Consider what Charles Ellis, who helps oversee the $15-billion endowment fund at Yale University, said:
"Watch a pro football game, and it's obvious the guys on the field are far faster, stronger and more willing to bear and inflict pain than you are. Surely you would say, 'I don't want to play against those guys!'
Well, 90% of stock market volume is done by institutions, and half of that is done by the world's 50 largest investment firms, deeply committed, vastly well prepared -- the smartest sons of bitches in the world working their tails off all day long. You know what? I don't want to play against those guys either."
That's a brutal and very honest observation. The institutions Ellis refers to are mutual funds, hedge funds, and program traders -- and all of their professional staff, mathematicians, and researchers. The pros are deploying every possible tool to give them whatever edge they can get. And even they can have a hard time, as most of them will testify to the difficulty of trading in 2008.
The Core Method relies on ferreting out the information on what the best of these institutions are buying from the morass of data on their holdings.
Most of this data is gleaned from public filings. Using that data is a terrible way to invest for the future. Thats what they were doing as much as a year ago in some cases.
The Core Method identifies the most successful institutional investors currently, and then searches news, websites and other media for information on the most current holdings.
Where there is a consensus amongst the best, we can identify the security and Invest like the Best sm