BSH Capital is a project in making asset ownership and management more accessible to people at all levels of wealth via the medium of the stock market. We lead by example through active fund management, while relaying absolutely transparent methods and first-principles explanations to investors about what we’re doing. There are no management fees, only pure performance, replicable by anyone who is interested.
It’s self-funded and bootstrapped by its founder with a long-term vision to grow into a world-scale asset collaboration platform that will help to redistribute stock ownership and decentralize the control of the market’s assets.
Transparent methodology
Contrarian in the short-term, consensus in the long-term
In the modern day of near-instant transfer of information and fastness as a necessity, the reptile-brain of people is primed for reactivity without analysis and shorter-term rewards. The nonhuman trading algorithms are built to capitalize on increasingly shorter time gaps in information transfer, with increasingly shorter options expirations. As the world becomes faster, zooming out becomes more of an edge. Capitalizing on reactivity in the short-term, while in the long-term, doing what everyone knows will eventually happen, takes advantage of time-perception gap between the levels of the human brain, from reptile to neocortex – but in short, it’s a straightforward application of “buy low, sell high”. Selling pieces to maintain a larger stake is the core concept.
How?
Position-management is separated into two pieces – the longer-term consensus view is the core position, and the short-term is the volatility management that allows the core position a higher probability of working.
Short-term: managed by applying the concept of mean-reversion to lock in profits in short-term exaggerated price-movements before they recalibrate. This is a safety feature that creates capacity to handle volatility in the core position. It’s risk management.
Taking a look at recent Nov 2024 example, MARA, on the daily short, the short-term volatility is extremely high. The price moving well above its moving averages is a signal to manage the risk of an over-bought reversal by locking in profits to increase the ability to the longer-term position without suffering through massive drawdowns and uncertainty in volatile times.
Long-term: capturing medium-to-large-scale cyclical market recovery areas, by finding established, historically high-performing stocks that have temporarily fallen out of favor due to standard cyclical nature. Once identified, the entry trigger is the combination of economic recovery and compression of price volatility to validate the former. Identifying these stocks is a very straightforward approach; look at past price-performance, and, unless there’s a glaring fundamental change in the company or environment, bet that stock price is likely to the perform same way again in the next cycle.
In the MARA example, the monthly chart of the longer-term trend paints a much different picture, in which volatility is compressing, preparing for a longer-term uptrend in an emerging and expanding industry of cryptocurrency.
Identification, search, and filter:
Scans:
•Average daily trading volume is greater than $25mm
•The average daily range over the last 200 days is greater than 4%
•Price is greater than its 200-day moving average
Sorting (prioritization):
•The lowest share floats (low supply, for when demand kicks in again)
•The largest 3-year percentage price gains (historical price performance)
Charts:
•Price compression and reversals – look for months in which price range is very small relative to other months and where a potential change of a long-term trend, did not happen; it reversed back into the longer-term trend – this catches opposing positions offsides.
•Start with monthly, then move to weekly, then to daily – zoom in only when selection has been tightened.
Positioning:
•Utilize CMR Charts (**courtesy and credit to Dan Shapiro**), to identify risk reward by seeing the size of opposing positions that would need unwind if the trade moves in the favored direction.
Relevance:
•Is the industry or company emerging, differentiated, or dominant in its market?
TC2000 Layout: https://www.tc2000.com/~brfNGH
