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1987-2007

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These articles in the financial press show how Herma Koornwinder gained credibility and validation in the media due to the accuracy of her analysis and forecasts and the successful management of her portfolios. Many publications maintained contact with her for frequent interviews and articles over the years. She is grateful to the media for providing her with a public platform.

Date, Article & Source
1987-06-15   Anouk is hooked - NRC Handelsblad
1987-12-12   Head and Shoulders - NRC Handelsblad
1988  -  -  -   The Hallelujah effect - Mees Bulletin
1988-04-02   Professional analysts too commercial - De Financiële Telegraaf
1989-09-23   Technical analyst Koornwinder: Stock markets preparing for...   - De Financiële Telegraaf
1989-10-16   Situation not comparable to the stock market crash in 1987 but… - De Financiële Telegraaf
1989-10-17   Wall Street recovers from blow  - De Financiële Telegraaf
1990-11-01   Koornwinder: technical analysis fighting against disbelief  - Het Financieele Dagblad
1991-02-07   Providing a better grip on the situation - Trends
1991-03 - -   Technical analysis - Chart Guidance in uncertain times  - NCVB
1991-11-19   Technical Analysts on USA: don’t panic  - Het Financieele Dagblad
1992-04 - -    Numerous answers possible to what private investors should do, but… - Beursplein 5
1992-04-23   The European Garzarelli - Trends
1992-04-23   Like a Railway Guide - Trends
1993-01 - -    Hunt for the promising stock - Arts & Auto
1993-01 - -    Be alert to bearish breakthrough - Money
1993-03 - -    Trend-watcher Koornwinder wants to rid technical analysis of its...... - Beleggers Belangen
1993-03 - -    Facts refute negative image - EFFECT
1993-04-24   Stock of Japanese companies as economic barometer - Het Financieele Dagblad
1993-06-18   Active management certainly has a future - Beleggers Belangen
1993-08-21   ’Knowledge Explosion’ - Beursplein
1993-09-09   Against the Current - Trends
1993-10-09   New fund for technical analysts in the pipeline  - Het Financieele Dagblad
1993-11-21   For investors and companies - Metternich’s Weekbulletin
1993-12-02   Select to win - Trends
1994-01-21   Protect Stock Positions - Beleggers Belangen
1994-03-25   Koornwinder: Take the profits  - Beleggers Belangen
1994-07-01   Koornwinder issued timely warning  - Beleggers Belangen
1994-11-18   Technical analysis warranty accountant versus the non-believers - Het Financieele Dagblad
1994-11-18   Day of the stock - Het Financieele Dagblad
1994-12-17   ’Investment of public money generates too little return’ - Brabants Dagblad
1994-12-17   Daring prognoses often spot on - Eindhovens Dagblad
1995-01 - -   Spotlight on Women and Technology - Brochure Kijk op vrouwen en techniek
1995-01-10   ‘Invisible’ economy casts its shadow forward - Eindhovens Dagblad
1995-02-25   Innovation investment models required - Eindhovens Dagblad
1995-03-12   Self-made stock market guru has solution for pensions - Arnhemse Courant
1995-05-15   „Stocktendo” Era - Trends – Cash!
1995-06-10   New Research Method tracks down Market Trends - Beursplus
1995-06-12   Lesson for pension giants - Utrechts Nieuwsblad
1995-06 - -    Dutch Stock Market Guru does know how to outperform the market  - De Volkskrant
1995-06-15   En route pour le XXIe siècle – Cash!
1995-10 - -    KGMN makes active investing possible - Management Info
1995-10-20   A splendid outperformance - Management Team
1995-11-09   Investment night Rabobank huge success  - Soester Courant
1995-11-10   Herma Koornwinder, a Dutch guru - Beleggers Belangen
1995-11 - -    Interview with Mrs Herma Koornwinder, Dutch Stock Market Guru - Fisc Alert
1995-12-29   The zapping investor is emerging  - Algemeen Dagblad
1996 - - - -    ’Investor needs to be much more assertive' - GPD
1996-01 - -    Herma Koornwinder, a Cassandra in a digital world?  - Zonta
1996-01-26   'The investment industry needs to change’ - Beleggers Belangen
1996-02-01   Investing: intuition or institution?  - Pecunia Forum en Magazine
1996-02-20   Maverick KGMN partners up with securities firm Stroeve - Het Financieele Dagblad
1996-03 - -    Market undercurrents: the key to good results - Beursplein 5
1996-02-03   The ‘Happening’ signals the beginning of spring - De Tijd (Belgium)
1996-03 - -    Rabobank Groningen and Environs provides insight into investments - Own edition Rabobank
1996-03-09   Koornwinder takes first step towards investment fund - Eindhovens Dagblad
1996-03-13   Spreading of portfolio does not reduce risc at all  - De Tijd (Belgium)
1996-03-19   Flemish investors remain unsatisfied at VFB-happening - De Tijd (Belgium)
1996-05-25   Mrs Koornwinder keeps scoring  - Beleggers Belangen
1996-07-26   Dutch Garzarelli avoids drop in rates  - Het Financieele Dagblad
1996-07-26   The financial seer of Beursplein 5 - Leidsch Dagblad
1996-08 - -   ‘Self-made’ stock-market guru predicted depression again - Diverse ANP dagbladen
1996-09-07   ‘Bear' Market cannot be predicted - Beursplein 5
1996-09-14   Investment business is, just as in nature, subject to seasonal changes - Beursplein 5
1996-10 - -    I am generating a significantly higher percentage of profit than the market - Elan
1996-10-11   The dissident vision of Herma Koornwinder  - Intermediair
1996-11-02   Quivering on the stock market  - Elsevier
1996-12 - -    Herma Koornwinder: Old stock-market wisdom is obsolete - GPD dagbladen
1996-12 - -    How well is Herma Koornwinder performing?  - Cash
1996-12-27   Computers have quickly caught up with time-honoured......  - Leeuwarder Courant
1997-02-19   Professionals await their buying moment - De Gelderlander
1997-03 - -    Investment signals - Perspekt (ABN AMRO)
1997-04-26   A fund according to the Koornwinder system  - fem
1997-05 - -    Securities firm Stroeve cancels Koornwinder programme - Financiële Telegraaf
1997-06 - -    For sale, an (almost) infallible system!  - Elan
1997-06-07   Guru for sale - Elsevier
1997-07-26   True stock market experts? - Elsevier
1997-07-26   Stock market gurus divided about stock hype - Leeuwarder Courant
1997-07-26   Stock market gurus witness continual growth - Gelders Dagblad
1997-07-26   The big gamble turns out wrong  - Elsevier
1997-12 - -   ‘Investing too risky for individuals’ - Opzij
1999 - - - -    Outdated knowledge equals impotence  - S@fe (Robeco)
1999-12-21   Stock Market Gurus  - Carp
1999-12-22   Waiting for the Nintendo generation - Dagblad Rivierenland
1999-12-24   We are going to get a Flash Economy - De Gooi- en Eemlander
1999-12-31   Investor of the 21st century is an e-trader - Dagblad Zaanstreek
2002-07-26   Small investor holds his breath  - Eindhovens Dagblad
2003-08-01   Index portfolio - Het Financieele Dagblad
2003-08-01   Investing on the crest of a wave  - Het Financieele Dagblad
2003-08-18   Shareholders unable to play crucial part - Het Financieele Dagblad
2007-10-20   The deciphered Future  - Eindhovens Dagblad





Anouk is hooked

1987-06-15, NRC Handelsblad

[NOTE: In this article, Herma has taken the pseudonym of Anouk Kok]

By A.L. Hiele

Anouk Kok, from Bilthoven, married to a manufacturer of exclusive ties, housewife and mother of three teenagers between 15 and 20. In principle, routine work that can be managed easily if you are able to organize yourself. Together with other women in the same boat, she organized her time around bridge, tennis, horseback riding and, every now and then, some golf.

     She went fully for it, followed courses, bought books, contacted experts, and rose early to take to the tennis courts with a basket of tennis balls. Such an approach leads to something. After a while you are ahead of the others, which they, in turn, do not like very much. But there was something else, she adds: ‘While playing tennis with my friend we casually came to talk about the price of an investment fund that had suddenly shot up. We both arrived at the same conclusion, that this was fantastic, yet playing tennis was not the way to earn money. Why not deal with shares?’

      So the two friends went on to study economics – amid all the young people. In the meantime, Anouk had joined an investment club, and again she became 100% involved. For months, she was reading all the financial weekly and daily newspapers without being able to make sense of the avalanche of words. In the middle of last year, she attended a course on the theory of technical analysis, a method for analysing figures in the development of share prices and returns, products, currencies and retirement funds, based on which, predictions about future price developments are made.

      After this course, Anouk was captivated/hooked by market analysis. Immediately after the first course came a second, organized by a foreign institute. ‘During the course we were taught methods for the analysis of quantities, which I find fascinating,’ she said. ‘I shall very shortly follow another seminar on this subject in London.’ In this respect, Mrs Kok is not an exception in the Dutch world of investments. However, she is, in fact, part of a very small group of students who work with information that they collect to make graphs and subsequently analyse in order to get results. In the beginning, she filled many pages with all sorts of funds – but this could not be kept up in the long run.

      A short while ago, the situation improved greatly. Speedy Sörensen, one of her fellow students, was in possession of a powerful PC with a printer and, with combined dedication, technical knowledge of equipment and the required computer software, a unique and near-professional partnership was ready to face heavy winds on a daily basis. Once the computer was being used for daily activities, the operation had to be moved from the table in the living room to the bedroom of the oldest son. Posters of Madonna and the SCHC hockey club were exchanged for computer graphs of Unilever, Akzo, Koninklijke Olie and several other stock indices, among which were also those in the US. Interested visitors were given a guided tour with expert explanations. Yet the ladies were not entirely satisfied, which resulted in existing price and news facilities being extended by a TV set with teletext and a subscription to a financial database. By telephone and a modem, prices and returns from the Amsterdam stock exchange were downloaded to the computers.

      And how are husband Lex and the children? Lex is rather impressed by his wife’s activities but he remains the entrepreneur. He asks himself impatiently when they will finally do the real thing and invest and earn some money. His wife keeps her cool and answers calmly and imperturbably: ‘First I have to study and understand the whole subject, then I apply my knowledge and put my predictions to the test for some time to see how they compare with the actual situation. I occasionally deal with some options, although that is not going so well.* I shall have to watch the kind of developments and influences stock prices typically are subjected to before I can translate this into an appropriate strategy. In a few weeks’ time we shall go on holiday to a thinly populated island off the French coast. I shall take with me the material of the course on options that I followed a short while ago. After the holiday I can try out some more things.’

      We conclude with one of her predictions: almost all indicators of the American stock market show an upward breakthrough of the stock price.

19870615



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Head and Shoulders

1987-12-12, NRC Handelsblad

By A.L. Hiele

Since late last century, a number of methods for the analysis of price developments on the financial markets have been developed in the United States. All these methods were limited to indices, stock prices and returns from stock trading, futures, currency and interest business, whereby graphically summarized historical data were used for predictions of future developments with a maximum variation of 10 to 15 percent.

     Technical market analysts using this method thus work with the assumption that historical patterns will always repeat themselves with a certain regularity, the reason being that stock prices are determined by investors’ fear and greed. Famous examples of such indicators towards success are head and shoulder formations and symmetrical triangles.

     Yet not everyone uses this approach. Fundamental analysts have a much broader view on the price of a particular share, for instance. They collect all data that might have an influence on the results and future expectations of a company, on which they base their judgment of a particular share price being either too high, too low or just right. However, reality shows that these conclusions are not always in line with reality. Looking at the share prices of ABN AMRO, Aegon, Akzo, Amro, Hoogovens, Philips and other funds, we notice that they are lower than the assets per share.

     It is not rare to see investment analysts working with both methods. Good funds are filtered by fundamental analysis whilst technical analysis gives an indication of the right moment for either buy or sell. There are also investors and traders who do not believe in either of these two methods. They feel that stock prices are hard to predict, the price crash of October 19th being a good example. One could say they work according to the principle, “the analyst proposes but the market disposes”.

     The interest in technical analysis has been strongly growing among private investors in recent years. This was stimulated by the increasingly accessible prices of personal computers and computer programmes for market analysis as well as the generation of stock price databases such as Stockdata, Call and Tijl, specifically for this kind of investor.

     Herma Koornwinder is a remarkably active analyst from Heeze, a small place near Eindhoven. Since early 1986 she has been analyzing the freakish nature of the stock exchanges in Amsterdam, the United States and Germany, without any sponsors, like an unpaid top sportsman. Serious analysts do not do that kind of work after dinner at the end of the kitchen table on a piece of squared paper. To date, Mrs Koornwinder has followed five different courses in Belgium and the Netherlands and, by working through some 15 mostly foreign books about her hobby; she is preparing herself for some new demanding training in London and San Francisco.

     Her eldest daughter’s bedroom has been converted into some sort of pattern-detecting centre with a good, strong personal computer and a telephone connection to the database of Stockdata, a printer and a TV set with teletext. Together with some equally dedicated and enthusiastic co-analysts, she uses this as a retreat to work for many hours every day. So far, the results of this intensive study could not have been turned into hard cash because Herma first wanted to master the rules of the game, in other words, she does not make investments herself.

     In the period leading up to October 19th, Black Monday, she made insistent phone calls to professional analysts explaining her concerns about the stock markets as all indicators were just a little too negative, yet these analysts were mostly happy and optimistic. Their reaction: disbelief, amazement, but also an offer to work with one of them. Just like other analysts, she sees a downward trend on all major stock markets, without any indication of how long this might go on. Yet, despite this, funds such as Koninklijke Olie and Unilever are setting up a reversed head and shoulder fund. If this is completed with strong returns and share prices going up, the stock market will rise.



