Model Portfolio jackweyland:VALUE

My name is Jack Weyland. I am passionate about a few things: investing, music, sports, science, and the outdoors.

My journey into the financial markets began over 15 years ago with the book, The Wall Street Guide To Understanding Money and Investing. Since then, I have experienced real world successes and failures in the financial markets while extensively familiarizing myself with fundamental analysis, stock chart analysis, allocation strategies, and decision-making discipline.

Over the past 15 years, I have developed a unique perspective that values information and data in a different way than most. Through real world experiences and a persistent state of research, I have been able to analyze the financial markets without the constraints of anchoring and other biases. A few of these real world experiences have been through the perseverance required for being a member of the United States Military (United States Air Force) and the perseverance of being an over-the-road truck driver; both of these parts of my life were depicted in the book, The Warren Buffetts Next Door.

With a common sense approach to seemingly complex events, I have experienced major successes during my relationship with Marketocracy. Some of these successes include:

• 2006: Intermagnetics General bought out by Philips for $1.3 billion
• 2006: Kos Pharma bought out by Abbott Labs for $3.7 billion
• 2006: Tysabri re-introduction (became a billion dollar drug)
• 2007: Coley Pharma bought out by Pfizer for $164 million
• 2008: Iomai bought out by Intercell AG for $189 million
• 2009: Indevus bought out by Endo Pharma for $370 million
• 2011: Gralise approved by FDA in multi-billion dollar market
• 2011: AMR101 successful phase III trials in multi-billion dollar market that it will dominate

To be able to locate these investment opportunities, one must not only be able to correctly analyze without bias but also be logical with timing. One of the ways I achieve this is through the ideas discussed in the book,The Psychology of Judgment and Decision Making, by Scott Plous, Ph.D. I highly recommend reading this book, particularly because it brings to light the folly of most human perspectives; however, just now I will focus on two primary concepts that have had a significant impact on how I approach investing. These concepts are Heuristics and Common Traps.

Heuristics

Heuristics are experience-based techniques that assist in our ability to problem solve, learn, and discover. The following are a couple of examples:

1. Probability and Risk: You must be able to conceptualize probability and assess risk accurately so that you can make decisions without emotion. This ability was particularly important during the turbulent market in 2008 when many investors panicked and sold at the bottom and then bought back when the market had recovered 30%.
2. Break Compound Events into Simple Events: Stock prices are generally influenced by multiple compound events that make assessing probability much more complicated. I have found the key to analysis is to break those compound events down into simpler events. At this point, I can use prior experience or knowledge and valid sources to make logical decisions. One example of this is breaking down the potential success of a drug by asking simple questions. Does it solve a real problem? Do the benefits justify the risks to a patient? Is it superior to what is already on the market? Is there pent-up demand?

Common Traps

1. Don't Be Misled by Highly Detailed Information: Analyst reports are well written with plenty of numbers and "analysis" that back-up their conclusions, which can appear compelling because of the overwhelming amount of data analysis. However their conclusions can be wrong. Detailed information is not a substitute for judgment, but it often is used that way.
2. Overconfidence: Operate without emotion and without bias. Don't put all your eggs in a single basket.
3. "Sunk Cost Effect": Cut losses when appropriate and move on.