Last Updated on 14 October, 2021 by Samuelsson
Gil Blake is an American investor and fund manager. He was born on July 14, 1945, in New York. He graduated from Cornell University and served three years as a naval officer on a nuclear submarine. He subsequently attended the Wharton Business School and graduated with the highest honors. Following business school, he worked at Price Waterhouse as an accountant for three years and nine years at Fab-field Optical as its Chief Financial Officer.
During all this time, he hadn’t thought about trading or even getting involved. Although he generally believed in the truth of the random walk theory, which he had learned in school — this theory implied that the market moves randomly.
But his life experienced a significant change when he walked into his friend’s office one day and was shown some evidence of non-random market behavior that he assumed was just pure chance. He went ahead and did his own research to prove his point. Instead, his results convinced him that there was indeed concrete proof that non-random behavior in the market exists that provided unbelievable profit opportunities. Following this, Gil Blake decided to become a trader — fifteen years after graduating from college.
He developed an investment strategy known as mutual fund market timing. Mutual fund timing involved improving the yield return on a bond fund or stock by switching into a money market fund whenever unfavorable market conditions present themselves. That is, when stocks are in a bull market, he trades stocks and mutual funds, but when a bear market hits equities, he switches to trading money market funds.
However, Blake did not merely switch back and forth between a single mutual fund and a money market fund. But instead, he chose which sector in a group of sector funds provided the best opportunity on a given day.
“I’m not a big fan of diversification. If the odds are 70 percent in your favor and you make fifty trades, it’s very difficult to have a down year.”
He used technical analysis to generate signals for the optimum Daily Investment Strategy. Blake held his trade between one and four days. By following this strategy, he had been able to show consistent monthly gains even in months that the funds he invested in registered a significant loss.
In the U.S. Trading Championship, Blake came second in 1988 and won from 1989 to 1993. His confidence was not misplaced: in the twelve years since Blake started trading, he averaged a net 45% annual return. The most remarkable thing about Blake’s performance is his consistency. He has never had a return below 20%. His worst performing year was in 1984, with a return shy of 24%. Even with that percentage, he made money all twelve months. Out of 139 months, he traded, an outstanding 134 (that’s 90%) months were either breakeven or profitable. His longest winning streak was 65 months (56 trades).
He charged his clients 25% of total annual profits. Blake also agreed to pay his client 25% of any loss and 100% of losses incurred in a new account during the first twelve months.
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