation, we decided to use our business plan from Formula Stocks.
Weekly Stocktip was launched in 2019.
In 2019 the stock market was getting very over-valued again. As Benjamin Graham said "Abnormally good or abnormally bad conditions do not last forever." By 2020 we had developed a new hedging strategy that would allocate capital to quality mining stocks when the mining sector as a general was significantly undervalued.
In April 2020, we got hit with a "mini-crash" due to the new pandemic. As expected the Weekly Stocktip portfolio dropped in value. This was a blessing, as it opened up much better value investing opportunities again, and many of the mining stocks that was recommended with the new hedging strategy started to take shape and helped our strategy to recover faster than it usually would.
Our portfolio fully recovered from the crash in April in just 2 months, and back at all-time highs.
Updated on: 25/07/2020