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The Hallelujah effect

1988, Mees Bulletin

By Wertheim Salomonson

1.  The Hallelujah effect: everyone can always tell you, almost exactly to the date, (which can hardly be called a service in hindsight) that we have passed the low. However, you hardly ever hear the unequivocal announcement of a recession, a depression, a bear market or a crash. A welcome exception to this sad rule is established by Mrs Koornwinder, the interviewee in this section, as well as by Elaine Garzarelli, whom she quotes in it: in light of point 4 of the psychological aspects mentioned in attachment 1, the ladies deserve our deepest respect for their insight and courage to testify thereon in all sincerity. In this context, the question arises why it are often women that come to these conclusions. The answer possibly lies in the fact that women in particular, possess that kind of intuitive intelligence, which enables them to get through to the core of those realities. After all, this profession is a combination of applied math and psychology.

4.  The technical analysis fulfils its most important function on those moments when the chart image leads to an entirely different opinion with regard to the object than the one based on the common fundamental opinion. It will have to express an opinion that opposes the established opinion and with that the establishment. By doing that, it invokes the misunderstanding, but often also the envy, of that establishment. This applies in particular if it is unfortunate enough to be correct.

HK: This text was sent to me by Mr H. Wertheim Salomonson.
It concerns a couple of snippets from an article he published.



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Professional analysts too commercial

1988-04-02, De Financiële Telegraaf

By Dick Hussaarts

AMSTERDAM, Saturday


Technical analysis, the use of graphs in the assessment of investments can be a very good instrument. However, this only applies if you use it well, and not half-heartedly. If you do it well, even an amateur can achieve great results. This was proved by Mrs. Herma Koornwinder, who was one of few to predict the stock market crash of October last year.


      
“A common mistake is that analysts focus too much on graphs that only concern equity price developments, which easily gives them the wrong idea. You need to pay attention in particular to the development of the turnover at the stock market, the moving average of the price earnings ratios and you need to take into account the fact that a market is oversold or overbought,” says Mrs Koornwinder

19880402
Mrs Koornwinder: “You need to pay attention to the development of the turnover at the stock market”
     Two years ago, the amateur investment analyst started keeping track of graphs. Soon, she became so excited that it had an impact on virtually every part of her day. In the morning at 7, the day starts with breakfast, while reading the financial pages. “Then I switch to something I call my fifth gear to do what needs to be done in the house, and at 8:30 AM I head to my study room. To make sure I’m not losing any second, I bring along my lunch and I call it quits, and that five days a week, while Saturdays and Sundays are partly used to finish things that I didn’t get around to.

      As a result of this fanatic approach of the technical analysis, Mrs. Koornwinder discovered some unusual contradictions in September of last year. “Last year September everyone was very optimistic. They were writing the stock market to great heights. But in my graphs I saw an increasing amount of negative signals emerge, day after day. So”, Herma Koornwinder continues, “I started contacting analysts at banks. The only thing they were curious about was who I thought I was, and what would have to be fundamentally changed to invoke such a dramatic event.

 
      Even on that specific Black Monday I called a technical analyst. I told him than an important head and shoulders formation had been broken, which is extremely negative. He didn’t really sense that negativity but later that day, it hit hard and heavy.”
But how is this possible? How is it possible that well-paid technical analysts at the banks miss things that Mrs. Koornwinder does not miss, based on virtually the same analysis, and that they discard an emergency signal when the facts are pointed out to them?

     Commercial

     “Banks and other investment institutions consider the technical analysis to be a sideline activity. The commercial activities get a much higher priority. As a result of this, too little attention is paid to the technical analysis. If you want to do it right, you need to spend a large amount of time on it. It is a full time job that doesn’t allow for anything to be done on the side,” says Herma Koornwinder, who is mainly specialised in tracking the long-term developments. She does not just track the Amsterdam stock market, but also the option market and the big foreign stock markets, such as Wall Street, Tokyo, and as of recently, even Hong Kong.

     This is why Herma Koornwinder is not really surprised about the fact that so many people were wrong. “In 1987 Elaine Garzarelli was analyst at the American broker Shearson. “She became increasingly negative as well prior to the stock market crash, and just before the crash 92 percent of the indicators she tracked, was negative, which indicated a considerable drop in price earnings ratio, just like with my graphs.”

     Appreciation

      Gradually, Mrs Koornwinder is given the appreciation she deserves by the professionals. A hobby that was the result of a long treasured desire – she took up a study in economy when the kids grew more and more independent, as a result of which she got in touch with technical analysis – can hardly be called a hobby any more. “Up until now, I have hardly commercialised my activities. First, I needed to be certain that my work hadn’t accidentally led to a good result once, but that I was really on to something. For some time now, I know for certain that I’m correct on the long term” says Herma Koornwinder.

      As of recently, she is making money off of her hobby, simply because it costs her a lot of money. “It simply became too expensive to continue this way, without making any money. And I’m not just talking about the equipment that I’m using and all the paper, but I’m travelling all around the world to attend congresses related to this subject. And those seminars aren’t exclusively close to home. London is not unusual and soon I’ll be attending a seminar in San Francisco”

     Mrs Koornwinder does not want to work as an advisor of small investors or start publishing an investment magazine. “That does not make any sense, since you need to invest a lot of time in writing articles and answering investor’s questions, which means that I would be making the same mistakes as many professional analysts. I work for large pension funds for instance. The advantage of my way of working is that I am able to immediately notify my customers by telefax as soon as I notice an important development.




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Technical analyst Koornwinder: Stock markets preparing for significant increases

1989-09-23, De Financiële Telegraaf

By Dick Hussaarts

HEEZE, Saturday

Although the international stock markets have been consolidating lately (in particular Wall Street, London, Zürich, Madrid and Singapore) after the bullish trend in prices of the past year, the technical analysis clearly indicates that those stock markets are preparing for a significant leap forward. Paris, Frankfurt and Vienna are still in a bullish trend and Tokyo is developing positively after a short breather.

      This is the opinion of Mrs. Herma Koornwinder, who performed this profession as a hobby for years and who is currently working exclusively for the European capital manager Bearbull (which includes an establishment in the Netherlands). “The first rate target for the Dow Jones is 3140, but I believe a rate of 3300 very realistic for this index. The index has already broken through the resistance level of 2746.65 once and is now preparing for a significant leap forward. Currently, strengths are being gathered and the stock market is bending through its knees so to speak, but that is a normal pattern.

      According to the technical analysis, the index first has to exceed that level of 2746.65 twice with its lowest day rates, and then the rates can break free.” Mrs. Koornwinder says.
“Up until now, the Dow Jones has reached a maximum level of 2768.20 at the conclusion of a trade day. I’m expecting that the Dow Jones will fluctuate between a rate of 2620 and 2760, before the breakthrough is realized.”

      Herma Koornwinder is also very positive with regard to the Amsterdam stock market. “If you look at the course of the EOE-index, you’ll find that it has tried to break free from the long-term resistance channel eight times. That takes effort but it will happen,” is the expectation of Mrs. Koornwinder. “However, it takes a lot of force, which is always accompanied by strong results, both upward and downward.” She currently sees room for an increase to 333 (currently about 320) according to pattern forming in one of the indicators and if the index breaks free from the price channel, she believes a rate target of 370 possible.

      The interest seems to have moved past its largest increase. “Some short-term indicators show attenuation. I’m not entirely sure about the long-term. A solid support was built up, that is currently in the way of a big decrease, but when that support drops, the decrease will continue.” Herma Koornwinder is very optimistic with regard to the dollar on the long-term. “Since January 1988, the American currency has been fluctuating in a bullish price channel. For the short-term, the resistance level is ƒ22.2610, whereas an important support point is at ƒ2.12. Given the development of a number of patterns that indicate strength, I have a positive attitude towards the dollar. Initially, my rate target is at ƒ2.37.”

      Having such a strong opinion is not always easy, in particular if you do not have public opinion on your side. “For instance, I warned at the start of 1988 that all signs indicated that the price-earnings ratio would go up, whereas most investors were very negative. Way back when, the same applied when I warned of a major downturn, long before the stock market crash occurred. In fact, I kept warning until a day before the crash: be careful, this has to go wrong at some point. Because a crash like that, doesn’t just happen in a day. You can see the indicators become increasingly negative, long before that. At the beginning of January of this year, I predicted more or less the opposite situation, meaning in the positive sense: we are already halfway past my rate target.”

      Many people still compare technical analysis to looking into a crystal ball. “This will probably never change, since many technical analysts are also involved in other forms of analysis or are investment analysts at the same time. I believe the only way to successfully perform this job, is to be involved in it continuously. You need to keep feeling with the graphs and assess them objectively without emotion. And not just rate graphs, but you also need to review turnovers and whether or not everyone is fully invested or has a lot of liquidity etc”.

 



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Situation not comparable to the stock market crash in 1987 but…
investors tense after downturn on Wall Street

1989-10-16, De Financiële Telegraaf

Door Adriaan Janszen en Dick Hussaarts

AMSTERDAM, Monday

The downturn on the American stock market on Wall Street last Friday has led to some heated meetings in the stock market industry. The general expectation was that stock markets in the Far East and those in Europe would respond to the downturn in New York with very low rates. However, the question that kept everyone occupied was: to what extent will the downturn of 6.8 percent in New York be mimicked?

19890923       A first indication was expected last night from the stock markets in the Far East. In order to be able to cope with the many phone calls of worried (individual) investors, many brokers made sure that their staff could be reached last weekend.

      “With the experience of the stock market crash of two years ago, everything is possible this week. We are prepared for the worst, which is why we opened our doors as early as Monday morning 7am to assist investors,” said Michael Toorop, of Prudential Bache in Amsterdam.


19890923      A significant number of individual investors were expected to offer their shares. It was they who were dealt the greatest blows when the Dow Jones dropped over 500 points during the stock market crash two years ago.  That is why bankers and investment analysts made every effort last weekend to prevent panic sales. Everybody was saying that the current situation was not to be compared to that of October 1987. It was pointed out that many rates had risen to new records over the past two years, but that this was accompanied by significant higher profit numbers of the companies involved. The price/earnings ratios are at a much more realistic level because of that. In addition, there is no strong increase in American interest rates, which translates into significantly lower bond rates, as was the case in 1987.

19890923      A lot will depend on the response of institutional investors such as pension funds and insurance companies. However, these observe a downturn such as last Friday’s with much more emotional distance than for the individual, who is immediately affected financially by the rate fluctuations. If their analyses indeed confirm the comforting statements of the bankers, it is expected that they will operate on the buying side sooner, to be able to benefit from the significantly lower rates. Their liquidity is no impediment to that, as this is, at the moment, in general ample.


      For further developments on the Amsterdam stock exchange, it is important that the option contracts expire at the end of this week, which could lead to additional pressure on the rates. It is obvious that Wall Street will lose some more during the first hour of trading; however, the course of affairs after that is of the essence. Will the stock market be stuck in its low rates or will everyone crash right through the floor, just like two years ago, with the ‘aid’ of the computer controlled software. The downturn of the first hour will mainly be the result of the fact that the trade in a number of funds was frozen last Friday, meaning that a number of sell orders still need to be processed.

     In addition, investors who have seriously burdened their stocks will have to get rid of them: their financers will demand more valuable collateral. Since they cannot provide that collateral, they need to sell their stocks. Plus, several investors will try to be one step ahead of a second blow, by selling early. Technical analysts observe 2400 as a point of support for the Dow Jones index, according to Michael Toorop. However, others, such as technical analyst Herma Koornwinder, see opportunities for trying even lower points of support.

     Whether or not the stock market will bounce back during the further course of the day also depends on the strength of the bargain hunters and any signals coming from the Federal Reserve. Last Friday, the Fed. Tightened the market, but it may take measures this week to expand it, in order to prevent panic, as shown by the following article. Technical analyst Herma Koornwinder sees no grounds whatsoever in the events of last Friday to review her long-term vision for Wall Street: “I am still very optimistic,” she said. “However, upward movements are always accompanied by fluctuations, although I have to admit that I didn’t expect a fluctuation this strong.”

19890923 - 04

 














During the stock market crash of October 19th 1987, many rushed to Wall Street, which became a tourist attraction in the days that followed.





     Based on her analysis, it appears that last Friday, the Dow Jones  index instantly fell down to the old support line, all the way from the amount above the price channel formed as of November 1987, which rose to 2800 in June. In addition, there is a second support line on that level, which was formed one year ago. “That could also indicate that we are dealing with an unexpected strong movement, which can be compared to the sudden storms that emerge on the IJsselmeer, during beautiful summer days,” she said. A similar unexpected downturn also occurred on the Amsterdam stock market in May of this year, when the Lubbers administration threatened to collapse, after which the downturn turned out to be temporary in nature. However, when the rates fall back to the old price channel, a drop of 2430 or even 2300 in the technical support points should be taken into account, according to Koornwinder.

      Herma Koornwinder expects, also given the weak situation of Wall Street last Friday, a weak day on the Amsterdam stock market. “I have been negative towards the Amsterdam stock market ever since September. On August 28, the EOE-index (which closed on 309.80 last Friday), dropped past a support line, which started to act as resistance afterwards. If the price of the index breaks through the neckline of a short-term, downward oriented head and shoulder formation (311), then 301.67 provides a 3% confirmation with 285% as the rate target. ”For that matter, she pointed out yesterday that the downturn of last Friday cannot be compared, from a technical analysis point of view, to the stock market crash of  two years ago, since back then there were all sorts of indications of an imminent major downturn that were predicted by her as well. Last Friday, that was clearly not the case.

      One of the causes of the downturn of last Friday was the increase of 0.9% of the producer price index. The cause was the strong, seasonal increase of the energy prices. The same reason will lead to a 0.6% increase of the main inflation indicator, the consumer price index, next Thursday, in comparison to no changes in the month of August. In addition, the trade balance figure will be disappointing tomorrow. Because of decreasing exports this is expected to be $9.3 billion, as compared to $7.6 billion last month.

     In Washington, there will be a meeting today to complete the budget for 1990. If that does not happen, which was the expectation, the so-called Gramm Rudman Law will be invoked. This law will automatically grant discounts on the Federal expenses. Maybe the downturn in New York, will lead to political miracles in Washington today.



