My final project

  The SuperDex: The New Way to Invest

What is SuperDexing? It is a new way to organize the indexes in the Stock Market. The stock indexes such as the S&P 500 have become very popular ways to invest in the market despite flaws in the structure. The first index was created by Charles Dow which was called the Railroad Average. Dow created the index to show investors how the economy is doing. The index then became a way for investors to cut down on research and invest faster. These indexes were inefficient ways to invest but still the most popular among investors. SuperDexing can fix this by reorganizing the indexes and utilize revolutionary new rules to fix the inefficiencies in the indexes.

Today, indexes are organized by price weighting systems. Which means the stocks with the highest price sit at the top of the food chain. The index is also used to let companies measure their managers against the index. Almost all of the active managers are not able to beat the index. The managers have been lagging behind, they are unable to keep up because the market is changing. In other words, the way of investing is changing everyday while the indexes have been anchored on old fashioned formulas. This has made it harder for people who are new to investing choose the right stocks and be successful.

The indexes were made to give a person a good view of the economy, now they have become a vehicle to invest. The main problem with the indexes and the theory surrounding them is that investors often do not understand the history of the indexes and think that if an investor buys the top stock, they will succeed. This idea that the index shows a person the best stocks on the market is both wrong and illogical. The indexes were used as broad views of the economy. Inexperienced investors saw the indexes as a list of the best stocks ranked based on price when in reality it was not. The main demographic that have been hit the most by the index is people who are trying to retire. They believe that the index is built perfectly, and they invest in the top stock thinking that it will give them a good retirement. In the long run, the index doesn’t produce the return that the person was looking for and the person has to keep working despite their age.

The way that managers beat the indexes originally was to do research and pick the stocks based on criteria. This worked for a long time up until computers were changing the markets. Computers made everything go much faster and the managers could not keep up. The way managers originally worked was they would spend time researching a stock, then they would hold it for about two years, then they would sell it. Once computers bursted onto the scene, the computer would take seconds to find a stock, then hold it for about twenty four seconds, then sell it. Money could be made in seconds and managers became obsolete. Investors with portfolios began investing into the indexes in response to the manager’s failure to beat the market. In short, the manager’s effort to win favor over the indexes failed and the indexes rose to prominence.

SuperDexing is the solution to the problem of an inefficient index and a changing market. The SuperDex formula has been designed to be a newer and smarter way to organize the indexes. SuperDexing is based off of a combination of the two investment academic principles: one is called “behavioural finance,” which states that there is a psychological method to investing that makes investors make irrational decisions and eventually shift the balance of the market. The other is more quantitative,  it states that share price is the single best indication of whether or not a stock is doing well. In short: data plus academic pattern recognition equals return. Some key characteristics of the formula is that it is completely transparent, which means that a person who has a portfolio can see everything being done which boosts the level of comfort in the person. It can be deployed and liquidated in a day, and best of all, the cost and risk is low, while the return doubles.

The indexes were built to compare stocks and get an idea of the economy. It then evolved into an easy and low risk way to invest. This evolution made the active managers obsolete and the dependance on the indexes higher. SuperDexing can change all that by using a new formula to organize the indexes and lower the risk, and double the return. Superdexing can fix the problems of the past and propel us all into a profitable future. If you have made it this far, congratulations you are a cool kid. and remember kids, money over everything.

Abstract for transformation

What is SuperDexing? It is a new way to organize the indexes in the Stock Market. The stock indexes such as the S&P 500 have become very popular ways to invest in the market despite flaws in the structure. The first index was created by Charles Dow which was called the Railroad Average. Dow created the index to show investors how the economy is doing. The index then became a way for investors to cut down on research and invest faster. These indexes were inefficient ways to invest but still the most popular among investors. SuperDexing can fix this by reorganizing the indexes and utilize revolutionary new rules to fix the inefficiencies in the indexes.

A book that has changed my life is Of Mice and Men By John Steinbeck. Of Mice and Men is about George and Lenny (Lenny being mentally disabled). They struggle through the life of a migrant worker while maintaining their dream of owning their own ranch. The story deals with complex subjects such as sexism, racism and mental illness. Of Mice and Men gave me a new perspective on the world around us. It showed me the true benefits of friendship and loyalty. I found it fascinating how George can change from an irritable person to a person who only wants the best for himself and his best friend. I found it very inspiring watching two men work through incredible conditions and the only thing keeping them from giving up is their loyalty for each other and their dream.

The New Deal helped thousands of Americans with food and shelter for the poorest of people along with the people hit the hardest by the Great Depression. People such as sharecroppers and independent farmers in my opinion were helped the most,  because of the government who took the time and lended a hand. Soup kitchens started popping up all over the  country to help the starving. People helped each other to become a better country. The most important part of the New Deal in my opinion was to get the work force ready and healthy to work and rebuild the economy.

