
By Mike Adams
Since people began charting musical hits, some sixty artists have hit the number-one spot on the Billboard charts before vanishing from popular music entirely. These strange phenomena are known as one-hit wonders. A few of my favorites are “Oh, Happy Day” by the Edwin Hawkins Singers, who hit the Top 10 in 1968, and Norman Greenbaum’s “Spirit in the Sky” from 1969. Neither the Edwin Hawkins Singers nor Norman Greenbaum ever had another big hit. There are investment managers like that. They had one big splash and then average or mediocre results.
Robert Prechter was a two-hit wonder. He published the Elliott Wave Theory based on the Fibonacci sequence, a mathematical pattern found in nature and also observed for a period of time in financial markets. In October 1982, Prechter correctly predicted that gold prices would fall and stocks would enter a super bull market. He won the US Trading Championship with a 444% return in his monitored options trading account and was chosen to be the 1980’s “Guru of the Decade” by the Financial News Network (now CNBC). By 2009, with the DOW just under 10,000, Prechter predicted a crash that would be worse than the 1837 Depression, with the DOW falling as low as1,000!
Prechter is not alone. Almost every year, there are one-hit or two hit-wonders who call the market or pick a stock or group of stocks correctly. They gain notoriety and investors follow them for their advice, at least for a little bit. At its peak, Prechter’s newsletter reached over 20,000 subscribers.
It is reasonable to think there must be a way to successfully sell before the market drops and buy back in just before they begin to climb. Entire technology industries have been born of coding algorithms to massage tons of data to decide the precise timing to make those buy and sell orders.
The late Jack Bogel, who founded Vanguard, said, I think very wisely, “In my 50 years in this business I do not know of anybody who has [timed the market] successfully and consistently. I don’t even know of anybody who knows anybody who has done it successfully and consistently.”
There is no question that investment managers like Prechter have hit it big once or twice. For the most part they were one-hit wonders.
Compare that to one of my favorite stories about a man named Clifford Young. Young, a 61-year-old potato farmer, showed up for the Sydney to Melbourne Australian Marathon in his overalls and work boots. He left his dentures at home. The Sydney to Melbourne Marathon is 875 kilometers (544 miles), and the rest of the runners were all youthful, very athletic, and very well trained. They would have to be to run day after day to complete those 544 miles. You can imagine how many spectators must have laughed at the thought of a 61-year-old dressed in overalls and boots would think he could compete.
Clifford Young ran at a slow and loping pace, and by the end of the first day he was far behind. While the other runners stopped sleeping for six hours, Young kept running. Young ran for 135 hours without ever stopping to sleep. He won the race, finishing some 10 hours ahead of the second-place runner.
That is what we try to do at Adams Financial Concepts; we want to win. We want to finish in first place again and again, not disappear into obscurity. We want to press forward to win. It did not bother Cliff Young that he was far behind on his first day. At AFC, we know there will be times when others are out in front. We know there are times when our portfolios will experience periodic losses, setbacks, and unexpected drops. We just want to be at the head of the pack in the long run.
We have a track record that is now 20 years long. We are not one-hit wonders. There have been times, like 2022 and 2023, when we underperformed, but we stand on our long-term track record. We made up for the underperformance in 2024.
Most financial advisors will settle for a 5% return over the longer-term. At the end of 25 years $500,000 will grow to $1,583,177. They will tell you it is a “safe” return. At Adams Financial Concepts we would be horrified with a 5% return over a period of 25 years. We strive to turn $500,000 into $16,459,476 after 25 years. That is a 15% compounded return over that time period.
We live in unsettling times. In just the last two decades we have lived through a Great Recession, a pandemic, an inflationary period. In addition, we are living through the largest land war since World War II and a Middle East war. We live in a world that faces the greatest debt burden ever seen in history. Things that have never happened before are happening all the time and will probably continue to do so.
We believe that a 5% or 6% or 7% return is inadequate compensation for our clients to compensate them for the uncertain times we probably will continue to experience.
Article Written By:
Mike Adams, President & Principal
Adams Financial Concepts LTD
1001 Fourth Ave, Suite 4330, Seattle WA 98011
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