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Wall Street recovers from blow

1989-10-17, De Financiële Telegraaf

NEW YORK, Tuesday

A sigh of relief everywhere: the Dow Jones index did not collapse any further. However, the American stock exchange had a weak opening. Therefore, the fear hit again when the Dow Jones index displayed a loss of 64 points a little over half an hour after the opening. But it did not take long for the positivity to return. At 11.30am, local time, the Dow managed to recover from the loss and, thanks to a final kick, partly achieved by computer controlled buying programs, a closing rate of 88.12 points profit was achieved, at 2675.38.

      The stock turnover rose to great heights yesterday. More than 419 million stocks got a new owner. Notable, however, was that the number of losers remained bigger than the number of winners, despite the big profit for the index. The good chips in particular were bought by bargain hunters, among which were mainly the institutional investors who used their large cash accounts to buy back the same stocks (at a much lower rate) that they sold earlier on Friday to secure previously achieved profit. The bond prices that were very stable past Friday suffered a relapse and lost all their earnings.

      One of the first experts who dared to express her prediction was Elaine Garzarelli of Shearson Lehman Brothers. Back then, she and the Dutch Herma Koornwinder were the only ones who saw Black Monday coming. Now, she stated that the equity prices would climb to 3.175 points within several months, if nothing unusual happened to the interest rates. Reassuring signals were even coming from the White House: “I’m not worried,” President Bush told reporters. The bankers believed that the major downturn of last Friday might in fact have been a “blessing in disguise”. They hoped that, because of this, the banks would be more careful in the future with regard to company acquisitions financed with major debts, the so-called leveraged buyouts.

HK: The rest of the article is missing.



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Koornwinder: technical analysis fighting against disbelief

1990-11-01, Het Financieele Dagblad

By E.J. van der Meer

Abracadabra, or, at best, something that looks like a cardiogram. Mrs. Herma M.C. Koornwinder of Koornwinder Chart Guidance in Heeze admits that this was also her first response when she first saw technical analysis, the art of predicting trend developments, based on rate graphs and their patterns.

      ‘The psychology of the investment mass is shifting permanently from pessimism to optimism and back, in a natural rhythmic order’ is her conclusion after having struggled for years with figures and graphs on rates and stock indexes. Capturing recurring regularities in the rates from the past, in price channels, bandwidths, indicators and, entry and exit levels. As with many disciplines, the technical analysis is full of jargon. That combined with the technical analyst’s basic assumption that future trends can be read from the patterns in graphs about the past, technical analysis is compared to looking into a crystal ball by passers-by. However, Koornwinder Chart Guidance is no carnival attraction.

      Mrs. Koornwinder can imagine why a lot of people associate technical analysis with looking into a crystal ball or with astrology. She felt the same way, several years ago. She believes that it is inextricably connected to the subject. After several hours of explanation about technical analysis, she urges the reporters at their departure to refrain from turning this into a crystal ball kind of article. Agreed, although… The purely technical analysis she performs is facing a lot of distrust, disbelief or raised eyebrows at the least. Slowly, she is starting to receive some acknowledgement. Contractually, she is now providing three large institutional investors (she will not mention any names) with her trend advice, based on technical analysis. However, the battle for acknowledgement has not yet been fought.

      Experts, who are trying to predict international developments on the financial and capital markets, are roughly divided into two camps: fundamentalists and technical analysts. The difference: the fundamentalist looks for the ‘why’ whereas the technical analyst looks for the ‘when’. Fundamentalists try to grasp how and why today’s financial economic situation has come into existence, based on certain macro- and microeconomic theories, also taking into account the interest development, currency ratio, surplus/deficit in the trade balance and balance of payments, etc. They also monitor the performance of stock market listed companies, meaning cash flow, profit and loss prognoses, balance ratios, the management, the market situation etc.

      The fundamentalist tries to see behind the scenes of the economic and financial reality to predict what will happen during the next scene, whereas the technical analysts, the purists among them at least, among which Mrs. Koornwinder counts herself, deliberately ignore this reality. Technical analysts have their own reality: that of data, figures and their patterns, and the trends that arise for the future based on that. When analysing, Mrs. Koornwinder focuses on the medium and long term and uses an integrated model of different, independent methods of analysis.

      Technical analysts retrieve series of rate graphs, in particular of stock market indexes, from their computers, study these, draw lines past and around the patterns towards the future and predict the support and resistance levels to be expected partly based on that. Then they need to predict whether or not the rates will remain within these levels or will break free from them. And when they break free, which new support and resistance levels will emerge then? All of this with use of self-developed indicators, which need to remain inside the cabinet of secret recipes, as far as Mrs. Koornwinder is concerned.

      In short: for technical analysts, the fundamental reality is hidden in the graphs and the figures behind those and not in an analysis of that reality itself. Concrete example: the fundamentalist tries to explicitly review the current Gulf crisis from the inside and the outside and concludes, very roughly summarised: higher oil prices, higher inflation, less economic growth, less corporate performance, lower rates. The purists among the technical analysts ignore this Gulf crisis and assume that its consequences will implicitly be reflected in new patterns, in the figures and the graphic depictions thereof.

     Helicopter

     The technical analysts are at an advantage in at least one aspect. They can use a helicopter perspective. Working with figure patterns and indicators is generally the same for all markets. Therefore, they can support a very wide vision. They are truly all-round. The fundamentalist struggles with the very complex questions about the reasons and the background of what is happening. The extensive reality forces them to specialise. Therefore, they are not all-round, but specialised.

19901101 


Mrs. Koornwinder of Koornwinder Chart Guidance behind the instruments of a technical analyst: the computer, the graphs and the straight en curved rulers.

 

 


      But with regard to a different aspect, the technical analysts are at a disadvantage. Usually, Koornwinder’s analysis is so far ahead, that it is often met by a wall of disbelief. For instance when the fundamentalists – who still are the large majority – assume that the financial markets will keep rising and they are able to substantiate their assumption. If the indicators of the technical analyst point in the same direction, there is no problem. However, if the technical analyst receives signals that the rates will drop sometime soon, contrary to popular belief, it is often hard to be taken seriously by the outside world, because the pure technical analyst will have an explanation that will seem unlikely at that point. Koornwinder: “If my main indicators point downwards in such a situation, I don’t spend a second wondering why.”

      Technical analysis is used relatively often. However, few people are as reliable as Mrs. Koornwinder. Even fundamentalists will use graphs from time to time, but mostly to find extra confirmation for a vision they already support. Similarly, there are technical analysts, who, once they think they have properly interpreted their signals and indicators, also try to interpret them along fundamentalist lines. So in other words, they will start looking for the why after all. Koornwinder keeps the two carefully separated. Questions about the fundamental ‘why’ – in fact the basis of every science, she admits – is something she does not involve herself in. In her opinion, there is no technical analyst in the Netherlands who is as strict as she is.

      For a second, she causes confusion by admitting that, in her analysis, she sometimes includes matters such as the development of interest, the inflation, the dollar rate, the prices of Brent oil, the gold rate etc. Because are not those the matters that the fundamentalist includes to substantiate his vision on the why and how further? Yes they are, but the difference is that she subjects each factor to a technical graph analysis. So then, the question, again, is not why interest is rising or dropping, but which picture is painted by the interest graph. And this brings us back to the purely technical analysis. The trend prediction is exclusively based on the study of graphs. Koornwinder: ‘I prefer analysing nameless graphs.’ Meaning, graphs that do not state which country or stock market index they concern.

     Fascination

     Purely coincidentally Mrs. Koornwinder got involved in the subject years ago, when she read a professional magazine about it, after which the supervisor of an investment study job pushed her in the direction of technical analysis. Initially it was a hobby to her, or more of a fascination even. In the beginning she drew her graphs by hand. Due to the increasing complexity, she had to involve the computer. It consumed all of her time, at the expense of social management positions and contacts with friends, who initially thought she had become ‘eccentric’ and who associated technical analysis with building bridges or something like that. Only now that Koornwinder Chart Guidance is starting to take off as a commercial company, partly thanks to business advice of engineer Geert H. M. van der Aalst (previously employed by Datastream), she has the time to take a stroll through the forest again.

      Before she became an entrepreneur with Koornwinder Chart Guidance, she was recruited by a former president of Shearson Lehman Hutton who moved to capital manager Bearbull, and worked under a contract for Bearbull Nederland for a year.

     Voted down

     Attracting companies for her company, established as of January 1st, is quite hard, partly due to the marketing approach Mrs. Koornwinder chose herself. Koornwinder focuses on large institutional investors in particular and those are not too eager to recruit her. She recalls an introduction she gave to the fund managers of a large Dutch investment body, invited thereto by the Investment president, who was very positive towards her. 'After a little over an hour, I was voted down unanimously. However, after having provided this body with her advice free of charge for several months, she is now working for it. Her contract does not allow her to mention the name.

      In May 1987 she expressed the outcome of her analysis for the first time. An exciting moment followed several months later: the major stock market crash of 1987. Koornwinder: “Prior to October, everyone was talking the stock markets towards record heights. However, my indicators started to trail behind, and even displayed negative crossings, which can be considered to be sell signals in itself. When that happened I contacted various international banks, commissionaires and other analysts to warn them and to start a discussion. The most unusual response back then was: “In order for the stock market to really collapse the way you’re saying, some kind of disaster needs to happen first”. She only ran into disbelief and was not taken seriously, in particular when she was asked what she did and where she worked. ‘Well, I was a stay-at-home mom back then, with an unusual interest. It wasn’t until much later that I learned to say that I was a technical analyst.’

      Less than a month later, the opposite happened. Just after the October crash, almost everyone was ‘bearish’, and thought that the rates would keep dropping. Maybe the big crisis of the thirties would repeat itself. But again, Mrs. Koornwinder explains, her technical indicators were completely opposite from the general trend, indicating that the rates would go up again. And again, she failed at sparking a discussion with her fundamental colleagues about her deviating vision. She also claims she predicted the mini October crash two years later, at least for the Dutch financial market and again, contrary to popular belief. In August of that year an acquaintance asked her about her opinion, and she mentioned that her indicators became weaker and that the exchange rates threatened to run into a heavy resistance level. The message was: mark time. And at the end of September she gave the advice ‘sell’ in a bulletin for interested parties, because the Dutch EOE stock index that was above 300 at that point would fall back to 240 in October. This was the case

     Jargon

     They seem like short, powerful messages: ‘mark time’ or ‘sell’. But they do not look that simple in the advising bulletins that Koornwinder Chart Guidance sends to interested parties. The recipients need to know, at the least, what her technical analyses are about. Otherwise, the bulletins will be very hard to understand. For instance a line from the bulletin in which the mini crash of October 1989 for the Dutch market was predicted: “If the exchange rate breaks through the neckline of a short-term, downward oriented head and shoulder formation (311), then 301.67 provides a 3% confirmation with 285% as the rate target.” The numbers stated therein, pertain to the Amsterdam EOE-stock index.

      Technical analysis, Mrs. Koornwinder tries to explain, is more than a – it sounds poetic – interplay of lines i.e. drawing lines along the extremes of a graph and labelling interfaces as support or resistance levels. Everyone can do that. And if everyone did, buying or sellling would be done en masse on exactly the same time, meaning that everyone would be too late. After those lines, it is time for the tricks of the trade: the indicators that display matters such as ‘sentiment’, volume, ‘open interest’ and ‘strength’. Strength? What is that? That turns out to concern a strictly personal estimate of Mrs. Koornwinder, an interpretation of a certain confluence in figure patterns and models. ‘Someone else may not be able to discover any strength at all in the graph. I have learned to sense that during my research over the years.’ So…some kind of hunch? ‘No, not really. One composes ones formulas based on a number of values. When those values break through a certain resistance at some point, there is room for additional increase’.

      Koornwinder Chart Guidance cannot issue a new advice on a daily basis. The nature of her technical analysis implies that the old advice applies until the figure patterns and indicators change in such a way that a new advice needs to be issued. Her last advice concerning the Dutch stock market dates back to the start of August, a so-called continuation sell. This indicates that she previously issued a sell advice and that the signals became increasingly negative in August. After that, the patterns have changed too little to announce a new change in trends.



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Providing a better grip on the situation
A secure footing in uncertain times

1991-02-07, Trends

Expert Speaking

Technical analysis

By Dirk Haesevoets

HEEZE

Investing: What is technical analysis and where should one place it?

Herma Koornwinder: Technical analysis is the art of studying graphs of the main money and capital markets to reach a reliable estimate of the actual situation, as well as a prediction for the future. With regard thereto, one assumes that graphical patterns that occurred in the past will repeat themselves in the future. After all, it has a lot to do with mass psychology and repeating developments which continually cause changes. When correctly interpreted, these developments can form a guide for the future. However, technical analysis is just one way of conducting investment analysis. For instance, there is also fundamental analysis that tries to predict the future based on economic magnitudes.

Is technical analysis complicated or does it just seem simple?

It is complicated as several theories have been developed and each has its particular strengths and weaknesses. This means that one theory might work well for a bullish market while it is systematically late or wrong in a bearish market. We have developed a model based on all these theories which mainly focuses on the (medium- and) long-term. It has already proven its reliability and is a perfect supplement for fundamental investors. After all, they still have to deal with their timing problem, despite the fact that their fundamental analysis might be perfect. Technical analysis indicates when you need to make a certain decision.

So, no contradiction between technical and fundamental analysis?

On the contrary, they complement each other perfectly. However, way too many investors are still looking through their fundamental glasses and focus just on one thing: outperforming the market, or in other words, not performing worse than the market(index). Technical analysis is able to improve these – mostly fundamentally oriented – results considerably by analysing them ´clinically´, in other words, by eliminating all fundamental emotions. This means simply sticking to the model. This is why we like anonymous graphs and indicators best. This enables us to assess the current position of a stock or index, and to derive the future development, without the desire to know if it concerns a company that is performing well or poorly. The latter is for the fundamental analyst to decide.

