Sunday, January 18, 2009

Nadel's "black box"

Supposedly AG had a "black box." Toxic. Madoff had a "black box." Toxic. Nadel had a "black box." Toxic. Look at how his "black box" was touted. It had "consistent" returns like Madoff. And like Madoff, he had someone else doing the touting for him. And like Madoff, it was "proprietary!" (No idea how long the link below will stay up on the web!) Now Art Nadel, of Scoop Management is missing, and so is $350 million dollars. And like ever other missing hedge fund player, a suspicious suicide note seems to be at the scene, which so far have been as fictitious as the hedge funds returns!

Did Your Money Manager Return 21.6% in 2002 19.8% in 2001 55.1% in 2000

After last year's market disaster (S&P 500 -23.3%), would you be happy with a 21.6% return in 2002, a 19.8% return in 2001 (S&P 500 -13%), or a 55.1% return on your equity investments for the year 2000 (S&P 500 -10.1%)? Would you be happy with a 90.7% return in 1998 and 87.8% in 1999?

These are the actual results achieved by an effective team of managers in Sarasota, Florida. After 39 years on Wall Street, Neil Moody left the Street to form an association with Arthur Nadel and his group to manage equity funds. The Nadel Group had enjoyed unusual success with private investment groups, testing a technical trading system that interacts with fundamentals to produce results that consistently outperform the market averages.

My curiosity about Nadel's computerized trading program eventually led to a due diligence visit to the offices of Nadel & Moody. Understandably, I did not learn the various mathematical formulas in Nadel's "black box" computer program.

What I did learn is very important for the individual investor. After 26 years of reviewing the track records of over 11,000 mutual funds, 6,000 money managers and 5,800 hedge funds, Nadel's computerized investment program has produced the best track record and most consistent returns I have ever seen.

His proprietary program, combined with screening for stock fundamentals, has consistently produced a profit month after month in both up and down markets. The highly technical program used by the group is proprietary, but I was given an opportunity to see it in action during a due diligence visit to their office.

A large group of computer monitors display market data continuously, reviewing and digesting current market movements and comparing them to previous data. Immediate newswire flashes are intermingled with muted "talking heads" on CNBC. Equity positions are adjusted, long and short, by means of instant-response trading programs.

Nadel & Moody offer private investment programs for pension plans and wealthy individuals, which are organized and administered by Moody. Not surprisingly, they do not advertise. Each investment program is set-up as a limited partnership which is limited to only 99 investors. Each program is currently accepting only accredited investors. An accredited investor has a net worth of $1 million or an annual income of at least $200,000 each year over the past 2 years. An investment programs is almost always open to accredited investors.

Limited partnerships of this type include a management fee and an incentive fee. Minimum investment is $100,000. The investment should be viewed as long term. However, investors may redeem all or a portion of his/her investment at the end of any calender quarter. Nadel & Moody offer private programs that are available to qualified investors and only through the firm¹s offering materials.

Over the past 68 months of managing money, Nadel's Management Group has been down fractionally twice and flat once. During the same period, the S&P 500 Index has been down 33 months out of 68. While past performance is no guarantee of future results, keep in mind that a consistent annual return of 26% will double your money every three years

If you have questions or would like to review the firm's offering summary, call (800) 966-7693, or you may e-mail your name, address and telephone number to us at and we will mail the company's information out to you.

Donald H. Rowe
Carnegie Asset Management

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