How To Beat Warren Buffett Working Just 40 Days A Year

Want to beat Warren Buffett’s investment returns? Don’t want to spend a lot of time working at it? Bloomberg’s macro strategist Cameron Crise has just the investment process for you…
Last week I wrote about a simple model that is surprisingly effective at profiting from the rebalancing tendencies of passive investors. This in turn brought to mind another well-known instance of behavioral herding that has led to consistent profits — the so-called ‘pre-FOMC drift,’ wherein U. S. equities tend to rally just before and just after FOMC meetings.
What would happen if we combined the rebalancing model with a strategy designed to profit from the pre-FOMC drift? I assessed the performance of going long the S&P 500 on the close two days before each FOMC meeting and exiting the trade on the close of each FOMC day. In measuring the historical performance of such a model, it’s important that we don’t include any forward-looking information. Some of the best daily S&P 500 returns have come on days featuring intra-meeting easings. Alas, we have to exclude them from our study given our inability to pre-position for them.

This post was published at Zero Hedge on Mar 27, 2017.