Which markets are you tracking?

As many as possible, because the correlations between the markets can have a strong impact on the predictive power and reliability of specific advice. In fact, the current financial world is one big system of communicating vessels, which we check daily for changes.

Which is probably the essence of your ‘Chart Guidance Principle’?

That is right. Technical analysis fulfils an important radar function that enables us – with the help of computer technology and databases – to track the developments on the global markets. For instance, we were issuing selling advice at the beginning of this year before there was a Gulf crisis. Even just before the major crash of 1987, we were issuing selling advice. In the current uncertain situation, in which the classic economic principles apparently no longer apply, technical analysis gets a better grip of the situation. It particularly helps with mastering emotional responses, because the reality is that visual perception is very important, and this is finally starting to sink in in financial circles.

      Moreover, after a while it appears that - for example - the newly obtained knowledge of support and resistance levels allows one to create a clear scenario. This is the main task of a technical analysis consultant: continuously indicating rise and drop probabilities, to cut losses and have profit continue. In other words, creating a crisply outlined plan that will be an integrated part of the system of the fund managers and guidance for possible crisis situations.

      The important thing is that, in a bearish trend, one should respond immediately to sell signals, since the law of gravity will accelerate the descent. On the other hand, one may sometimes miss the boat in an ascending market, since the buy signals emerge one after the other, meaning that hesitation is not fatal. Therefore it is necessary to review the (medium- and) long-term vision, and determine the support and resistance points as well as the rate targets and bandwidths every month. Even better would be to refresh these values every week, whereas active investors should do this on a daily basis.

19910207



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NCVB - Technical analysis - Chart guidance in uncertain times

1991-03, NCVB

In the weekly magazine TRENDS of February 7th 1991, we read an interview with, and an article about Mrs. Herma Koornwinder, president of Koornwinder Chart Guidance, an international consultancy specialized in TECHNICAL ANALYSIS. We will publish both publications one to one. For the NCVB, Mrs. Koornwinder reflected on TECHNICAL ANALYSIS in the Investment auditorium during the 12th day of the Stock/Investor market ’90.

What is technical analysis and where should one place it?

Technical analysis is the art of studying graphs of the main money and capital markets to reach a reliable estimate of the actual situation, as well as a prediction for the future. With regard to this, one assumes that graphical patterns that occurred in the past will repeat themselves in the future. After all, it has a lot to do with mass psychology and repeating developments that are continuously causing changes. When correctly interpreted, these developments can form a guide for the future. However, technical analysis is just one form of investment analysis. For instance, there is also a fundamental analysis that tries to predict the future based on economic magnitudes.

Is technical analysis complicated? Or does it just seem simple?

It is complicated since several theories have been developed that each have their strengths and weaknesses. This means that one theory may be working for a market on the rise, while it is systematically late or wrong in a descending market. We have developed a model based on all these theories, which is mainly focused on the medium term. It has already proven its reliability and is perfect as a complement for fundamental investors. After all, they still have to deal with their timing problem, despite the fact that their fundamental analysis may be perfect. Technical analysis indicates when you need to make a certain decision.

So, no contradiction between technical and fundamental analysis?

On the contrary, they are able to complement each other perfectly. However, way too many investors are still looking through their fundamental glasses and focus just on one thing: outperforming the market, or in other words, not performing worse than the market(index). Technical analysis is able to improve these – mostly fundamentally oriented results - considerably by simple clinical analysis. In other words, by disabling all fundamental emotions. This means simply sticking to the model. This is why we like anonymous graphs and indicators best. This enables us to assess the current position of a stock or index and to derive the future development without the desire to know if it concerns a company that is performing well or poorly. That last part is for the fundamental analyst to decide.

Which markets are you tracking?

As many markets as possible, since the markets have many mutual connections that can have a strong impact on the predictive power and reliability of an advice. In fact, the current financial world is one big system of communicating barrels, which we check daily for changes.

So maybe that is the core of your ‘chart guidance principle’?

That’s right. Technical analysis fulfills an important radar function that enables us – with the help of computer technology and databases – to track the developments on the global markets. For instance, we were issuing selling advice at the beginning of this year, when there was no Gulf crisis. Even just before the major crash of 1987, we were issuing selling advice.

      In the current uncertain situation, in which the classic economic principles apparently no longer apply, technical analysis provides you with a better grip on the situation. It particularly improves managing emotional responses because the reality is that visual perception is very important, which is now finally being understood in the financial world. Moreover, after a while it appears that the newly obtained knowledge with support and resistance levels allows the creation of a clear scenario, for instance. This is the main task of a technical analysis consultant: continuously indicating rise and drop probabilities, to cut losses and have profit continue. In other words, creating a crisply outlined plan that will be an integrated part of the system of the fund managers and which acts as guidance for possible crisis situations.

      The important thing is that, in a descending trend, one needs to have an alert response to sell signals, since the law of gravity will accelerate the descent. On the other hand, one could miss the boat in an ascending market, since the buy signals emerge one after the other, meaning that hesitation isn’t fatal. Therefore, it is necessary to review the (medium) long-term vision, determine the support and resistance points as well as the rate targets and bandwidths every month. Even better would be to refresh these values every week, whereas active investors should do that on a daily basis.



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Technical analysts on USA: Don’t panic

1991-11-19, Het Financieele Dagblad

 Technical analysts remain optimistic about the developments of the Dow Jones Index despite the Wall Street rate drop that occurred last Friday. They call it a ‘temporary effect’; there is ‘no reason for panic’.

      Last Friday’s 120-point drop has caused ‘no-sell signals’. According to technical analysts’ graphs, Wall Street remains in a consolidation phase. The Dow Jones Index has an important support point at 2840 points; it will be difficult to fall below that. Chairman of the Dutch Association of Technical Analysts, O Heijn, feels – based on Friday’s drop – that the movements on Wall Street are ‘in accordance with a bullish market’. According to Heijn, there was no ‘sell-off’ in the United States. He is of the opinion that the Dow Jones in the United States can grow even further. The major risks are to be found in the American bond market, because the interest and inflation could sharply increase. Be that is it may, he believes the inflation will continue to decrease in the long-term.

      Analyst H L M Hulsbergen, editor-in-chief of the periodical Elliott, deems the rate drop on Wall Street to be a ‘very temporary affair. It could all be behind us on Wednesday’. Hulsbergen (‘I have been expecting a rate drop for weeks’) anticipates an increase, after a possible decrease, of the Dow to 3250 points during the first half of 1992. Heijn shares this view. The stock exchange of Amsterdam will catch the same positive ride, thinks Hulsbergen, but those of Japan and Great Britain will suffer losses.

      Analyst H M C Koornwinder is of the opinion that the US Dow is pushing against a tough resistance which causes ‘erratic rate fluctuations. We find ourselves in an upward consolidation phase. Momentum is being gathered for an uphill run’. Contrary to Hulsbergen, she believes the world’s major stock exchanges will all move in the same direction.

      Technical analysis, which has assumed large proportions in recent years and has manifested itself in various movements, predicts future rates by studying historical movements. The analysts gather, among others, rates and turnovers, and place these in graphs, the so-called charts. The ‘purists’ among the analysts reach their predictions (the most probable movement) without taking fundamental factors into account.



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Numerous answers possible to what private investors should do, but…
one thing is clear: value of advices is extremely relative

1992-04, Beursplein 5

By Hans Amesz

What should a private investor do? This is a question Beursplein 5 has asked many an expert during the last year and a half. The answers were legion, but one thing was crystal clear: the value of advices in the investment world is extremely relative.

In his book ‘A Random Walk Down Wall Street’ Burton Malkiel suggests that a blindfolded monkey throwing darts at the stock page of a newspaper could compose a better stock portfolio than the highly trained, experienced and very well paid professionals who normally act as portfolio managers.

This statement has been put to the test since the end of January this year by business magazine The Wall Street Journal. Every month, four European investment consultants compete against a team of journalists throwing darts (for logistical reasons the magazine refrained from using actual monkeys). After six months, the results will be reviewed to establish who is the best.

This month, independent Swedish consultant Bjoern Bjoernson, Dutch Martin Verleg of GIM Algemeen Vermogensbeheer in Eindhoven, British Julian ……… of Van Meer James Capel in London and German Sy Schlüter of Credit Suisse First Boston in Frankfurt chose Astra (pharmaceutical company, Sweden), Atlas Copco (compressors and machinery, Sweden), Tesco (retailer, Great Britain) and BMW (cars, Germany) as being the most promising investments of the coming six months. The dartboard portfolio consisted of Carrefour (retailer, France), Internationale Nederlanden Groep (insurance company, The Netherlands), Nuovo Pignone (machinery and tools, Italy) and Refuge (insurance company, Great Britain). The six-month period for which investments were selected has not yet passed for any of the five groups. According to the Wall Street Journal, however, the experts have every reason to worry, as the monkeys have taken the lead in two of the five months.

Following the success stories of their neighbours, friends and family about investing, private investors have, especially in the Eighties, ventured on the investment path. Usually in the hope of gaining a fortune in a relatively short period of time. That hope was shattered by the stock market crisis of October 1987 and the mini-crash that followed exactly two years thereafter. The Gulf War also brings back bad investment memories to many a private investor. However, private investing is once again gaining ground, as the Amsterdam stock market chairman Mr B F Baron van Ittersum recently noticed. What does the average private investor do these days to select promising shares?

Dr R Th Wijmenga states in his book ‘Luchtkastelen en gouden bergen’ (Pies in the sky and Mountains of Gold) that this varies by investor. Some will simply base it on investment advice published in daily and weekly journals, while others might be looking for a system in the pattern of former rate fluctuations in order to correctly predict rate increases. And the financial world acts as accompanying orchestra: almost all banks and stockbrokers have research departments that formulate recommendations for the different funds: buy, ………, sell. Books and booklets about investing are published regularly. And although these usually do make mention of the risks of investing, they generally also, directly or indirectly, encourage the reader to start investing. Striking examples of huge profits in an incredibly short time are immensely appealing in that respect, according to Wijmenga.

As a consequence almost all private investors are looking for an investment strategy that systematically yields high returns. In scientific circles extensive research has been conducted on the profitability of such investment strategies. The extent to which these are able to achieve a surplus or extraordinary result has been reviewed. 

And guess what?

Wijmenga: ‘All research indicates the same thing: investors should consider the stock markets as being efficient when it comes to practical applications, i.e. that the so-called efficient market hypothesis – according to which all publicly available information is already incorporated in the rates – is valid. Therefore, no investment strategy exists that enables investors to systematically outperform ‘the market’, on the basis of aforementioned publicly available data. Fund selection and a creative buy and sell policy may, because of the higher transaction costs involved, yield even less return than simple buy and keep strategies.

After critical scientific analysis, technical analysis or chart reading, analysing the annual reports, following investment advices and investing in index funds, all turn out – fully in accordance with the fact that all available information has indeed been incorporated in the rates – to yield nothing more, and often even less, than a passive strategy.’

Why do institutional and private investors keep investing in stock? The answer is simple: because the dividend yield is attractive. The recognised fact, according to Wijmenga, that it is impossible to systematically outperform the market does, however, not mean that investing is unattractive.

In the past, the stock market has always had a higher return in the long term than other forms of investing such as urban and rural real estate, ……… ……… or savings books. A capital market ……… account or bond yielded even less.

The high return on stock market investments comes, however, at a price. ‘No free lunch’ as the Americans say.

The higher return comes with a higher risk. The variation in value of stocks is considerably greater than that of other forms of investment. The higher return in the long term is therefore more or less a reward for running a higher risk.

Stan Beckers, professor in investment management at the Vrije Universiteit in Amsterdam and CEO of Banca International, a firm that advises institutional investors in their investments, told Beursplein 5 last year: ‘It goes without saying that, in practice, the market is never perfectly efficient. There are regularities and irregularities: anomalies. In the Netherlands, for example, shares of smaller companies did better than those of bigger ones. Our research has shown that a portfolio composed of the twenty smallest companies at the Amsterdam stock exchange performed no less than seventeen times better than the collected indices of Statistics Netherlands. On average the difference was 4 to 5 percent. There are, therefore, ample possibilities to yield extra profit and there are always investors who have outperformed the market significantly.’ 

Dutch technical analyst Herma Koornwinder has made extraordinarily accurate predictions over the last couple of years. She foresaw the consequences the Gulf War would have on the financial markets and her prognoses about the Tokyo stock exchange were also spot on. Contrary to Wijmenga and Beckers, Koornwinder believes, just as the famous American analyst Elaine Garzarelli does, that investing is not an art, but definitely a science. What is her advice to the private investor?

Among other things: ‘Analyse globally. It is technically possible to overview the entire financial world and to gradually analyse the international indices, currency, interest, inflation, commodities, and so on, after which one can start focussing on interesting group indices and finally on shares. ……… when a fund has excellent annual figures, but the overall image of the group index is negative, the rate increase will be nil. 

In that case, there is, technically speaking, no room to go up. Are the correct figures incorporated in the rates? Is it sometimes ‘blowing a gale’, and sometimes not? The financial markets are full of solicited and unsolicited advice. Unfortunately such advice is rarely in agreement and, more often than not, fiercely contradictory. When asked, Herma Koornwinder states that her indicators have not turned red yet, i.e. no sell advice for shares is being given.




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The European Garzarelli
Beursplein

1992-04-23, Trends

Door D.H.

Our ‘Expert of the Week’ Herma Koornwinder gave her vision on the international markets once before, during the Gulf war past year. Several readers valued her smart analysis, as well as her clear and correct advice. And most importantly, they turned out to be completely correct.

      After having studied technical analysis for years, she started an intensive research that made it clear to her how the different financial theories perform in reality, under different circumstances. In addition, she gained insight into the interdependence that exists in the financial world. Based on that, she created an integrated model for the professional investor. This time, she gives her opinion on the stock markets of Tokyo, Wall Street and Frankfurt. Her own independent consultancy and research agency advises mainly institutional investors who are eagerly following her advice. Due to this, her advice is becoming increasingly important, because these institutional investors are a determining factor on today’s stock market.

