What is the Greedometer?
The Greedometer® is a strategic investment conditions indicator designed to identify secular extremes i.e., long term US stock market peaks and troughs.
Try it out! It’s interactive.
- Adjust (slide) the input parameters to the Greedometer® and watch the needle move as the risk level changes.
By moving the slider dot for any of the top 4 inputs, the Greedometer’s risk level changes.
- i-phone / i-pad: touch the brown area on a slider to select input values.
In reality, these parameters don’t operate wholly independent of each other, as depicted with this interactive gauge. But the relationship between individual input parameters and the Greedometer gauge is reasonably approximated by this. To protect the intellectual property behind the proprietary Greedometer algorithm, only 4 of the parameters are adjustable via this tool. Having the other inputs non-adjustable inhibits the ability of the Greedometer to reach extreme readings (in case some of you are trying to crash the needle).
Note: Some may be familiar with a gauge found elsewhere on the internet that became public in May 2012. It has a similar appearance, name, and function. However, Greedometer is trademarked with the U.S. Patent and Trade Office. The trademark application was received by the USPTO in May 2011, and approved/registered in May 2012. Draw your own conclusions.
Want to learn more from the Greedometer? You’ll need to know the recent and forecast Greedometer readings (watch the videos and you’ll see). This is contained in the Basic Newsletter. Try it for free for 30 days.
If you want to know even more from the Greedometers (perhaps you want to do some tactical trading)? Watch the video of the 2007-2009 crash and see how much detail is provided by the mini Greedometer and its sequence. You’ll need to be an Advanced Newsletter subscriber to obtain this sort of data for the current timeframe. Be your own long-short hedge fund manager. There is no free trial for this service because essentially the secret sauce and S&P500 forecast is provided.
Anyone can examine a historical stock market chart, identify the major peaks and troughs, and thereby reach a conclusion those levels are worthy of representing future stock market tops and bottoms. However, this is not what the Greedometer does. None of the parameters contained in the Greedometer algorithm is stock market price. Including it would be intellectually disingenuous (cheating), and would result in a near-useless indicator.
To illustrate this fact, the S&P500 index hit an all-time peak of approximately 1565 in October 2007. When this happened, the Greedometer registered 7000rpm. Yet in April 2011, the Greedometer registered 8000rpm (maxxing-out the gauge) while the S&P500 was at approximately 1330. Purely using the stock market as an indicator would have meant you would not have been concerned until the S&P500 climbed nearly another 20% higher. Yet in May – July 2011 the stock market rolled over and began to collapse at a considerably faster rate than it did at the initiation of the great stock market collapse of 2007 – 2009! The Greedometer not only identified this threat in April 2011, but it also quantified the scale of the stock market drop as likely being larger than the one seen in 2007 – 2009. The fact that the collapse initiating in April 2011 was stopped in October does not invalidate the Greedometer’s warning because without the efforts of the Fed and ECB in the autumn of 2011, there can be little doubt the stock market would have continued its collapse.
The Greedometer® is supported by a database of several thousand data points (mostly weekly) beginning in January 1999 and incorporates nine sources of macroeconomic as well as fundamental and technical market data.
The graphical gauge resembles a tachometer commonly found in cars and trucks. Whereas tachometers warn when an engine is likely to self destruct at high rpm, or stall at low rpm, the Greedometer borrows from this analogy and identifies periods of extreme greed and fear that accompany secular US stock market tops and bottoms.