User:Baminvestor

James Gregory Savoldi, (born March 23rd, 1962 in Orange County California) is a global stock, commodity and currency market forecaster, best known for his development of the proprietary “BAM” Model. BAM is an acronym for “Behavioral Analysis of Markets” and it is the exclusive method Savoldi uses to provide directional predictions and price targets in all of the markets he tracks. He gained a degree of prominence after predicting a TOP in the US real estate market in 2005 during a period when many Wall Street analysts at major firms were raising earning estimates for home builders. During this period Savoldi was calling for massive crashes in the stocks of those home builders over the coming years (something that did occur). Possibly more high-profile, were a string of successive predictions in 2007-2008. In November of 2007—one month after the Dow Jones Industrial Average had reached its all-time high at 14,198—Savoldi wrote a report to clients predicting a “brutal 58% bear market decline into 2010 with the SPX round-tripping the entire 2002-2007 bull run before finding support into the SPX 680 level.” (the S&P 500 reached his 680 target in 2009) Savoldi then followed that forecast with a July 2008 prediction that the VIX (CBOE Volatility Index) would spike to much higher levels than Wall Street analyst were forecasting. and an August 2008 prediction that the brokerage stock index would witness a “40-60% CRASH Coming next 8 weeks.” (all of which turned out to be correct)

Career

Savoldi attended Auburn University in Alabama and graduated with a degree in criminal justice law enforcement in 1986. After graduation he worked in various jobs and spent six years studying the price movements of financial markets with a focus on the Dow Jones Industrial Average. During this period, Savoldi learned of Ralph Nelson Elliott and the Elliott wave principle and was conflicted:

“I found the method exciting in its potential but lacking in its ability to make consistently accurate predictive forecasts. It was at that point I set out on a twenty-year journey determined to build an entirely new investment theory based on capturing data generated by “fractal capitulations”—a discovery I found to be the key components in all market turning points.” After integrating this new discovery (behavioral analysis of markets) with his proprietary velocity indicator, the “BAM Model” was born.

In 2005, Savoldi joined Standard Pacific Capital—a multi-billion dollar hedge fund in San Francisco California—where he was able to use his new model to predict the top of the housing bubble as well as the subsequent collateral damage in financial markets and economies around the globe.

Prominence

After the model’s high profile success—including its pinpointing of the huge bull market in both corn and wheat—Savoldi launched “The BAM Report” and set out to offer his services to a select group of stock and commodity hedge funds around the globe. In October of 2009, Savoldi launched BAM Investor, a new service aimed at individual investors:

"We're on a mission to help individual investors take back control of their portfolios by allowing them to take a 'peek behind the curtain' with respect to advanced institutional financial models."

Savoldi's work has drawn increased attention recently based on the extraordinary success of Nassim Nicholas Taleb's book titled "The Black Swan" as well as Taleb’s previously published book titled "Fooled by Randomness." Ironically, Mr. Savoldi disagrees with Mr. Talebs assertion that market events are unpredictable—a disagreement based on the fact that his “BAM model” not only predicted the collapse in the US real estate market, but also predicted the collapse in the mortgage brokers, securities brokers, banks, and retailers.

Adding to his recent notoriety, Mr. Savoldi used his behavioral analysis theory to predict an unlikely “melt-up in the Japanese Yen” as well as the speculative top in crude oil—predicting “an immediate collapse to the 87, 47, and 36 dollar level”—at a time when crude oil was trading at 147 dollars per barrel.

Criticism

While Savoldi has his admirers, he has been criticized by media and pundits for a June 17th, 2010 press release forecasting a devastating 80% decline in the shares of Apple Inc. (AAPL). With shares trading at 272, Savoldi predicted that Apple stock would “trade down to the 155 level into the Fall of 2010 and the 45 dollar level during 2011.”

The press release was quickly picked up by Henry Blodget, infamous analyst of the 2000 tech bubble debacle and current publisher of the wallstreetinsider. In the article, Blodget blasted Savoldi for the prediction calling it “baseless.” A tech writer at CNN/Fortune also attacked Savoldi claiming that his Apple prediction was nothing more than a “shameless publicity stunt.” Savoldi then fired back at CNN and reiterated his prediction in a piece published on the baminvestor BLOG.