      A lady with spunk, whom we will most definitely hear more of. It proves what we already wrote in “Beleggen” of March 26: He, who wants to beat women on the stock market, should get up earlier and earlier!



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Like a railway guide
Three scenarios for Tokyo

1992-04-23, Trends

Expert Speaking

Technical Analysis

By D.H.

INVESTING. In October 1987 you hit the mark with your prediction of an imminent crash. In 1990 you were right again when you predicted a collapse of the Japanese stock market.

HERMA KOORNWINDER. Indeed, in February 1990 I indicated a downturn of the Nikkei Dow Jones of 4000 points. After all, the bullish trend had lost its momentum and my indicators clearly indicated weakness on Kabuto-Chò. This indicated that a reversal mechanism got into stride. At that point, there was no Gulf crisis yet, let alone a Gulf war. When the descent ended, I issued new sell advice on a very regular basis. And at this moment, we are about 50% lower, almost exactly on the indicated rate target.

You try to gain knowledge of every market, to be some sort of ‘global player’. Why such an extended horizon?

It is important that one’s picture of the financial world is as perfect as possible. As of January this year, Tokyo dropped with 21% whereas Hong Kong rose with 18%. Even a number of European indexes were making some good progress, about 10%. So one should try to be present at the most attractive stock markets. In that case, one’s performance can be further improved by going with the right stock. While the Dow Jones rose with 4.6%, Goodyear made a profit of 34.25%, General motors 31.5%, Sears 25.1% and Disney 24.08%. Eastman Kodak however, dropped with 18.01%. In addition, it is very important to have your portfolio insured in advance, in case of stormy weather. There are excellent tools available to that end. If you have a portfolio in European stocks, you can protect these with options on the Eurotop-100-index in Amsterdam.

Is it not hard for the average investor to perform all these analyses if he is not using a systematic approach? For instance, you are working based on a systematic approach, but how do you translate that into concrete advice?

Market research showed that the majority of investors is not interested in lengthy descriptions of all kinds of technical developments, indicators etc. The questions that he does ask, however, are:

         1. What is the short- medium- and long-term trend?

         2. When should I enter and exit?

         3. Which percentage of increase or decrease should I expect?

         4. Does this concern a strong increase or decrease?

         5. Can you summarize your vision in a few lines?

       Those are the exact questions we answer. So we are adjusting our reporting to the desires of the investor. He is provided with a ‘railway guide’ so to speak, which tells him the direction of the trend (bullish, bearish, consolidation) as well as buy and sell advice for the short-, medium- and long-term. A crisply outlined plan, that should become part of the investor’s system, so that he knows exactly how to respond, even in political and economical crisis situations.

      It is also important to respond quickly to sell signals in case of a bearish trend. The law of gravitation may come into play, which could lead to a major plunge of the rates. In a bullish (undulating) movement, the buy signals are issued one after another, and it is okay to miss one or two, especially if one hesitates because it would mean acting opposite to the strategy of other investors. Which happens to be the main task of the technical analysis: continuously indicating the chance of bullish or bearish trends with the objective of cutting losses and gaining profit.

Logically, our readers would like your opinion about the future developments of the main stock market indexes, such as the Dow Jones, the Nikkei…

Currently I am considering three possibilities, but I will not pursue any action until a concrete signal emerges. If the Nikkei Dow Jones has a bullish breakthrough at the rate level of about 18,500 points, room is created for a further, small increase of about 900 points. There it will meet resistance, which indicates a chance of a renewed relapse of the Nikkei. If that relapse does not occur, and if the indicators are positive, one can gradually enter at the levels we have already indicated. It would be if the Nikkei would bottom at the current level, to gather momentum in order to break through the 20,000 points. Should this be the case it would not be a problem if it fell back to about 15,500.

      Should, however, the Nikkei break through the level of 15,000, we should take into account a new decrease of about 3000 points. With regard to Wall Street: now that my long-term rate objective of 3300 points for the Dow Jones has been achieved, I see no reason to issue a sell advice. If certain stocks issue buy signals, it is safe to enter. Even with a relapsing Dow Jones index, one could buy, as long as it does not break through the 3050 points barrier in a bearish trend. I am cautiously positive regarding the German stock market. Feel free to follow any technical buy signal.



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Hunt for the promising stock

1993-01, Arts & Auto

Financial

Text: H.H. van de Kamp; illustration: Jacqueline Schäfer

Several year-end overviews show that 1992 did not bring what was predicted by asset management, stock market gurus, stock market analysts, account managers, stock brokers and stubborn journalists at the beginning of this year. That is fortunate, because it would make investing a lot less fun. This year, tracking down promising stock, might determine the difference between prosperity and adversity.

     Several overviews around New Year remind investors of their nice rate profits, or rub salt in the wounds caused by incredible losses. Once every while it goes wrong with those charts of bullish and bearish rates. NRC Handelsblad, for instance, has an overview of the Amsterdam main funds, with Heineken on top with an increase of 37.4 percent while in the Volkskrant the beer fund does not reach farther than a rate profit of 9.9 percent. In Beursplein 5, the body of the Amsterdam stock exchange, the annual overview was finalised two weeks prior to the year ultimo, which shows Heineken with a rate increase of 40.3 percent.

     By the way, Beursplein 5 issues a list of all stock funds. In that overview, Desseaux is on top with an increase of 164.7 percent. Regarding bearish rates, HCS is king, with a rate loss of 98.6 percent. According to Beursplein 5, of the forty main funds, 25% has had a considerable increase in rates: Wolters Kluwer, Heineken, Wessanen, VNU, Aegon, Elsevier, CSM, ABN Amro and ING increased between 10 and 16 percent. Daf and Philips belonged to the category of big losers with a rate drop of over sixty percent.
The Volkskrant calculated that of the 210 funds listed on the Amsterdam stock market, 144 dropped with more than 25%. Just 64 funds booked a rate profit of an average of 17%.

     Records

     According to figures of the stock market, 1992 was the year of the records. In the first half, the stock rates and turnovers reached new heights, whereas the second half-year broke all turnover records in the bonds market. On September 17th, a day record was achieved of ?.8 (unable to read the first number) billion guilders, mostly thanks to a high bond turnover. The overview of the stock market further shows that the stock rose mainly in the first six months. On May 26th, the CBS rate index even reached an all-time high of 215.5 (might the stock profundity ‘sell in May and go away’ be true after all?). The lowest point of the year was reached on August 25th at 189.7. The year started at 191.4 and ended at 198.0, thus a profit of 3.4 percent.

     Middle bracket

     With this result, the Amsterdam stock market forms the middle bracket of a number of international stock markets. Hong Kong performed best with a profit of 27.2%. Tokyo performed the worst and suffered a loss of almost the same size, namely 26.4%. These developments clearly show that the Far East cannot be generalised. With regard to the index figures involved, Amsterdam performed worse than the European stock markets Zürich (15.3%), London (14.8%) and Paris (5.3%), as well as New York (5.0). When the currency effect is taken into account, the sharpest highs and lows in this index development disappear. According to ‘het Financieele Dagblad’ Tokyo’s loss, expressed in guilders, comes to 18.4 percent. Hong Kong is not mentioned in the overview. Zürich’s profit is limited to 12 percent whereas New York climbs to 9 percent.

     Brussels, which suffered a loss in local currency, booked a profit in guilders of 2.2%. This, for Belgian standards, is a disappointing result.  ‘Het Financieele Dagblad’ also composed an order of merit listing the development in guilders of a number of stock markets over nine years, starting at the beginning of 1984. In that view, Brussels leads with a 194 percent profit. The rest of the order is as follows: Paris (169), Amsterdam (98), Tokyo (94), London (63), Frankfurt (63), New York (52), Zürich (50) and Sydney (-12).

     Valuation rankings

     Since we are so fond of rankings, we will also look at the average price earnings ratio of various countries. The price earnings ratio – as the name indicates – is the rate of a fund divided by the profit per share of that fund. Or in other words: how often is the profit per stock included in the rate? It is an indicator to determine whether or not a stock is expensive. Based on that information, one can calculate an average for a certain industry or country, which represents how the investor valuates that specific industry or stock market.

     The calculators of the Volkskrant reach an average of 12.8% over 1992 for Amsterdam, which is the lowest of all twelve mentioned foreign stock markets. When viewed this way, Toronto has taken the lead from Tokyo with a price earnings ratio of 40.2. Despite the fact that the Japanese rate level was cut in half in several years’ time, the price earnings ratio is still at 38.2 percent. New York comes in third at 22.5 at a great distance. Milan (21.1) and Sydney (20.1) are also above 20, followed by London (18.9), Zürich (15.2), Paris (14.9), Hong Kong (14.6), Frankfurt (14.4), Brussels (14.0) and finally Amsterdam.

     Keeping in mind that we live in a united Europe as of 1993, the valuation of the Amsterdam stock could be aligned to that of surrounding countries. On the other hand, the average price/earnings ratios have already recovered in the past couple of years, from 5.1 in 1980 in a bullish trend to 10.8 in 1986. Then a small downturn to 9.7 in 1998 and from there gradually up again to 12.8 today. The question is if, after such a long period of increase, the time has come for decrease, or if the process of catching up with other countries will continue.

     Landslide

     By the way, investment results can very easily be manipulated by shifting the considered period. In the magazine of ‘De Nederlandse Centrale Vereniging van Beleggingsstudieclubs’, NCVB Magazine of January 1993, Mrs. H.M.C. Koornwinder comments in this context on the lecture that Professor Dr J. J. van Duijn, a member of the policy committee of the Robeco Groep, gave during the Day of the Stock of November 13th 1992. Van Duijn reviewed the performance of a number of international stock markets over the period September 1987 until September 1992, so including the stock market crash of October 1987.

     According to Koornwinder, who is involved in technical analysis with her company Koornwinder Chart Guidance, Van Duijn should have used recent material, being the period November 13th 1987 until November 13th 1992, thus excluding the stock market crash. Logically, this two-month shift makes a world of difference. The grade indicated first represents the difference in percentages according to Van Duijn; the second represents Koornwinder’s calculation: US 30 and 67; Canada -15 and 11; UK 0 and 53; the Netherlands 6 and 55; Germany – 16 and 44; Switzerland -11 and 27; France 13 and 73; Italy -43 and -8; Japan -33 and ‑37; Hong Kong 40 and 186; Australia -34 and -8. Moreover, Koornwinder states that any sharp-eyed analyst could have predicted the stock market crash of 1987.

     De Telegraaf

     To prevent such subjective choices, a long period should be observed. The longer the period, the more bumps will be ironed out. De Telegraaf had a number of rate developments calculated over a period of 100 years. The Amsterdam stock market handled the continuous stock index as of 1893, labelled the Amsterdam Trend index. Up until now the stock indexes of the Amsterdam stock market did not go further back than 1920. Furthermore, the price trend of the dollar, the gold price, the Dow Jones and the return on Dutch state loans were visualised. The Dow Jones started at the beginning of 1896. The trend index shows a much less favourable course than the Dow Jones. This is partly because, in the Netherlands back then, large cash (dividend) payments were performed. The index was not corrected for this. In addition, America had the tendency of removing poorly performing funds from the stock market. De Telegraaf does not state any figures, but displays graphs, which show that the trend index was at 15 100 years ago and is currently somewhat above 300. In 1920, the index rose to 40, only to fall back to about 7 as a result of the depression in the beginning of the Thirties. The dollar was at 2.5 guilders a century ago and, after having been at 3.6 for years, it has been under the two guilders for some time now.

     Back then, the gold price was at 20 dollars per troy ounce, which stayed that way until the Thirties. After that, it remained at 40 until the mid-Seventies and from there it rocketed to about 800.  Currently, the price of over 300 dollars is considered to be low.

     The Dow Jones Industrial Average started around 50 in 1896 and is currently active at a relatively high level of 3300 points. The return on state loans amounted to a little over 2.5 percent a century ago, climbed to  five percent around 1920, fell back to less than three  percent just before the war and then rose to a top of over 10 percent at the beginning of the Eighties. The return is currently at about seven percent. At the beginning of 1992, the expectations for stock were hopeful in general. Not much of these expectations came true. For the current year, the opinions vary, but in general a decrease in interest is expected in Europe and the Netherlands. That often has a positive impact on stock.

     Asset managers, stock market gurus, analysts, account managers, stock brokers and stubborn journalists are not allowed to speak their mind in this article with regard to their predictions for the New Year. However, we will make an exception for one notable statement. In the NCVB Magazine, the previously mentioned Mrs. Koornwinder says that spreading to prevent risk is becoming outdated. Why invest in gold, real estate, electronic or whatever, if there are more interesting options elsewhere, she wonders. Instead of spreading, localising promising stock will be the motto of the 21st century. And that starts in the Nineties, says Mrs Koornwinder.










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Be alert to bearish breakthrough
Stocks National

1993-01 (1992-12), Money

By Bob van der Burg

Where many investors firmly believed in further increase, Herma Koornwinder issued sell advice just before the crash of 1987. Her reputation was confirmed. She has her own consultancy, Koornwinder Chart Guidance that scans developments in the financial world with regard to rates, aided by computer models. Her clients are mainly pension funds. Her motto: ‘A captain first maps the dangers of the sea before he plots a course. Similarly, the investor needs a plan to direct his decisions.’

Can you further explain your work method?

“It is important to realize that markets form a global system of communicating vessels and that the long-term is very decisive. It is a visual craft. We study graphs regarding price trend, volume, etc, in order to analyse the behaviour of mass markets. We also work with derivatives and stock market indicators. Then we zoom in three-dimensionally, thus gradually shortening the term at hand. This way we do not only process the stock market indexes and group sectors, but the international currencies and interest developments as well. Only then we move to the assessment of individual funds. My monthly analyses result in a vision, which is not the same as a prediction. Issuing advice based on the rate development of a fund is of no use, you need to put it in a wider perspective.”