After the Great Depression, the government pretty much built the economy from the ground up by creating jobs such as building bridges, houses, and sewers. This jump started the economy and brought the entire country up from the ground. The CCC or the Civilian Conservation Corps was a program that helped re-plant forests and drain swaps. This work paid well and often which made it very popular.

The Social Security Act was an act that helped elderly people who could not support themselves because of their age. The act kept a retirement account that had enough money in it to last a person for a long amount of time. Before, the elderly had to either work or live off of what they had. This posed a large problem for people who just wanted to live out their twilight years in peace.

During the depression, farmer's made more than they could buy which dropped prices so low, crops were worth next to nothing. This ruined the economy. After the depression, the government helped farmers run their own farms individually without having to become a sharecropper.

My first time at the Museum of Tolerance was an eye opening experience. We started by looking at the early rises of the Nazi party, I saw the struggle of the German People and the German Jews living in the biggest depression of their time. The currency was worthless, and families lived off of soup kitchens and they lived in old buildings. I began to feel for their struggle. I began to understand how desperate they were. They were so desperate, they let a troubled man with a deep hatred take power. Hitler used an age old scapegoat to turn the heads of the people and turn them in a terrible direction. Hitler blamed the Jews for everything, he especially blamed the Jews for taking all of the wealth in Germany even though they were less than one percent of the population. We learned about the terror of Kristallnacht and the mass deportation of Jews from their homes. Later in the tour, we heard a holocaust survivor named Rolf Gompertz talk about his experience during Kristallnacht. He said “As the Storm Troopers entered our house they chased down my father and cornered him... He reached into his desk and pulled out his Iron Cross which was awarded to him during WWI,” this quote moved me in a certain way. It made me think about how these people who had served their country, those who had risked their lives to save their country, had been deported like they didn’t belong in the country. It shocked me to see the transition from the Jews being completely integrated into German culture, to alienated people who are on their own. The Museum of Tolerance made me study the patterns of history. Now that I have seen what man is capable of doing to another man, I believe it is the my job along with everybody’s job to keep action like the Holocaust and people like Adolf Hitler from coming to power. Elie Wiesel said “Once you hear a witness, you become a witness,” I had become a witness. I had sat in a life sized model of the gas chambers, I had seen footage of people being shoved into a train and transported to the death camps. I had become a witness. A wise man once said, “history always finds a way to repeat itself,” I think that it is important for people to know exactly what happened to the Jews and all the other people who were sent to the Concentration camps. People need to see the motivations of Hitler and the struggle of the Jews so they can stop this from happening again by looking at the patterns that will repeat eventually.  

My experience at the Museum of Tolerance was an experience that will stay with me forever. We started by looking at the early rises of the Nazi party, I saw the struggle of the German People and the German Jews living in the biggest depression of their time. The currency was worthless, and families lived off of soup kitchens and they lived in old buildings. I began to feel for their struggle. I began to understand how desperate they were. They were so desperate, they let a troubled man with a deep hatred take power. Hitler used an age old scapegoat to turn the heads of the people and turn them in a terrible direction. Hitler blamed the Jews for everything, he especially blamed the Jews for taking all of the wealth. We learned about the terror of Kristallnacht and the mass deportation of Jews from their homes. Later in the tour, we heard a holocaust survivor named Rolf Gompertz talk about his experience during Kristallnacht. He said “As the Storm Troopers entered our house they chased down my father and cornered him... He reached into his desk and pulled out his Iron Cross which was awarded to him during WWI,” this quote moved me in a certain way. It made me think about how these people who had served their country, those who had risked their lives to save their country, had been deported like they didn’t belong in the country.

Elie Wiesel said”once you hear a witness, you become a witness,” I had become a witness. I had sat in a life sized model of the gas chambers, I had seen footage of people being shoved into a train and transported to the death camps. I had become a witness. A wise man once said, “history always finds a way to repeat itself,” I think that it is important for people to know exactly what happened to the Jews and all the other people who were sent to the Concentration camps. People need to see the motivations of Hitler and the struggle of the Jews so they understand that this cannot happen again.

Raft #2
R = An American Texan
A = Santa Anna
F = Comprehensive Treaty
T = Texas should be independent from Mexican rule because...

 Texas should be independent from Mexican rule because your laws are hurting the common man who follows the law and those who pay their taxes. You refuse to pay your soldiers and therefore they take it out on the common rancher. They steal our food, they steal our horses, they steal everything of value that we own. My compatriots are ready to revolt, your soldiers are debating mutiny while you live in comfort. Though you may not realize what you are doing for the people who live under you, we would like to propose the annexation of Texas. If you do not agree with the terms, you will be faced with good old fashioned Texan fighting.