NSP 100 Index 

A prime measuring stick of the NSP method's performance starts right here--with the NSP 100 Index. More than compare favorably, it has for the most part actually blown away other benchmark type indices such as the S&P 500 and Nasdaq 100 etc. We will let the numbers speak for themselves.

What Exactly is the NSP 100 Index?

Prior to the start of each week's trading, the NSP 100 Index will be published in the Member's Area of the website. What it is comprised of is an index of 100 stocks (each allocated at 1% of the total available for calculation purposes). Before digging into the impressive performance details, here are a few important items to keep in mind also:

• It is generally much easier for one to cherry-pick and display spectacular eye-popping results for a mere 3 or 4 stocks here and there than it is to achieve strongly outperforming gains when tracking the results of a full 100 stocks. 

• What is particularly amazing about the performance of the NSP 100 Index is the very simplicity in how it is measured. It is as easy as this. The 100 stocks are merely considered purchased at Monday's open and sold at the following Monday's open (Note: Tuesday would be substituted for Monday if Monday happened to be a trading holiday) if it is no longer in the top 100. That's it! Week over week. Nothing complicated about it whatsoever. All we are talking about is a simple portfolio re-balancing to start out each week. 

Now let's take a closer look at the a performance: 
 

* (Results achieved from 3/31/01-12/31/01 are annualized across the full year)

Once again, the results of the NSP 100 Index have been rather sensational for the most part. That is particularly the case when considering that:

1. We are talking about the performance of a full 100 stocks on a weekly basis.
2. The numbers are computed off of holding periods of merely only one week's time.
3. The results are calculated using the very simplest of trading techniques. That is consistently buying at Monday's open and selling at the following Monday open. Simplicity at its finest!

Additional Analysis of the NSP 100 Index

Rather than be satisfied and just stop there, we then broke down the analysis of the NSP 100 Index itself a step further. What if the week-to-week activity was analyzed in a couple of different ways as well? With those thoughts in mind, the NSP 100 Index was also specifically measured as if:

1. The stocks were considered bought and subsequently sold on each week's Monday's close rather than "open" AND ALSO
2. The stocks were considered bought and subsequently sold on Monday each week at an average price--precisely looking at the average of the high and low achieved for the day.
   
   This additional analysis seemed to even further emphasize the outright effectiveness of the NSP 100 Index for identifying quality stocks ready to move. Essentially, the results were remarkably similar no matter which of the approaches were used for the most part.

See the following results:   

* (Results achieved from 3/31/01-12/31/01 are annualized across the full year)
 
We will dig deeper into the specifics behind the numbers in a moment, but other than some difficulties in 2008 (more on that to come), the NSP 100 Index has basically outright trounced the S&P 500 on a pretty consistent basis. Also, remember we are discussing the merits of 100 stocks on a weekly basis rather than only a handful here and there. Please note: We will primarily focus on the opening prices of the NSP 100 Index going forward.

NSP Top 10 and NSP Top 20

To more effectively illustrate the point of narrowing the number of stocks invested, we will briefly turn our attention to the NSP Top 10 and NSP Top 20. As the names may imply, the NSP Top 10 is merely the top ten ranked stocks of the NSP 100 Index and the NSP Top 20 is based on the top twenty ranked stocks of the NSP 100 Index.

So let's see how the top 10 and 20 have done through the years:
 

 * (Results achieved from 3/31/01-12/31/01 are annualized across the full year)

As you can see, while focusing in more on the cream of the crop, the NSP Top 10 and NSP Top 20 have been even much stronger than the ultra-effective NSP 100 Index has been in a vast majority of cases. Incidentally, we will also track their progress, along with the NSP 100 Index, going forward.

NSP 100 Index vs. S&P 500

Let's now turn some attention to the showdown between the NSP 100 Index and the S&P 500 on an annual basis. We will attempt to break down some of the years into chunks that showed some similar characteristics.