What are the strong points of technical analysis?

“Technical analysis provides a clear overview of the market. Buying a package of stock and reviewing the rate after ten years is very old-fashioned. The ‘just in time’ principle, that teaches companies to refrain from keeping unnecessary stock, also applies to the investment world. In case the turnover rate of your portfolio is too slow, you will miss out on the profit opportunities provided by the large fluctuations. Technical analysis continuously indicates what the chances of increase and decrease are with the objective of cutting losses and increasing profit. Rate movements are not always what they seem. A three percent increase can run into a heavy resistance. Hedging or taking profits is the motto in that case. However, a five percent decrease can indicate a gathering of momentum for an upward wave, which will invoke a buy advice. The analysis helps track down the hotspots.”

The hotspots?

“Whether it concerns a bullish or bearish trend, there are always indexes or funds that react to the trend in a stronger manner. These hotspots need to be tracked down and subsequently the investor needs to focus on these. Often, the advice is issued to spread the portfolio. However by spreading, you are missing out on chances on better return.”

What is the advantage of your work method as compared to fundamental analysis?

“It is not a choice really, since the methods are complementary. The fundamental analysis tries to determine the real value of a stock as accurately as possible. However, there are more advanced techniques that help determine the right moment of action. In the ideal case, both analyses will reach the same vision, which happened six months ago when my negative advice for the Mexico stock market was issued on the same day as the sell advice of a fundamentalist.”

What can you say about the Amsterdam stock market?

“I am very positive towards the ABN AMRO, AEGON, AMEV, HEINEKEN. WESSANEN and WOLTERS KLUWER stock. For industrial funds such as DAF, BÜRHMANN-TETTERODE and FOKKER, I have issued sell advice on a regular basis in the past couple of months. Furthermore, I have a downright negative attitude towards KLM and NEDLLOYD .

Finally, what is your vision with regard to the entire stock market for the upcoming months?

“Investors need to be on the look-out for a bearish breakthrough. As soon as the downward limits are surpassed, one needs to sell. But if for some funds the upward limits would be surpassed, one may sell.

 

 
May 1993

Correction

My interview with Mrs. Herma Koornwinder in Money January 1993 contained a mistake. ‘As soon as the downward limits are surpassed, one needs to sell. But if for some funds the upward limits would be surpassed, one may sell.’ The word in italic should be: buy.

Bob van der Burg



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Trend-watcher Koornwinder wants to rid technical analysis of its negative image

1993-03, Beleggers Belangen

Wrong interpretation and insufficient knowledge of technical analysis has led to blunders that have resulted in a negative image for this form of investment research. According to Mrs. H.M.C. Koornwinder, technical analysis is underestimated. The investor who is interested and hopes to achieve great results with some software and a few trainings will be very disappointed. In order to control technical analysis and to successfully apply it, a thorough study of a large number of theories and years of experience is required. This to obtain insight and overview.

      He who wants to keep believing that technical analysis is not a good basis for investment decisions, should not talk to Mrs. H.M.C. Koornwinder. There is a great chance that she will convince him otherwise. Koornwinder is managing director of Koornwinder Chart Guidance KCG, a consultancy she created on January 2nd 1990, which specialises in studying indicators that influence the exchange rates. What started as a hobby has developed into a full time activity.

     Trend

     KCG guides the investor in the long, medium and short trend. In addition, the right entry and exit moments for investments are indicated. Therefore, its main activity is trend watching. According to Koornwinder, trends have a predicting value, because they always start small, only to slowly gain momentum and scale. The strength of KCG lies in the global tracking of reversal mechanisms, in order to have one’s investment portfolio ‘trend ready’ in case a turning point in the market is reached. This is why its customers invest based on investment plans that have been created long in advance.

      “A symbiosis of information technology and quantitative analysis complemented with thorough knowledge of the classical and modern technical analysis forms the core of all KCG activities. Conclusions are drawn from the interaction between the main fundamental economic variables.”

      After years of study and research in a ‘laboratory atmosphere’, Koornwinder has stepped into the limelight in 1987 with her rate predictions, although she does not like the word ‘prediction’. After all, she is selling a vision, which vision has proved to be more right than wrong.

     More assertive

     To draw more attention to this analysis method, she gives lectures at universities, investment study clubs and seminars. “The investor needs to become more assertive.” When I started giving lectures, the banks said that there was no demand. Luckily my efforts are generating return; the market for technical analysis has been opened up.”

      Technical analysis is not new. At the beginning of this century, methods had already been developed to make rate predictions based on historic rate and turnover data, which were recorded in graphs. Mrs Koornwinder states that, partly due to their bad image, technical analysis techniques are hardly applied to make investment decisions. “Traditionally fundamental analysis is the preferred method to substantiate rate predictions, which is based on the expected development of macroeconomic factors such as interest, inflation, unemployment, growth, payment balance and state finances. On a company level, cash flow, price-earnings ratio, investments etc are being observed, but also the quality of management as well as economic and political backgrounds. Furthermore, the traditional analysis methods contain many subjective elements: expectation, intuition, experience knowledge etc.”

     Visual craft

     Koornwinder distinguishes between classical and modern technical analysis. The classical technical analysis simply looks at the rate fluctuations in the past. Thanks to the development of the modern computer technology and with the help of databases, it is possible to collect and scan the worldwide developments of the financial markets within several minutes.

      “Nowadays, one can analyse and combine data using today’s computer technology, so that new information is created. Because of software alterations, the output of the original data is enriched with added value, but let me issue a warning right away: there are systems that automatically filter and draw conclusions, the so-called expert systems. Technical analysis remains a visual craft.”

      Koornwinder works with a large number of indicators. “Rates fluctuate as a result of upward and downward pressure, comparable with blowing bubbles. I use indicators that influence the rates from all directions. This might be the rate of special stock, gold, dollar etc. I actually scan like a doctor. The interpretation of the observations is what is important. “When I see that the indicators are not responding to the rate development the momentum has left the rate movement. Based on my scan analysis, I provide my customers with the expected rate increase or decrease in tenths of points.

      If a predicted movement does not continue, the acceptable loss is determined in advance. My motto is: “cut losses and maximise profit”. But that is easier said than done. That is why I am convinced that an analyst should not also be a manager. Everyone their proper specialty. Even in the financial world. An analyst should not be concerned with the risk of losing millions of guilders. This is why I did not accept offers of institutional investors to manage funds.”

      During the Gulf war, she issued buy advice for Hong Kong, Amsterdam and the United States. The index figures of these stock markets rose over respectively 100, 37 and 25% to date. In this increase she also indicates positive and negative funds. As an example a recent advice on a number of Dutch funds that has been almost exactly spot on to date.

 19900300

       “My highly developed analytic method undeniably achieves a better result than simply investing in investment funds. Likewise trend analysis and selective buys will achieve a better result than index investments can obtain” says Mrs Koornwinder.



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Facts refute negative image
Technical Analysis

1993-03, EFFECT

I    In his book “A Random Walk Down Wall Street”, Burton Malkiel suggests that a blindfolded monkey throwing darts at the stock page of a newspaper could compose a better stock portfolio than the highly trained, experienced and very well paid professionals who normally act as portfolio managers. For a couple of years, this hypothesis has been tested by business magazine, “The Wall Street Journal”. Every month, four investment advisors compete against journalists throwing darts (for logistic reasons, the newspaper refrained from using monkeys).

II   In his booklet “Luchtkastelen en gouden Bergen” (“Pies in the Sky and Gold Mountains”), Mr. Dr. R. Th. Wijmenga states that it is no use to think that one will ever be able to outperform the market. Mr. Wijmenga was even promoted on this subject.

 

III  During an investment day organised by the NCVB, Mr. Borst, of the Amro bank, announced he was in possession of an American report which confirmed that technical analysis did not work.

IV  During the congress “De Beurs” in Amsterdam on October 11th 1989, Prof. Dr. J. H. W. Goslings, responsible for the strategic investment policy of the ABP pension fund, stated that stock market rates could not be predicted and that it would be extremely difficult, if not impossible, for an investor to outperform someone else. So Goslings suggests objectively following the average rate movement. In other words, to choose one’s portfolio in such a way that it is in line with the composition of the stock index, for instance, the EOE (Netherlands) or the S&P 500 (America). Nor does dynamically protecting one’s stock with options appeal to Mr. Goslings, because that would also suggest that rates could be predicted.

 

V   “Timing”, or determining the right moment to buy or sell stock, is no longer of importance. The stock markets are fluctuating so rapidly that it is becoming increasingly hard to determine the right moment of entry and exit. Staying put generates more return. This remarkable statement was made by Graham Nutter, president of international investments at Fidelity Investments. Fidelity is one of the largest capital managers in the world with a managed capital of $140 million and about 70 investment funds.

 

     The aforementioned is a random selection of the countless negative responses of the past couple of years that have damaged the image of technical analysis in the Netherlands. Investment analyses do not, or hardly, apply any technical analysis techniques. Statistical indicators are still being preferred. But we are living in an era of knowledge explosion. Investors often overlook problems due to an information surplus. Technical analysis may provide a solution, but is still surrounded by a haze of obscurity.

 

     Fundamental analysis is the method that has been traditionally most often used to substantiate rate predictions and is based on the expected development of macro-economic factors such as interest, inflation, unemployment, growth, payment balance and state finances. Cash flow, price-earnings ratio, investments and so on are being observed on a company level, but also the quality of the management and economic and political backgrounds of the country play an extremely important part.

 

     Classical technical analysis, on the other hand, predicts rate movements based on rate fluctuations in the past while assuming that all relevant influential factors are incorporated in the price and that new information is instantly included therein.

 

19930618      The investment world, however, is going through some fundamental changes and is being dragged into the modern world. The arrival of advanced computer technology has made it possible to collect, analyse and combine data on a global level. New information is being created by packaging these data differently or otherwise altering them. The thus altered or enriched output is different from the input; it is changed by the software. This is the modern technical analysis. All three analysis methods have their limits, however.

     Assuming that the past is the only grip for an analyst, I have spent many years studying the possibility of achieving financial results that outperform the normal market results, using investment strategies based on historical rate information. I created a laboratory environment, so to speak, in which stock markets, currencies, and interest developments in the following countries and/or geographic areas were studied for a period as long as possible, but on average fifteen years:

* Europe

* USA and Canada

* Australia

* Asia, Japan, Hong Kong, Singapore, Thailand, Taiwan, Malaysia

* Mexico

* Bonds

* The main raw materials

* Investment funds

     This intensive research made it clear why certain theories work in one situation but not in another. Using this data, models were developed that achieve a higher level of reliability. As of May 1987, it became possible to track down a number of crashes and rallies at an early stage to indicate the outbreak moment and often even to indicate the rate target, with regard to national studies (October 1987, Nikkei drop, oil crisis, interest decrease)!

     As shown by the graphs below, good results are achieved also on a fund level. On October 12th 1992, I reviewed a number of EOE funds. My evaluation back then and the outcome on February 23rd. I am very positive towards the stocks ABN AMRO, Aegon, Amev, Heineken. Wessanen and Wolters Kluwer. For industry funds such as DAF, Bürhmann-Tetterode and Fokker, I have issued advices to sell on a regular basis in the past couple of months. I am downright negative towards KLM and Nedlloyd.

     KCG ANALYSIS

 

      Not only does advanced computer technology enable one to track down interesting markets, group sectors and stock, it also helps in managing the aspect of timing. To this end, clearly outlined disciplines should be observed. Numerous factors contribute to the delay, stagnation and continuation in the opposite direction of a rate development. It is possible to track down those causes through early diagnostics. The art is to distinguish whether or not a reversal mechanism has been invoked or if we are dealing with a consolidation......

HK: At least one page is missing



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Stock of Japanese companies as economic barometer

1993-04-24, Het Financieele Dagblad

Last Friday, the Japanese stock market was able to break through the bearish trend of the past five stock market days. With an increase of the Nikkei-225 of 0.6% to 19,704.15, the psychologically so important limit of 20,000 points came a little closer. This limit was exceeded last Tuesday, due to the continuous positive valuation of the yen.

      Statements by Japanese trade partners regarding the desirability of an expensive yen, in order to decrease the trade surplus of Japan, placed the rates under a massive amount of pressure during the past week. Japanese export companies, in particular, felt the heat. The breakthrough of the bearish trend was mainly the result of a shift in the views of investors, according to traders. Where, in the past five trade sessions, the emphasis lay mainly on the negative impact of the more expensive yen, last Friday the general opinion was that the Japanese economy would benefit from cheaper energy prices and other raw materials.

      Even though Bank of Japan governor Yasushi Mieno hinted during an interview with press agency AP Dow Jones that he would not consider an additional decrease in discount, the stock market is still reckoning on this possibility. After all, should the interventions of the central bank fail to keep the dollar above the limit of the yen 110, a decrease of the interest could still take the pressure off the yen.

      With the increase of the Japanese currency, the concern about the constancy of the stock market increases as well. Since the beginning of this year, the index of the stock market in Tokyo increased 16%. In Japan, people were whispering about a mini-bubble, however, stock market traders and securities firms, such as Nomura and Nikko, spoke of an increase based on fundamentals.

      Supporters of the statement that the stock market is a barometer for economic development believe the imminent recovery of the economy is supporting the Japanese stock market. Therefore, it was no surprise that the Nikkei index ran ahead of the publication of the third encouragement plan of the Japanese government on April 13th. On that day, the index broke through the 20,000 points limit with an average rate increase of 4.3%. That was the biggest increase on one trade day since March 1992 when the first encouragement package was announced. Bank governor Mieno did not want to confirm last Friday that the economy is back on its feet, but he expects that the additional budget of ƒ210 billion will encourage the growth in the first half of the budget year, and that individual investments will take over in the second half.

