Yes, I get this question ALL THE TIME!
And if you are showing model price work to your friends you are probably getting this question asked of you.
I guess people have a right to be skeptical. Nothing this new has come along in finance in a generation. (I’m thinking about Modigliani-Miller theorem that Model Price work totally disagrees with.)
Our EBV lines are theorized and constructed from a different pool of water, metaphorically speaking. The statistical/current fundamental pool of water– what passes for fundamental analysis these days – has been pumped so much one has to wonder whether the remaining puddles of water have any value. The thinking behind these EBV lines is so original and fresh that users of model price are thinking totally different than any other participants investing and trading equities. The early adopters of model price certainly will have an advantage over laggards who resist our economic and fundamental principles. Yes, its fundamental analysis displayed in a graphical format.
And it works.
Equity prices use our EBV Lines as support and resistance. Yes, this can be unbelievable. First of all our charts look like technical analysis. Let me be clear…I hate technical analysis. Early in my career I learned every technical analysis tool ever invented to get an edge in the market. I sat beside some of the greats like Mr. Jerry Favors – Gann Specialist, Mr. Gerald Appel – founder of the MACD indicator – and Mr. Joe Ross to name a few. When I walked away from these people, I was not satisfied they discovered a competitive edge in the market and guess what, neither did they! They always had exceptions to their own rules. I sat in their offices and I saw how they traded and lived. Believe me they didn’t live on estates and cruised on their yachts. They all could barely afford a car!
And people tell me the reading of the MACD indicator from their canned software program tells them to buy a specific equity. Really! The man himself who invented the tool barely made a living and you think this tool will make money for yourself in the equity markets over the long haul.
Apple Hits a Brick Wall at EBV+5
The latest example of our EBV lines working is the trading of Apple over the last few weeks.
Here is our Model Price chart of Apple
Apple Inc. with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
For those interested, a daily updated chart of AAPL subsequent to this post will be maintained on Facebook, here.
I know for myself this is an amazing sight to see and by the way I have been seeing this phenomena for well over 15 years. Our calculated EBV+5 becomes a brick wall for Apple’s stock price.
How is this possible?
The mathematical constants that make up these lines come from nature and model price theory – our theory of solvency of a corporate structure. Where these constants come from is really not important if they work, wouldn’t you agree? Certainly in this recent case of Apple, anecdotal evidence is surely given on whether these mathematical constants are relevant.
Looking for an edge in the equity markets?
In my early career in the financial business I was constantly looking for an edge, an edge that few traders or investors would ever know or see. When I saw the original math and theory of model price I knew I stumbled upon something special. Back 20 years ago the work and theory wasn’t perfect and the computers at the time needed 15 hours or so to crank through the numbers. Over time we have nurtured and expanded model price theory to include additional concepts and our model price calculation itself.
What is the payoff?
For me it’s about predicting high probability future events through stocks prices. I blogged and commented many times that Apple would not have a positive transit of EBV+5 and that Apple’s stock would hit a brick wall. I believe this was obvious to any user of Model Price even with beginner experience using our calculated model price charts. My prediction was a high probability outcome and you can see what happened in our above model price chart.
What other security analysis could have done this? None that I know of and believe me I searched high and low for any and all analysis that could give me this edge.
Through the power of Facebook, you can use this edge to your own advantage. My only condition for making this work available to the general public is for you to pass it on to others who are interested.
I believe with a dedicated group looking for investment opportunities through the spectrum of model price, investment ideas will be plentiful and profitable for everyone using model price work.
Don’t you agree?