2003

Since the year 2003 was the most positive from most perspectives we will start there. While the S&P 500 enjoyed its most profitable year in the 2000's to-date at +26.4%, the NSP 100 Index still beat it by almost a 4-1 margin--churning out a whopping gain of +104.5%. Meanwhile, the top 10 and 20 stocks of the NSP 100 were about as special can be. The pace was set by the NSP Top 10 which registered an absolutely monstrous, almost ridiculous profit of +359.0%. Obviously we would like to see more of these types of examples.

2004, 2006, 2009

These 3 years represented the next best ones for the benchmark S&P 500 during this specific time period. All in all, the NSP indexes acted in positive, and somewhat similar fashions. While still almost doubling the performance of the S&P 500, 2006 turned out to be the most difficult year of this group for the NSP indexes. Meanwhile, the NSP 100 Index gained a very solid +45.8% in both 2004 and the most recently completed year 2009.

2001, 2005, 2007

In these 3 years the S&P 500 achieved very minimal gains or losses overall. That was not the case for the NSP indexes however as they all produced gains of more than 10 times greater than the S&P 500 in most examples--some extensively more.

2002

2002 was a very bearish year for the broad market S&P 500 as it declined by -23.4%. The positives were much more plentiful across the NSP Indexes however. The NSP 100 Index managed to keep its head above water while the NSP Top 10 and NSP Top 20 each displayed growth of +13.0%.

2008

This is a year in which one very large section could be devoted to it all on its own. 2008 was truly an eye-opening experience for many but could also serve as a good learning mechanism. Let's dive deeper into the details of this one distinct chink in the armor.

For starters, it should be noted that 2008 was flat-out one of the most bearish single years in stock market history by virtually any measure. The S&P 500 lost -38.5% while the Nasdaq declined by more than a whopping -40%. Need more? How about the blue-chip Dow Jones experiencing its 3rd biggest annual loss ever--dating all the way back to 1899? That is a whole bunch of years folks.

Taking all of that into consideration, the NSP 100 Index did still manage to hold up better with its only annual loss turned in thus far, at -23.8%. The declines were even much less significant when looking at the NSP Top 10 (-8.0%) and NSP Top 20 (-12.0%). Keeping these in perspective once again, one cannot lose sight of just how incredibly bearish the broad markets were in 2008.

In perhaps the biggest of understatements, 2008 was obviously a very tough year for stock trading in general. Who knows if and when we will experience another one like it, but one must always plan for the worst. Certainly many saw their 401k's etc. dramatically sliced, and many managed funds even blew up amongst the surrounding adversity. It can also help provide a very good lesson in fully respecting the markets at all times though. It firmly emphasizes that churning out one big profit after another is not something that should simply be taken for granted despite some of the ridiculous hype that sometimes exists in segments of the industry.

Overall

Remember again just what the investing landscape has been like during this time frame of the 2000's when examining the stellar overall results turned in by the NSP system. During what has often been a very difficult stock trading environment going back to the year 2001, the benchmark S&P 500 has still actually slipped by almost -4% overall from where it started back at the end of March 2001. That is even on the heels of a very respectable year 2009. Meanwhile, the NSP has just continued to roll on. Consider that in 8 of the 9 years the NSP Value Plus Method actually did better than the very best single year did in the S&P 500. Many dramatically so. Impressive indeed! 

By contrast to many overly form-fitted systems, we believe that the NSP is built on simple, yet very sound and tested principles, that quite simply just make sense...and can continue to do so going forward. Even with as basic of a process as buying on Monday's open and re-balancing the following week at the same time, the NSP 100 Index has significantly outperformed the S&P 500 in testing going back to 2001. In the bearish 2008 specifically, the system still held up much better than did the S&P 500. The NSP Value Plus (more to come) in fact even produced solid gains in the ultra-bearish 2008.

Also keep in mind that as simple and effective as the NSP 100 Index has been, it can really be just a starting point for virtually unlimited possibilities. One such application of this can be seen through the NSP Value Plus Method.

For more information on the NSP Value Plus please click here.