      Regarding the recovery of the stock market, it is remarkable that the stock of financial bodies is rapidly increasing while it is common knowledge that banks are far from solving their problems with doubtful debtors. Technical analyst H.M.C. Koornwinder’s purchase advice list includes the Dai-Ichi Kangyo Bank and Mitsubishi Bank. The value of this bank stock has increased 88% in less than a year. Why? Since Koornwinder does not want to reveal what she puts in her indicators, she cannot answer that question.

      Koornwinder has been positive about the Japanese stock market for quite some time - “even when the majority of the analysts were still very pessimistic regarding the development of the Japanese stock market.” Koornwinder answers evasively the question of whether the Japanese stock market will develop positively in the long-term: “My indicators are currently issuing positive signals.” That is all she can say about that. Koornwinder’s technical analysis is not limited to “drawing lines”, but also includes the international fundamental economic indicators. But the Japanese fundamentals are not painting a positive picture yet: “My technical indicators, however, are.”

      Wim Kool, of Nomura Bank Nederland, expects that the current bullish trend of the Japanese stock market will continue. The positive valuation of the yen will not be of great influence, according to Kool: “That is mainly a political matter.” Bank governor Mieno is glad the rates are increasing because the positive attitude on the stock market is creating an even better atmosphere in Japanese business, and with the Japanese consumer. And these two parties must fuel the two main motors of the Japanese economy because the government’s budget leeway has been sufficiently burdened with the third encouragement package of ƒ210 billion.



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Active management certainly has a future
Groundbreaking Theory for Financial Markets

1993-06-18, Beleggers Belangen

Guest Speaking

By Mrs H.M.C. Koornwinder

In ‘Beleggers Belangen’ of 19 March, Mrs. Angelien Kemna wonders, in her column titled ‘Groundbreaking theory for financial markets’ if active capital management is useful. After all, research has shown that nobody is capable of systematically gaining more return on an actively managed portfolio than on a stock index. This could lead to write off active management as an expensive, unrewarding form of portfolio management.

      However, she immediately indicates that this is a unilateral way of thinking. After all, based on empirical work, a number of cracks, if not tears, have emerged in the stronghold of efficient markets in the past couple of months.

      Since Mrs. Kemna has previously shown to be able to recognize a problem and is clearly open to different approach, I would like to highlight the following. With the knowledge that both the fundamental and the technical analysis each have their shortcomings that prevent reliable predictions and assuming that the past is the only grip for an analyst, I studied the undulating development of the international financial markets for many years.

      A laboratory installation was created, so to speak, to ensure effectiveness. This intensive research made it clear why certain theories work in one situation, but not in the other. The main outcome of my research:

  • It is possible to generate conclusions from rate fluctuations and derivatives. Since one cannot rely on just one theory, one should master a number of theories to optimize the reliability of the prognosis.
  • The market actually has a memory.
  • Rates do not fluctuate at random, but in waves.
  • Waves are caused by an underlying force field.
  • The underlying force field is caused by the psychology of the investors. To see through this, one should scan the mass emotion (the waves of pessimism and optimism) in order to expose the underlying structure.
  • Trend and countertrend are the result of forces that oppose each other. If the upward forces are stronger than the downward forces, upward waves will be the result and vice versa.
  • There are underlying connections.

      A number of conclusions:

  • Wave analysis, combined with stock picking, is demonstrably more lucrative than passive buy and hold strategies in which there is relatively little trade, but in which the risk analysis holds the main position.
  • Wave analysis is more lucrative than risk management.
  • Wave analysis is more lucrative than spreading.
  • Wave analysis is more lucrative than index tracking.

       Using this data, we developed a synergetic methodology: “The KCG analysis” that timely recognizes structural changes and with which a higher level of reliability can be achieved. During the past seven years, it was possible to ensure timely tracking of a number of crashes and rally’s on the international financial markets, while even indicating the moment of outbreak, with rate target. Main analyses:

October 1987     :   October crash

1989                 :   Dow Jones Industrials 3300

Start of 1990     :   The bearish trend on the Nikkei

1991                 :   The bearish wave of the international interest

1992                 :   Dow Jones Industrials 3660

1993                 :   The bullish wave for the Nikkei

     In these waves, positive and negative funds can be selected with the strength—weakness analysis:

19930618


19930618 UK

      For the monthly magazine Money, we selected a number of positive and negative EOE funds on October 12th.

      I would like to invite the researcher, who ‘proved’ that nobody is able to systematically achieve more return on an actively managed portfolio than on a stock index, to study the outcome of my analyses.  After the cracks and tears we have seen emerging in the stronghold of efficient markets the past couple of years due to empiric work, we can now see a giant rift.

      Not only will investing become increasingly important in the nineties, it will also become more complex. The current economy is characterized by continuous uncertainty. Economists are completely lost. In addition, the rate fluctuations have increased considerably in the past couple of years, and they will only grow in the future. Those fluctuations no longer just concern trade, but more and more speculative responses, as the result of a greatly improved information provision of the financial markets.

      As an explanation, you will find the rate development of a number of countries in the table. Between 1974-1987 a passive buy and hold strategy was sufficient for a good performance. However, after 1987 profit and loss followed one after another at a pace that was too fast, meaning that people missed out on a lot if they took the passive approach.

      Today’s computer controlled buy and sell behaviour can and should not just be approached based on annual report analysis, acquisition rumors and hunches. Advanced instruments are required. After all, you cannot discover the secrets of the universe using just binoculars, you need a super telescope. If the investor wants to survive in the ‘software economy’ he needs to be aware of this. Active capital management is very useful, however, only combined with technical analysis. A profession that, just like any other specialism, does not just require knowledge and skills, but also insight and vision.



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’Knowledge explosion’
Letters

1993-08-21, Beursplein 5

By Herma Koornwinder

After my interview in your magazine dated June 19th, I received a number of questions that merit some explanation. It turns out that the investor does not know in what context technical analysis should be placed.

      Investment analyses do not, or hardly, apply any technical analysis techniques. Statistical indicators are still being preferred. But we are living in an era of knowledge explosion. Investors often overlook the problems, due to an information surplus, and waver between hope and despair. Technical analysis may provide a solution, but is still surrounded by a haze of obscurity.      Some investors have had bad experiences. They hoped that a fast computer, applicable software and a couple of training sessions would lead to good results.

      However, if one has not thoroughly studied the undulations, the cycles, the interacting forces that cause the rate fluctuations, the psychosocial influences, in short, the mechanisms that invoke a trend reversal, one should leave it to the expert - very strong analytic skills, a vast diversity of theories, a good strategy and above all, a VISION, are indispensable.

      A general complaint: people are afraid to invest because of the extremely negative vision of a number of analysts. Is this fear justified? These analysts were a wave too early with their negative vision. For years, advocates of certain theories have been stating that we have had the top of tops in 1987 and 1989. The EOE index would fall back to the level of 40 points, the CBS rate index to 30 points, the Dow Jones Index to 150 points, etc.

      They might be right someday. However, for now I have greatly benefited from this bull. Our rate target for the EOE index was 346, which was achieved last week! The rate target for the Dow Jones Index is 3660 - 3600 has been touched! Other national studies were timely and deemed positive as well. Some increases were tremendous. Of course, we reckon with ‘the big bear’. Should the stock markets really collapse (‘grand super-cycle bear market’), we will try to report and coach this in the same way as we did during the decrease of the Japanese stock market: controlled and accurately.

      Furthermore, I want to elaborate on hedging a portfolio. The combination of stock and derivatives (read: options) in a hedge is such that the option protects the stock and vice versa. A decrease in value of the stock is compensated by an increase in value of the option, or the other way around. The perfect hedge ensures that a rate change of the stock does not affect the value of the portfolio.

      As opposed to the institutional investor, I recommend individual investors to hedge during vacation times, thus, in a way, insuring their portfolio. Of course, this costs money, but so does your holiday insurance. By way of illustration, a calculation example of a hedge of the total portfolio, mentioned in Beursplein 5, dated June 19th 1993, to see of this can lead to reasonable results.

      We are looking at the put October 320 at the time the index quoted 315.92. We therefore also need to include the October future in this story. The future is nothing more than the actual rate of the index, with addition of the interest until expiration, and with deduction of intermediate dividends.

                                                  18-6-‘93            16-1993

The October future quotes                319.10              351.80

The put October 320 quotes                 9.50                 1.70

The total investment is                    328.60              353.50

So the result is: 353.50 - 328.60 = 7.58%

       The EOE index advanced with 11.03 percent, but this does not include interest and dividend. Regarding the future increase, a more realistic increase of 10.24% applies. In short, the hedge has cost 2.5% in return. However, the thus obtained security will provide for a carefree holiday.

H. Koornwinder

Koornwinder Chart Guidance

Heeze



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Against the current
Beursplein

1993-09-09, Trends

Door D.H.

Loyal readers will probably remember the Dutch independent technical analyst Herma Koornwinder as ‘Expert Speaking’. When the Dutch financial world was very negative, she sent optimistic messages into the world during the Gulf War – based on her technical analysis (KCG) indicators. Last year, these were crystal clear, stating target objectives for the Dow Jones Industrials: 3600 points; and for the EOE, 346 points.

     Koornwinder sticks to her credo: spreading is outdated. Why diversify? According to her, the opposite should be done: track down promising stock. That is the trend of the Nineties. Arbed, for instance, rose from 1700 BEF to 4300 BEF this year, whereas EuroDisney dropped from 98 to 50 FRF. A world of difference. This is why Koornwinder tracks stock markets on a global level, and selects winners and losers in 22 countries. Even now that her rate targets have been achieved, she keeps looking for the best bits. As long as her KCG indicators issue positive signals, she will respond to them.

      Her list of positive funds now includes, among, others: Itochu, Shiseido, Sharp, Broken Hill Properties, CRA, Hong Kong Land Holding, Overseas Chinese Banking, United Overseas Bank, BK Vision, Ciba-Geigy, CS Holding, EMS-Chemie Holding, Roche Holding, Pharma Vision 2000, Chindler Holding, Surveillance, Winterthur, Zurich, Boskalis, Elsevier, Hunter Douglas, Internatio-Müller, ING, Océ, Wolters-Kluwer, Nutricia, Alcatel, Compagnie Bancaire, Eurotunnel, Imétal, Matra-Hachette, Paribas, Bank Austria, Generalli, Bennetton, Cartiere, CIR, Chemina, Suez, Total, Valéo, Italgas, Olivetti, Arbed, Creditanstalt Bankverein, Ericsson, Volvo, Banco Popular Espagna, Telefonica, British Gas, Trade Universal Stores, M&S, Guinness, Pilkington, Reuters, Shell Transport and Thorn-EMI.

      Should, however, the ‘super-cycle bear market’ that has been predicted by a number of analysts for several years, announce itself one of these days, she will exit the market with a considerable profit, to re-enter it when the levels are low. (DH)

 



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New fund for technical analysts in the pipeline

1993-10-09, Het Financieele Dagblad

By R. Bakker

If it is up to Koornwinder Chart Guidance, technical analysts will soon have more options in addition to the investment funds Optimix and Pessimix. Following the great demand of individual investors, the technical analysis agency is in talks about the introduction of a new investment fund for the increasing group of people who believe in the wave theory.

      Even though the stock market crash of October 1987 is well behind us, this October stock market traders again seem to be very careful. “Such a crash could happen at any time of the year, however, in October one always thinks twice before taking in a large long position,” one trader says. During these times, insecure investors tend to fall back on the analysis of the small group of analysts (which is growing in line with the expected memory loss of the investors) who successfully predicted the stock market crash. One of them is Mrs. H.M.C. Koornwinder, a technical analyst of the purest kind. She, however, is actually able to substantiate her statements with letters and reports in which she revealed her vision (a word I prefer to “prediction”). Partly because she was not professionally active back then, and “just” a stay-at-home mom with a hobby, her message was not heard.

      This only made Koornwinder more determined which resulted in the establishment of her own technical analysis agency, Koornwinder Chart Guidance, a couple of years later, at her residence in Heeze, stationed between the kitchen and the living room. In the past couple of years, when most analysts were continuously issuing sell advices, first pursuant to the Gulf crisis and then pursuant to the economic recession, Koornwinder remained very positive about the stock market.

      Where does she get her vision? “Rates do not fluctuate randomly, but by undulating movements and the art is to map these waves,” is her apparently simple explanation. A metaphor Koornwinder likes to use is the   tsunami (tidal wave), the terror of the seas that starts somewhere with a small ripple in the ocean.

      When studying the ocean, it is no use to look at all the boats separately, she says. In other words, it is no use to have a strictly fundamental analysis of one specific company. “No matter how positive the analysis, if the trend is downward, that company will be dragged with it. So the most important thing is to indicate trend movements. Only after that, it will be useful to review individual funds.”

      Aided by an interactive computer program and a considerable database, Koornwinder keeps track of 800 prices of stock, obligations and raw materials, distributed over 22 countries. Every month clients receive a medium- and long-term vision including the main support and resistance limits, bandwidths and rate targets. Every 14 days a so-called global update follows, in which funds or indexes unchanged in Koornwinder’s vision will not be mentioned.

      Because Koornwinder knows from experience that investors need information to be as simple and compact as possible, she has learned to translate her complex message into a clear and simple vision. But do not think that investors are beating a path to her door. The company that started on January 1st 1990 has only a couple of institutional investors as customers, which Koornwinder blames on the lack of knowledge in institutions about technical analysis and the fact that she hardly does any marketing. Instead, she chooses to invest in perfecting and automating the method she has developed.

      However, a demand for her vision is coming from the individual investor quarter which is why she is currently in talks about the introduction of an investment fund based on technical analysis. Her vision for the near future? The so-called “super-cycle bear market” which will cause the EOE to fall back to 40 points and the Dow Jones to drop below the 1,000 points, is not yet in sight. “Of course, I reckon with it, but if that collapse arrives, I hope to report and coach this in the same way that I did during the gradual crash of the Japanese stock market.”