Unfortunately, Savoldi’s rebuttle only antagonized what he referred to as “the Apple cult” and both his company website and blog were attacked relentlessly by hackers and eventually forced off-line. Apple’s stock declined after Savoldi’s prediction and as of this writing the success or failure of the prediction has an unknown outcome.

Behavioral Analysis

According to a press release, BAM Investor claims to be “the first hedge fund financial model based on behavioral.” In Savoldi’s words:

“When compared to Technical Analysis or Fundamental Analysis, Behavioral Analysis, I believe, creates significant value through its predictive, as opposed to reactive, nature. Most technical analysis tools follow current price action and generate indicators which provide buy and sell signals after price movement has already occurred. The fact that technical support levels sometimes hold and sometimes do not, and the fact that an identical piece of fundamental news can be reacted to in a positive or negative manner on the same day, lends very little predictability to the use of technicals or fundamentals when trying to anticipate future directional movements in financial markets. Although it is evident that important information as to the strength or weakness of a financial instrument can be gathered when support or resistance levels hold or fail (or when news events or earnings reports are interpreted as positive or negative) the ability for a technician to consistently predict price levels that will hold or fail and the ability of a fundamentalist to consistently predict when news will be construed as positive or negative, remains a challenge. In both cases the ability to predict seems to hinge upon the individual analyst's skill in his particular market discipline and his years of experience in observing the markets. Behavioral Analysis, by comparison, is predictive in nature and based on external laws of nature, which can be expected to "cause" traders to change their perception of current market conditions before they themselves have made a conscious decision to change their perception. One tenet of B.A. is that "at a certain point in the future—hours, days, week, months, or even years from today—traders’ attitudes will shift from optimistic to pessimistic (or vice-a-versa) regardless of their current bias, bullish or bearish, and with that shift will come a price reversal in the market." According to the BA model, price action follows predetermined patterns based exclusively on human emotion.

B.A. Thesis

Data output created by human reaction to greed and fear thresholds is measurable, and through these measurements future market psychology can be predicted hours, days, weeks, months, years, and even decades before actual trading takes place. Market reversals are an inevitable result of excessively bullish or bearish sentiment (greed or fear) and it’s that “emotion” that causes the majority of traders to enter positions on the same side of a market at roughly the same point in time--which in turn leads to a price reversal. The B.A. model uses clues created by today's emotional responses to market behavior in order to predict future market reversals, allowing followers of the system to enter or exit positions near the highs or lows of market movements while at the same time providing an extremely favorable risk/reward ratio. According to the principles of “behavioral analysis,” events unfolding in today's financial markets are currently creating a map of the future that will be strictly followed regardless of any attempts through human intervention to change the outcome of price movement.The logic behind this assertion can be attributed to the fact that, regardless of lessons learned by previous generations, human beings seem predisposed to repeat both positive and negative behavior exhibited by past generations. In fact, it is this dynamic that spawned the popular adage "history repeats itself." Because of this assumed "law of nature," market participants' reactions to future events—although dynamic in emotional extremes—will continue to elicit greed and fear, driven by the intrinsic human desire to pursue pleasure and to avoid pain, and that in turn will result in predictable repeatable reactions in financial markets. Although these characteristics of "human nature" and their effect on traded markets are generally accepted by market participants, the model's ability to predict when these emotions will again surface—and the intensity with which they will move markets—is the key differentiator between the B.A. model and more conventional market analysis tools. The BA model's ability to predict future price action is scientifically unexplainable but well documented through past performance and, in many cases, market reaction to news releases, natural disasters and other events that appear to "shock" certain markets, have been predicted by the B.A. model days or even years before the actual fundamental events unfolded. Among the long list of examples seen in the past are crop freezes, hurricanes, droughts, foreign government announcements, Federal Reserve policy releases, and rumors of dubious origin.

Family Background

JG Savoldi is the son of Michigan State Big Ten conference high-hurdle champion Joe Savoldi, and grandson of Notre Dame all-american fullback and World Champion professional wrestler “Jumping Joe” Savoldi, creator of the “flying dropkick.”

'Notes'

'References'

• BAMinvestor.com www.baminvestor.com • BAMinvestor BLOG www.baminvestor.com/blog