Robert, I would like to pose a very specific question to you:
-If this method actually works, then why are these people teaching it rather than using it to get rich off of the stock market and retire?
Also:
-If this method actually works, do you know how it would affect the market in the long run as word of it spread around?
You see, Robert, I actually work on Wall Street. Specifically, I work in insurance risk management. I also have at least a passing familiarity with basic economics, including the basics of how the stock market works. As with any kind of "beat the market" tactic, there are logical reasons why, if this actually worked, the market would not exist in the form it does now.
Principally, uncertainty is a huge part of the stock market. A lot of what makes larger returns possible with stocks is the higher risk involved, as investors must be given a higher return as incentive to invest their money in businesses with a higher risk of going out of business and losing the money the investors put into them. A diversified stock portfolio will have a mix of lower risk/lower return investments to counter the higher risk/higher return ones. If played correctly, over the peaks and dips of the market, it can (but doesn't always) result in higher average returns than, say, government bonds.
What you're proposing, if it worked as advertised, would essentially remove that element of the equation. Any rational investor would only pick the stocks that would succeed, based on the magic formulas. All other stocks would, by virtue of us being able to see the future, be guaranteed to fail, so no rational investor would put money in them.
Thus, the risk is taken out of the investment, so the only thing you're left with is the idea of current money being worth more than future money, due to inflation, lost investment opportunities, etc.
Thus, stocks would end up, assuming the ability to predict the winners and losers, just like government bonds. You would earn a little bit of a return to compensate you for the lost opportunity and value of your money due to time, and nothing else.
So, even if this worked, it would only provide substantial benefits if no one knew about it except for a few insiders. Otherwise, it would fundamentally alter the market due to the negated effect of risk, which is currently a huge element of the entire financial industry.
It's a stupid idea - that you can get rich by investing only in winning stocks and make huge returns. Huge returns exist because of risk. Predicting the future negates risk. Therefore, predicting the future negates huge returns.
You might as well just invest in government bonds and save yourself the consulting fees.
Now post evidence, please.
