As nearly all investors have learned over the last 12 months, these rallies rarely last forever.
That has fostered some debate among Wall Street pundits who say to throw out those 2 percent gains, and “go into overdrive” because the rally continues on fundamentals alone.
But others say the rally has reached a high-water mark. With only a small number of fundamentally strong companies accounting for much of the climb in the index, it could be time to review the possibilities: buying stocks on any dips and checking out the fresh ideas from Omicron, a now-public company that makes software used in money-transfer transactions, and collects algorithms for securities trading.
Omicron’s method has been publicly contested, and it includes a five-step approval process to get onto its platform.
Zachary Evans, president of Toronto-based Investment Portfolio Management and a founder of Omicron, is at the heart of the controversy, as a founder of Chaurus Asset Management Inc., which sought to copy the model. The Vancouver edition of The Motley Fool bought into Chaurus as early as April 2015.
Evans is fighting the validation order issued by Canada’s Competition Bureau, which sued Omicron in 2017. The company released its lawsuit in October 2018 and the CEO refused to answer Reuters’ questions about the matter. The company did not respond to a request for a phone interview.
Chaurus’ model is based on an algorithm developed by Evans, which uses Artificial Intelligence to detect trends in a variety of trading-oriented topics. The model can identify when there’s a change in an individual’s likelihood of making a trading profit, and it can also identify when someone stands out in an investment population. It can help investors identify areas of the market that are moving in a specific direction.
Kathleen Wong, a manager at TSY Advisors, has introduced the model at some of her clients and says, “They couldn’t believe it.”
“Every tool in his toolbox has proven to be an asset,” she says. She is now adopting the algorithm in her own clients’ portfolios.