No. of Recommendations: 232
As you may know, LAPropDoc is putting together a fairly comprehensive beginner's textbook/reference guide to Mechanical Investing. I think it will be a fantastic A-Z of MI. In talking with him, it became apparent that although his report is absolutely dynamic, due to its thoroughness it lacks the ability to capture the person who has never spent time with MI. Furthermore, it is not a stand alone report as it relies heavily on surfing through the MI community to do the "end of chapter questions" as homework. There are no actual questions in the report but, for example, if you don't know how to use gritton's backtester, you'll probably want to go to his web page and test it out after reading how to do it in LAPropDoc's report.

In contrast, I am thinking about writing a completely stand alone report for those people who have no experience with Mechanical Investing whatsoever. This is intended to be a 100% prose report with very minimal tables and spreadsheets. It's for the "wives" of MI junkies and for people who are completely unfamiliar with MI but know that there is something worthwhile to look at and yet just can't seem to get hooked. The idea is that if they understand WHY it is so involving at an emotional (but still informational) level, then maybe they'll pay more attention and sit down and learn a little bit more.

Is this even a good concept? At its core, MI is fairly calculation oriented so I am not sure if I should do this type of report (one that is almost all inspirational/informational prose and almost no numbers) as it may be too hokey and/or fluffy. Is there enough worthwhile information (i.e. how to execute MI) included in this type of report?

If you think this is a great idea, you can recommend this post. If you want to send detailed comments, please E-MAIL me directly. This board is great and is the perfect place to do this type of "focus group" study.

However, it doesn't need a long extended thread about this topic or even worse, a long extended thread about the pros and cons about whether or not this topic belongs on this type of board.

Let's keep this board focused on MI.



The one paragraph summary:

The Magic of Mechanical Investing
(Ten Steps Teaching Wealth Building Science to the Completely Uninitiated)

This is NOT your average report on Finance!

If you buy this document, not only will you learn why a unique, exciting and profitable system of investing is available to the average investor and how you can create a sense of peace of mind and confidence about your involvement in the stock market, buy you will also find out about Peter Kuperman's dating history, his passion for running and his life as an Olympic Hopeful as well as how a website and style of investing changed his life.

If you were lucky enough to find this report in your local bookstore it would be filed under "The Fun and Inspirational Side of Finance" as opposed to "The Boring and Dry but Useful Side of Finance." On The Motley Fool website there is a very active, vibrant, tight-knit community that discusses a style of investing that is based completely on the empirical testing of stock selection systems over the last 32 years of history. Why are these people so excited about number crunching? What is it that keeps people up until 2:00 a.m. every night just so they can get through all 200 messages a day just to stay current?

This report was created for the completely uninitiated and is both informational and inspirational in nature. If you have ever thought Mechanical Investing was too intimidating or complex to grasp, then this report is for you!

The ROUGH draft of the Table of Contents

Introduction / About The Author

1. The Magic of Compound Interest
(Compound Interest is why high return rates are important)

2. The Magic of Probability
(MI is great because it allows us to use probabilities to become a "casino owner", not "casino customer")

3. The Magic of Backtesting
(We test how well certain patterns work over 30+ years to build "casino games" where we have an edge)

4. The Magic of the Stock Market
(The first part of the "casino game" is to stay 100% in the stock market because this is where the best returns are)

5. The Magic of Stock Screens
(The next step in creating a game that gives us an edge is to develop a completely unemotional screen)

6. The Magic of Successful Criteria
(Following successful investors (e.g. Buffett, O'Shaughnessy), we pick "rules" for our "casino games")

7. The Magic of Mind Set (Investor Psychology)
(Once you accept that a 3 month, 30% loss is okay as long as a 5 year, 400% gain is the payoff, you are ready for building wealth through MI)

8. The Magic of Understanding Reality
(More of a practical, application oriented version of #7, possibly including a very simple overview of taxes, commissions & spreads)

9. The Magic of Taking Action
(You know know why it works and why you should be excited that it works. Here is how to do it and/or where to go to figure out more)

10. The Magic of Freedom
(Having confidence in your future returns and self-assuredness about your financial future give you the freedom to do what you want to do)

Conclusion / About The Author
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.