July 27, 2022
In this course, Kirk Spano, founder of Bluemound Asset Management, LLC, will focus on a 4-step process that finds the right industries and stocks at the right prices. Kirk originally borrowed his approach from a pair of the most successful institutional investors in the world in the late 1990s. Since then, he has upgraded it into a step-by-step repeatable approach for all investors. Kirk's investment process has led to over two dozen "10-baggers" in his career and generates substantial income for retirees.
Having a process in a time of great change is important to minimizing risk, as well as finding the best investment opportunities for your financial goals. The first step for investors will be to "unlearn" a lot of the "wrong things" that have been narrated to them for years. If you can do that and control your emotions, you should be able to beat the market by a substantial margin cycle-over-cycle.
Several trends are leading the investment universe and will continue to do so for the next decade. At the top of the list are:
- Aging demographics which are deflationary.
- 4IR technology which encompasses a wide range of tech innovations from biotech to fintech, IoT, Cloud, AI, and more. It is disinflationary.
- The shift to cleaner energy is a response to inflation, energy security, and climate change.
- A need for greater resources which is an inflationary trend.
- Government policy steers vast sums of money into and out of various industries. We must understand the impact even when we don’t necessarily agree.
- Central banks control the money supply, i.e. liquidity and that control largely dictates cyclical trends in the economy and markets.
- Kirk’s macro analysis has appeared in MarketWatch, Seeking Alpha, and other publications due to its futurist outlook and accuracy against the random narratives of traders and those talking their own book.
- All investing is value investing. Find undervalued assets and growth today, as well as, in the forecastable intermediate-term future.
- Finding assets and growth that the stock market does not assign value to today is where the biggest gains are made.
- Analyzing what future free cash flows and balance sheet development will look like 2-4 years out is crucial to getting ahead of the market which only looks out a year.
- Large-cap stocks are highly efficient, meaning that most current and short-term forecasts are already baked into stock and industry ETF prices. Small-cap and emerging markets stocks are most inefficient which offers a lot of opportunities when volatility creates an extremely high or low price.
- Mid-cap stocks, which have led markets over full cycles this century, are where the best risk-managed returns generally are.
- Kirk focuses on quantitative analysis that looks for where the big money is interested in buying and selling.
- Kirk uses multiple money flow analysis to forecast major price moves 1 to 2 years out. He has used this method to be significantly ahead of major market moves. For example, in late 2020 and early 2021, when ARK Investments Innovation ETF (ARKK) was trading above $120/share, he forecast (to great ridicule) that ARKK would fall to between $60-80 by 2022. It has in fact fallen below $60/share.
- Kirk focuses on pivots at the edges of the market.
- Scott “Shooter” Henderson, Kirk’s technical analyst and special guest, focuses on shorter more focused time frames for making entries and exits. He also swings-trades.
- Scott’s approach uses a proprietary blend of technical analysis, Harmonics, and Elliott Wave Theory which is strong at forecasting the “madness of crowds” in the shorter-term time frames.