Depending on who you read, Larry Edelson was a stock market forecaster extraordinaire or a scam artist.
According to a Securities and Exchange Commission document from 2006, Larry Edelson, Martin Weiss, and Weiss Research were issued cease and desist letters, which cited the cherry-picking of gains in financial newsletters as misleading.
Other stock market commentators, such as Martin Armstrong of Armstrong Economics and The Forecaster movie, have described Larry as a “good friend”, good analyst and objective technician. In fact, Larry Edelson is featured in the movie The Forecaster.
Another company, MoneyandMarkets, described Larry Edelson as a “modern day nostradamus” who dedicated his life to developing stock market research tools that could better analyze markets, cycles, and patterns.
Larry Edelson certainly achieved notoriety in his life. When Martin Armstrong was asked to turn over the source code for his own models, Larry offered to keep the company running so the models would continue in spite of government pressure to halt operations.
Following his death, Larry Edelson left behind a wife and children. But that wasn’t the end of his legacy, his colleagues continued The Edelson Institute with a goal to scientifically time the markets for better results.
The Edelson Institute includes the Real Wealth Report (edited by Mike Burnick), E-Wave Trader, and Gold Mining Millionaire services. It should be noted that The Edelson Institute is owned by Weiss Research, Inc.
The idea behind the Real Wealth Report is to incorporate into stock market research the cycles that impact the economy. For example, the Kondratieff Wave, Kitchin Cycle, Juglar cycle, Kuznets Cycle, and even War Cycles are analyzed.
Whether your investment preference is for Materials, Energy & Agriculture, Income Investments, Speculative Investments, or opportunities in Asia, the Real Wealth Report is designed to surface opportunities.
Sometimes, ETFs are used and sometime long-term options, such as LEAPS, are employed for leveraged returns.
One of the final pieces of research Larry Edelson wrote advised that Europe, Japan, and the United States are all bankrupt so the first step of an investment plan should be to avoid all government debt and sovereign debt of any kind. The thesis for the risk of buying U.S. government bonds was based on total liabilities exceeding $200 trillion.
As an investor considering any company, the key thing when examining stated claims is to look for full prediction records. If a company predicts a boom or a bust at many points in time, they may eventually be right though frequently wrong. The key question for investors to identify is whether the gains from the winners outpace the losses from the losers.
According to the SEC investigation, allegations surrounded violations of the Investment Advisers Act of 1940 in connection with producing materially false and misleading marketing materials.
Even Warren Buffett has been subjected to the scrutiny of government agencies, so it’s worth looking deeper and CXO Advisory did just that when evaluating the performance of Weiss Research.
After researching 280 stock/ETF trades and 250 options trades, CXO Advisory concluded that the average return per stock/ETF trade was -3.4% and the average return per options trade was -9.3%.
Now while these results are clearly not stellar, it should be noted that they were reported in December, 2010, following one of the most volatile periods in stock market history. So perhaps you need to sprinkle onto them a pinch of salt.
Nevertheless, when analyzing any service, it’s a good idea to look under the hood and kick the tires of the service, ideally with a free trial, to see if you like it and it matches your expectations.
Will we ever truly know from the outside how good Larry Edelson was as a stock market forecaster? Perhaps not, but he certainly had renowned supporters and his fair share of detractors. That may simply be the nature of the game. Those who made money with Larry Edelson and his affiliated companies were fans, and those who lost money were detractors. Markets go up and down, and we suspect the same polarizing following may be true of many market research analysts.
If you want to get started with computer-oriented, objective analysis and independent stock market screeners, check out Financhill at no cost here.