Getting Started with "The Investor's Compass - Powered by DynaLogic"

“It’s not about winning; it’s about not losing” “Concentration builds wealth, diversification preserves wealth”.

Welcome aboard.  We are glad to have you as a subscriber.  Your subscription is free.  At some later date, we will convert to a paid subscription, but we plan to make the subscription affordable and are confident that the value will be many times the cost. If you find “The Investor’s Compass”” useful, we’d love if you could spread the word by sharing our Posts with friends, family, and business associates.  Investing is not a race but a journey.  We believe using “The Investor’s Compass” will improve your investment journey and lead to better results. 

Why are we publishing “The Investor’s Compass””?

The year was 2001. We had just witnessed the Dot.com era where companies, with no earnings and whose business models weren’t understood by most were trading at stratospheric prices, now crashed and burned. Extraordinary wealth was wiped out. Individual investors, as well as investment managers, were on the losing side. Everybody was trying to figure out what to do. They had become emotional and were making bad decisions.  First it was greed and then fear. With all this emotion driving markets, there had to be a better way. This was the genesis of the DynaLogic platform.  Over the last 22 years, the platform has gone through multiple upgrades and what was originally only available to the investment manager community, is now available to you, the individual investor. 

Wealth is built over a lifetime and is more about “Not losing” than it is about “Winning”. One of the greatest challenges to successful investing is managing emotions.  Dan Ariely, WSJ columnist and James B. Duke Professor of psychology and behavioral economics at Duke University talks about the challenges of human emotion in his book Predictably Irrational: 

            “We usually think of ourselves as sitting in the driver’s seat, with ultimate control over the decisions we make and the direction our life takes: but alas, this perception has more to do with our desires-with how we want to view ourselves-than with reality. By the time we comprehend and digest information it is not necessarily a true reflection of reality. Instead, it is our representation of reality, and this is the input we base our decisions on.  Our behavior is influenced by emotions, relativity, social norms, etc. And while these influences exert a lot of power over our behavior, our natural tendency is to vastly underestimate or completely ignore this power.  These influences influence us not because we lack knowledge, lack practice, or are weak-minded.  Quite the contrary, they repeatedly affect experts as well as novices in systematic and predictable ways.  The resulting mistakes are simply how we go about our lives, how we do business.  They are part of us.”

Predictably Irrational

Author: Dan Ariely

James B. Duke Professor of Psychology and Behavioral Economics

Duke University’s Fuqua Business School

The Investor’s Compass’ platform was developed to help investors manage emotions by providing a logical rules-based investment framework that delivers buy signals when others are selling and sell signals when others are buying.  It’s really that simple. We built this system to help investors make smart, logic-based decisions on when to buy and sell equities to create better outcomes and avoid common pitfalls.

DynaLogic is designed to be a tool that fits into your own investment strategy. You select the equities and ETFs you want to invest in while DynaLogic provides guidance on when to enter a position, trim a position, and reinvest into positions based on price-based movement. As you will see in our content, we have numerous case studies on how this system has led to better outcomes than just buying and holding the stocks you select in many cases. Many investors look to follow the common wisdom of buying low and selling high, but emotions often make this difficult. DynaLogic takes the emotion out of investing by telling you exactly when to buy and when to sell.

How does the DynaLogic System Work?

We provide specific price targets combined with suggested execution amounts.  Buy and Sell prices are established and updated daily. The sell price is based on a mathematical calculation that examines the historical percentage change in price. Let’s give some examples that should help explain how the buy and sell signals are derived.

Let’s assume we are tracking Apple (AAPL) and the last Sell signal for AAPL was $100/share. Let’s also assume the percentage in price differential is 5%. Because DynaLogic’s sell signals are based on rising prices, then the next Sell signal will be $105 ($100 X 1.05%).  The amount of the Sell is a function of the Sell trigger number (#).  Sell signals are numbered like Sell Trigger #1 or Sell Trigger #2 and so on. Additionally, the Sell triggers are progressive in that the amount of Sell trigger #2 will be slightly larger than the amount for Sell trigger #1.  Every Sell signal has a suggested amount to sell.

