Summary
Part II of Phil Anderson’s April 2025 market commentary argues that breakout-to-new-highs patterns (“Mex Pete”) are a rational response to the documented reality that most stocks lose money and most fund managers underperform the index. The email uses SPIVA survey data and the Global Investment Returns Yearbook 2025 (UBS/Bloomberg) to show that only the best 5% of stocks drive almost all market returns, justifying a strategy of targeting breakout stocks with disciplined stop losses. The Oakleigh “18.6” Portfolio is presented as live evidence of this approach in the Australian market.
Key Claims
- For the 15th consecutive year, most US mutual fund managers failed to match the S&P 500 return — confidence: high (cites SPIVA survey, Standard & Poor’s)
- Over the three decades 1990–2020, 52% of global stocks lost money and 71% failed to match the market — confidence: high (cites Global Investment Returns Yearbook 2025, UBS/Bloomberg)
- The best 5% of stocks account for almost all global market returns (Bessembinder studies) — confidence: high (cites Bessembinder studies and Global Investment Returns Yearbook 2025)
- A stock that is destined to keep outperforming must at some point break into new all-time highs, making the Mex Pete breakout signal the logical screening tool — confidence: medium (logical inference drawn by author from the above data)
- Stop losses on failed Mex Pete breaks preserve capital for the next valid setup — confidence: medium (stated methodology, not independently verified)
- The Oakleigh “18.6” Portfolio (managed by Phil Anderson and Akhil, Australian market) has outperformed the index since inception — confidence: medium (chart shown but no exact figures cited in text; source listed as Oakleigh Investment Management)
Mex Pete References
- General methodology: Mex Pete breaks are defined as stocks breaking into new highs; these are monitored continuously as the primary entry signal for the Oakleigh portfolio strategy.
- Context for use: Author argues that because the top 5% of stocks generate almost all returns, identifying those stocks requires watching for new-high breakouts (Mex Pete patterns) as confirmation.
- No specific individual stock Mex Pete setups or tickers are named in this email. The discussion is conceptual/strategic rather than trade-specific.
- Stop loss discipline is explicitly paired with the pattern: failed Mex Pete breaks are exited via stop loss to preserve capital.
Stock Picks / Signals
None
Predictions / Forecasts
- Author signals that future emails will introduce additional trading patterns beyond Mex Pete to expand the reader’s repertoire — this is a content/curriculum forecast, not a market price forecast.
- Author states he will demonstrate “just how good W.D. Gann was” in upcoming content — no price or date forecast attached.
Notable Quotes
“In all markets, the best 5% of stocks account for almost all of the returns.”
“No one else in the world puts out this information. Gann was a genius.”