About

Eric Dunsker

I’m a retired systems engineer and product designer. I’m not a financial advisor.

As a Systems Engineer, I strive to make processes simple, effortless and productive. Investing is just another process.

As a User Experience Designer, I strive to create products and services that beat the competition - in this case, outperforming the S&P 500.

Simplify the Process & Improved Results

Investing used to drive me nuts.

The fundamental research required to pick individual stocks is time consuming and I never got the hang of reading balance sheets.

On the other hand, while I could see there were meta-patterns in the movement of stocks, but interpreting price action felt like reading tea leaves.

It was so easy to pick the right stocks at the wrong time, or the wrong stock entirely.

And while buying and holding an index fund was a viable solution, I always felt like I was missing something, especially at big downturns, like 2000 and 2008.

I needed something less time consuming and rife with judgement calls as picking stocks, but enabled me to do more than just ride an index and hope for the best.

After I discovered style ETFs, and countless hours of tinkering with backtesting tools (well, years really), I believe I’ve found it.

Why Am I Putting This “Out There”?

Confirmation - I’m too much of a researcher. I want confirmation of others’ experiences with Style Momentum before proclaiming a new era in retail investing.

Ego – Of course it would be hyper-mega cool if this method proves to do what everyone says “can’t be done.” Who wouldn’t love that? Doing a podcast or two with real pros about my “out of the box” method of investing would be a kick.

Why am I not charging for it? - Simple. I’m retired and uninterested in signing up for another “grind”. At this point in my life, time flexibility is more important to me than building a subscriber base.

That said, if you find Style Momentum to be valuable, I’d greatly appreciate your donating whatever you think the information is worth to you. And thank you.

Partner with a Fund Issuer

Every successful business has “idea” people with vision and “operations" people who know how to execute on that vision. I feel confident the Binary Style Momentum technique can create tremendous value as an ETF or hedge fund.

It’s a huge longshot, but if you’re in a firm with the experience and infrastructure to bring this concept to the market, I’d love to partner with you.

I want to:

• License my Growth & Value implementation of style momentum for a reasonable royalty.
• With the licensee, research if similar results can be produced using other market factors in a style momentum algorithm.

References

1. SPIVA U.S. Mid-Year 2023, spglobal.com, Sept 21, 2023
   Standard and Poor’s periodic report on the percentage of active funds that underperform the S&P 500.
2. Sommer, Jeff, 2023, ‘With the Odds on Their Side, They Still Couldn’t Beat the Market', New York Times, April 14.
   The article summarizes the difficulty active fund managers have beating the S&P 500 index.​
3. Katherine Lynch Value vs. Growth Funds: Value's Revival Is Uneven, Morningstar.com, Jan 6, 2022
   Discusses how the relative performance of growth versus value stocks changes from year to year and even over periods of a few months.
4. Thomas, Richard, Growth vs. Value Equities Insights, May 31, 2023
   Illustrates the relative performance of growth versus value stocks over the last few decades.
5. What is the House Edge?, wizardofodds.com, Sep 28, 2023
   Lists the typical “house edge” for numerous casino games.
6. Rotating Between Growth and Value: The S&P 500® Growth Value Rotator Index, spglobal.com, Aug 10, 2019
   Standard and Poor’s attempt at a Growth-Value style rotation index. It demonstrates the value of the concept, but doesn’t go far enough to mine the technique’s full potential.
7. Aarts, F., & Lehnert, T. (2005). On style momentum strategies. Applied Economics Letters, 12(13), 795–799. Video review of article
   Investigations of style momentum aren’t new. However, past studies like this one use stripped down methodologies that omit many of the elements that give style momentum its power.
8. Dunsker, Eric, (1998) Surfing the Stock Market, Haimish Press, 68 pgs. Out of print.
   My first awareness of style momentum came in the mid-1990s when I as introduced to the Barra Growth and Value indexes listed on Yahoo Finance.
   The tech bubble was building, so four days out of five the growth index outperformed the value index. It didn’t take long to realize, this might offer a simpler route to great stock performance.
   It would be many years before the tools, data and investment vehicles were available to research and realize the potential of style momentum.