Buy triggers follow a similar mathematical calculation that is based on a percentage change in price.  Let’s assume we are again tracking AAPL, the last Buy signal was $90, and the percentage differential to initiate another Buy signal is 4%. Because DynaLogic’s buy signals are based on declining prices, then the next Buy signal will be $86.40 ($90 X .96).  The amount of the Buy signal is related to the Sell trigger #.  Let’s assume the next Sell signal is trigger #2, then that means the security is coming off a major bottom, therefore the Buy signal percentage would be large.  For Sell signal #2 the Buy Signal is 95%. (The Buy trigger for Sell trigger #1 would have been 100%).  For Sell signal # 15, the Buy signal is 30% and DynaLogic is suggesting that the amount to commit would be 30% of the total allocation to AAPL. 

The platform is biased to the upside to recognize that markets move higher over time. The percentage differential in price for each Sell signal is greater than the percentage differential in price for each Buy signal.  The Buy signal differential is smaller because we want to get cash invested when there is a decline to ultimately capture more of the upside. Following the sell signals and trimming your position while a stock is rising frees up capital to reinvest when there is a Buy signal.

Additionally, the Buy and Sell signals are progressive.  Each successive Sell or Buy signal is slightly larger than the previous signal. By relating the Buy signals to the Sell trigger #, it works to prevent someone from overcommitting to a position, which often happens when emotion takes over.  If we look back at the end of 2021 and the very beginning of 2022, the market was decidedly bullish, but because many of the securities in the “The Investor’s Compass”” lineup had moved up significantly in price, Buy signals were relatively small, suggesting to only commit 20-30% of available cash.  As it turned out, investors were protected from over-committing. 

How to Use “The Investor’s Compass””

“The Investor’s Compass”” doesn’t tell you what securities to buy.  We help you manage what you already own or are thinking of buying. The daily Substack Post displays the most recent Buys and Sells with the suggested amounts to execute. We also have linked a broad list of securities to the Daily Post that we are following, which included not only individual equities, but a host of Index ETFs.  On this list are also the Next Buys and Sells with their corresponding execution price.  You can check out our posts daily to see if one or more of your securities requires action, or if available through your custodian, you can enter a Good till Cancel Limit order based on the next Buy or Sell execution price along with the number of shares you wish to Buy or Sell. When the price is reached, the limit order becomes a market order, and the trade is executed.  It really is that simple.

When you examine the list of Buys and Sells, you will notice the signals are colored.  Small Sell signals have a light red color that gets progressively darker as you reach higher and higher incremental Sells. Small Buy signals have a light green color that gets progressively darker as you reach lower and lower incremental Buys.  This follows the logic that the more something moves in one direction, the greater the probability of a correction.

On the “The Investor’s Compass” platform on Substack are numerous examples of potential trades under the title “Just do Something” which shows the power of the DynaLogic platform and results you could have seen using it. Check out our case studies here.

We sincerely hope “The Investor’s Compass” proves to be a great partner on your investment journey!

If there is an equity you would like for us to follow, leave us a comment on the Substack platform and we will see if we can add it. and please leave comments on how we can make the posts better. 

Please do us a favor and share our Posts!

(Note: DynaLogic provides to subscribers relevant and real time market movement information on a host of equity securities.  Signals (sell or buy) are based solely on mathematical changes in the price of a security.  No other methodology is used.

DynaLogic is not a registered investment advisor, and it makes no representation or recommendation concerning the purchase or sale of any security investment product; DynaLogic provides no advice or recommendation whether a subscriber should or should not act on any signal a subscriber receives, and it has no knowledge whether a subscriber, in fact, acts on a signal or any signal; DynaLogic maintains no portfolio account or other investment information on any subscriber.)

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