In deciding whether our market outlook is right or wrong, the market is the only arbiter. In other words, a beautifully-constructed logical argument will not make us right if the market moves opposite to our expectation.

We endeavour to have no preconceived opinions as far as the expected future performance of the financial markets is concerned. Our goal is not to be unswervingly bullish or bearish, but to position ourselves in synch with the major trend.

It is never 'different this time' and it is always 'different this time'. By this we mean that history tends to repeat itself, but it usually does so with some very significant variations. Those who forecast the markets based purely on what has happened in the past are often good at identifying similarities between the present and the past, but bad at recognising the critical differences.

We question everything we read/see/hear about the financial markets (nothing is automatically accepted at face value) and we never dismiss any new idea/concept 'out-of-hand'.

There is no standalone method or system that can be used to reliably forecast the markets beyond the very short-term. The performance of the financial markets is affected by a myriad of factors and a mechanical or a one-dimensional/highly-regimented approach will not yield consistently good results. We have found that the best results are achieved by integrating the analysis of fundamental, technical, psychological, monetary and political factors.

We do not believe in automatically buying on confirmation of strength and selling on confirmation of weakness because doing so will often result in buying near short-term peaks and selling near short-term troughs. Our goal is to buy when the risk/reward ratio is attractive and to sell when it is not (note that this is not as simple as buying when a stock becomes cheap and selling when it becomes expensive).

Relationships exist between the various markets. For example, bond prices tend to move in the opposite direction to energy prices and in the same direction as stock prices. However, there are sometimes quite lengthy periods of time when these inter-market relationships do not hold. For this reason the relationships between the different markets should be accounted for as part of an overall forecast, but they should never be the dominant factor in a forecast.

There are certain forecasting methodologies, cycle analysis being a prime example, that are outside our field of expertise. In such cases we are not averse to merging the work of other analysts with our own research in order to 'complete the picture'.

Even a forecast built on the most solid of foundations will sometimes be shattered by an unforeseen event or a market that simply does the unexpected. In other words, forecasting the markets can be a humbling experience so it is important to be humble to begin with.

We do not believe that a 'buy and hold' investment strategy will yield good returns over the next several years. It is our view that the most successful investors of the future will take advantage of increasingly-volatile markets by scaling in-to and out-of stocks based on an appraisal of risks versus rewards.

The defects inherent within the present monetary system will result in the unrelenting depreciation of currencies and an increase in the frequency of financial crises. Throughout the ages gold has proven itself time and time again to be the ultimate refuge in times when confidence in the official form of money was declining. As such, gold-related investments should be part of a balanced portfolio. As well as holding selected gold stocks as a hedge against currency depreciation and financial crises, we endeavour to profit from the fact that gold stocks and the overall stock market have a strong inverse correlation. Our belief is that by adjusting the relative weightings of tech (or other non-gold) stocks and gold stocks within a portfolio it is possible to achieve good returns during most investment climates.

The Internet is changing the way almost every business on Earth is conducted and is having, or will have, a profound influence on the lives of a large proportion of the world's population. It is, without doubt, one of the greatest inventions of all time and is set apart from other great innovations, such as the automobile, the telephone and the computer, by the speed and geographical spread of its impact. We believe that great investment opportunities will exist for many years to come in the stocks of companies that are able to improve the speed and efficiency of the Internet. We are also interested in companies that have developed profitable (or potentially profitable) Internet-based applications.

We have found that our investment performance improves when we follow the rules listed here.