     Buy or Bear

     The latest Koornwinder Chart Guidance update issues mainly a buy advice to the financial values and so-called defensive values. Of the Amsterdam stock market funds, Koornwinder is positive towards: ABN Amro, Aegon, Akzo, Amev, DSM, Elsevier, Gist, Heineken, ING, KLM, Philips, Polygram, Koninklijke Olie, VNU and Wolters Kluwer. “Should, however, the expected 'super-cycle bear market' emerge today or tomorrow, I will issue sell advice, only to eventually buy back at a considerably lower level.”



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For investors and companies
International Finance & Economy

1993-11-21, Metternich’s Weekbulletin

By MM

This is it: a world record in the number of weekly comments on matters concerning the financial and economic world. Luckily, no health problems occurred that forced me to skip even one single week. Now I should listen to Joost van den Vondel: “Do what you have to do, do not miss any moments, because life rushes past you.” This profundity is attached to the wall of the boardroom of Beursplein 5 in Amsterdam for a reason. My nicknames, such as Mr. Aegon, Mr. ACF, Mr. HAL, Mr. ING, Mr. Philips, will be redirected to the dumpster this week. After the breath-taking rate explosions in all bonds and much stock, saying goodbye hurts a little less.

    For the traditional choice of stock for your Christmas tree 1993, I have to look for possible new stars in the firmament. If the moment has arrived that we say, rather expensive than not for sale, the investor should not disregard profit-taking. The social respect for risk-bearing investing is growing. Still, I only partly succeeded in abolishing the annual fine on the virtue of saving through property tax. With this encouraging prospect, I wish you a merry Christmas and a successful 1994. May everything go well for you, even at a possible gloomy Monday, January 10th 1994, the day of the New Year meeting of the press with the business community.

      During the last couple of months, more and more signals from management rooms have reached us, saying: “If only we were doing as well as our stock market rate.” When cash is declared trash, all hell breaks loose with an 86% rate explosion in 1993 in Hong Kong as apogee. Mainly the 4th quarter of 1993 - in which, after seven  years of negotiation, the hope for a GATT agreement increased and an EU stimulation package was ripening – teaches us this. Such rate increase in so much stock would almost make the investor forget that Europe still bears the scars from an old-fashioned recession.

     Again, the incurred expenses left much to be desired. The fact that there were no further deteriorations since about mid- 1993 does not necessarily herald of a boom. Without artificial measures – e.g., playing Santa Claus with the 1994 profits from privatisation of state property – restoration of public purchasing power might prove to be A SLOW PROCESS. West German consumers are still confronted with the unpaid bills from the reunion. After the increase of pension premiums, rent and gas duty in 1994, Germany will face years of 7½% surcharge on the salary and income tax after 1994 (after the elections). Spain is in for an overall financial diet as the leader in the EU with 23% of the active population unemployed.

      Neither does the harrowing French youth unemployment make consuming very appealing. The French government is toying with the idea of reducing the social premiums whilst increasing the VAT instead. This way, Asian import products can help pay for the French social distress. The British are in better condition after having struggled for years with the poverty line, but are confronted with house mortgages from the Thatcher era of about ƒ30 billion above the value of the collateral. For the Netherlands, 1993 has been the last year (for now) with a salary rise in several industries above the inflation percentage. All is still well for retail kings AHOLD, KBB and Macintosh with 1% more consumption in 1993 at 1% more population.

     Everything stands or falls with the level of export growth in 1994. Only a further rise in the value of the dollar (also keeping in mind the many dollar-aligned countries in Asia), may be able to lend lustre to Europe. ACCORDING TO RABOBANK, A DOLLAR IN THE DIRECTION OF ƒ2.15 IS A MATTER OF MONTHS AWAY. Whether or not the Amsterdam stock market has sufficiently anticipated this, is something only time can tell. Worldwide, the stock markets are focused exclusively on windfalls when renouncing restful deposit accounts. Later in 1994, a turning point of the interest situation, by enabling European institutions to borrow more money, may be the first setback. With parliament elections in 1994 in Germany, Italy and the Netherlands, the political field may turn hazy. In particular, if a political landslide causes politicians with less or no policy experience to end up behind the ministerial steering wheel. Back to today, the increasing number of ‘funerals’ of pessimistic managers of the ‘big money’ is just as alarming.

     Not to mention Russia, where, after the elections, a parliament with a majority of extremists does not promise the necessary stability. Koornwinder Chart Guidance, specialist in technical analysis, does not see any trend reversal mechanisms in its indicators and hopes to be able to timely report a trend reversal. Let us hope that the sellers’ strikes last somewhat longer!

HK: The rest of this document is unreadable or missing.



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Select to win
Beursplein

1993-12-02, Trends

By DH

“Diversification is outdated; you need to start looking for promising stock.” That is the credo Dutch technical analyst Herma Koornwinder still believes in. At the start of December we published on this page the list of stock she was positive towards. Her selection rose with 7.07% during this period, the MSCI world index dropped with 1.93%. Robeco added only 0.85 %, despite its small army of professional analysts, and the Amsterdam Euro Top 100 rose 0.44%.

      The importance of – global – selection is evident based on her list of Japanese stock: while the Nikkei Dow Jones index collapsed, the selection of our “silicon globetrotter” rose over 15%. Her bearish rate target of 15,000 points for the Nikkei has now almost been reached and if that level is surpassed, we could continue to 13,000 points.

      She has also provided us with a list including some Dutch and Belgian, but mostly Swiss, stock she is positive towards: Broken Hill Properties, Overseas Chinese Banking, Ares-Serano, Bär Holding, BK Vision, EMS Chemie Holding, Forbo Holding, Merkur Holding, Motor Columbus, Pharma Vision 2000, Roche Holding, Schweizerische Bankgesellschaft, Zürich Versicherung, Heineken, Nedlloyd, Polygram, l’Oréal, Valéo, Banca Commerciale, GBL, Solvay, EVN Energievers. Niederösterreich, British Telecom, Great Universal Stores, Hanson Trust, Lohnro, Iberdrola. At the beginning of next year, an update will follow. (DH).

     Those silly geese

      In the United States, women are still considered to be second-class citizens in the financial world. In high finance in particular, women are a rarity. Joanne T. Flynn, who was fired as president of the renowned broker Goldman Sachs in 1989, was vindicated in court with regard to her claim that her discharge had been discriminatory.

      But research also shows that female clients receive little acknowledgement from the brokers: men receive better, more advanced and more focused information. Women remain those “silly geese”. The brokers argue that women are unable to ask direct questions… Why this difference? Men are believed to be better at taking risks and trade more, which means higher commissions for the brokers. It is a shame that these brokers are so shortsighted: of all Americans with a capital of 500,000 or more, 41% are women… (DH)



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Protect stock positions
Mrs Koornwinder warns based on own system

1994-01-21, Beleggers Belangen

Beursvisie

By G.P.H. Lijnes

Every now and then the name Mrs Koornwinder turns up in the media. She has repeatedly made correct predictions. She has been positive about the stock market since 1991, but indicates that counter pressure is to be expected soon. Investors can keep all their stock, but, according to her, need to hedge their portfolios. In other words, protecting them with options, for instance for half of the total. Currently it is unclear whether or not we are at the verge of a new upward wave or trend turning point.

19940121

      At the beginning Herma Koornwinder got into technical analysis out of sheer curiosity. The apparently illogical behaviour of the stock market got on her nerves. Just as did the theory that about everything was already processed in the rates. She developed her own system and took some pretty powerful stands against so-called common truths. According to her it is very much possible to distinguish between the bad funds and the good funds, which renders spreading futile. She also believes that the market actually has a memory. In addition, she stated at the end of 1992 that the rate fluctuations will only become more intense in the future as a result of speculative responses and consistent with the greatly improved information provision and internationalisation of the financial markets.

      Amazingly well

      It has to be said that she obtained a perfect score with regard to her statements on the future trend of the stock market and the selections of the funds she made in different media. We will print one of many examples we received from her. It goes without saying that we have verified the accuracy of the data stated therein. It concerns a presentation at ABN AMRO Eindhoven for an investment study club, during which she only provided information about the EOE and gave a division in positive and negative funds. Other publications show that she has changed previous sell advice into buy advice (Nedlloyd, Van Ommeren e.a.) later on.

      A comprehensive list with a selection of international funds, which she issued to the Belgian magazine Trends in August of last year, had risen 7% at the end of November 1993, whereas the world index dropped almost 2%. Another international buy list she issued, containing 27 funds, had climbed 6.5% a month later, whereas the world index had climbed just 0.12%.

      Suffice to say that her system works. Amazingly well as she puts it herself. When domestic and foreign banks as well as securities firms reported in 1989 that technical analysis did not work, it raised doubts in her mind. “Is it just a coincidence or am I using a unique method?” she wondered. She decided to work in silence for a couple of years and to perform research, while providing a number of clients - institutional investors - monthly with her Koornwinder Chart Guidance per fax, and in addition a biweekly update on the direction of the stock markets and the strong and weak funds on a global level.

      Criticism motivates

      She does not want to disclose the secret of her system. She is, however, willing to say that it is some sort of mixture of fundamental and technical analysis, linked to mass psychology. In which a multitude of data is considered, from the common economic details to the smallest details.

      She says: “I have studied the behavioural science of the mass markets for years. I have developed a system based on numerous global indicators. Every month I study those indicators for two weeks to discover their mutual cohesion. That tells me the state of the forces. Based on that, I will study the undulating motions. When doing that I need to make a clear distinction between the short, medium and long waves. The indicators provide me with the patterns, the supports and the resistances, which I process into my analysis. I put the entire data package on a scale model, considering the strengths and weaknesses. That is very different from simply applying a software package pertaining to technical analysis. If you are not using the right undulating motion as a basis, technical analysis can even work against you.”

      Not everyone in ‘the establishment’ thinks highly of Mrs. Koornwinder: a self-made investment analyst, who believes she knows better, does not go down well. “Criticism only motivates me” Mrs. Koornwinder says, who has had all her visions and advices of the past 7 years verified by an accountant, in order to obtain an objective report. Even though it is a little sooner than she planned, she will step into the limelight more often. Her system has worked well and Mrs. Koornwinder has idealistic thoughts about the opportunities for institutional investors to perform better than they currently are. If that happens, pension premiums and social levies could even drop. She is also thinking about starting her own investment fund. Large investors have shown interest to that end.

      On first thoughts the moment she chose to step into the limelight seems a little less fortunate. The “mark-time” advice that tells investors to ‘hedge’ their portfolios, awaiting the direction the stock market will head in does not seem too strong. However, as early as November, she told her customers that there would be some counter pressure in this upward wave. Mrs. Koornwinder points out that she has been indicating an upward wave since 1991. She has issued clear buy advices on several occasions (apart from a single temporary “mark time” advice, however without hedging). In that period, the EOE index rose from 235 to 424 (plus 80%). The fact that she is issuing signals that are not clearly positive means something. In addition, the majority of the advisors are currently encouraging people to get into stock, since the interest should continue to drop and a part of the money on savings and deposit accounts should shift to stocks. Indeed a plausible story that was also published by the Rabo and MeesPierson on a full page ad recently.

19940121
 
      Counter pressure Imminent

      “Yes, and as it happens my system indicates that we should expect counter pressure of at least several per cents. I don’t know how long that will take. Also, it’s impossible to be certain right now whether or not there will be a new upward wave or a trend turning point. Both situations will cast their shadows forward. New data is arriving daily and at some point there will be enough evidence to be able to say where the market will be heading. If it climbs, the money lost on options has been a necessary insurance premium. Which, in that case, will be fully compensated by the further increase of the stock possession. If it drops, one is already (partly) protected.”

      Given the good score of Mrs. Koornwinder up until now, we believed it to be useful to let her express her vision. And of course we made the agreement that we will receive a signal as soon as she knows which direction the market will be heading in.



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Koornwinder: Take the profits

1994-3-25, Beleggers Belangen

In BB-3 [January 1994], we left Mrs Koornwinder to spread the word about the markets.

    At that time, she advised investors to ‘hedge’, or safeguard, their positions because her system showed that one had to take into account several of her indicators which were showing weaknesses, even though the trend was still upwards. Now her advice to private investors is to take the profits.

    Over the years, Mrs Koornwinder has developed a unique worldwide analytical system, based partly on technical analysis, a system that, through advice given to institutional investors and recommendations made to others, has been shown to work well.

    The fact is that the stock market, as measured at the Amsterdam EOE index, has not gone up one jot since her warnings [in January 1994]. The value of some individual shares has gone up, while the value of others has gone down. Shares which broke through resistances could be kept or bought, and shares which broke through support should be sold.

    It is Mrs Koornwinder’s philosophy to maximise gains and minimise losses. Private investors should now harvest their gains, and institutional investors, who cannot do this in full extend must steer by and hedge. The [EOE] index has risen by 200 points, or 90 per cent, since Mrs Koornwinder’s system gave the sign for a long upward wave movement [in January 1991]. The best shares, obviously, have made even better gains than this in that period.

    ‘Now it is a tense moment to see if this increase in the market continues. In case the markets go up, my indicators, at a certain moment, will show it is sensible to step into the market again. If this is so, I might have missed a small part of the wave motion but, in any case, if the markets go down, I won’t lose out and I can step in when my indicators show enough strength. Above all, there are interesting actions possible in bear markets, too.’


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Koornwinder issued timely warning

1994-07-01, Beleggers Belangen

Fair is fair: Mrs Koornwinder was one of the very few who signalled the end of the bull market at the beginning of this year. Our final issue was still filled with optimists (except for Leuschel), but in our issue of January 21st, we gave Mrs. Koornwinder the floor, who, based on a self-developed system, indicated that counter-pressure should be expected on the stock markets shortly.

     She has been positive towards the stock markets since 1991, but stated in February that investors would be smart to hedge their portfolios. The trend was bullish and the markets could still rise a few more per cent, but several of her indicators showed attenuation. In addition, we should grant our technical analyst Neeter the credit he deserves. In the issue of January 4th, he indicated that the first candidates to reap profit had revealed themselves (Aegon, Elsevier and Wolters-Kluwer).

      But back to Mrs Koornwinder. In Beleggers Belangen of March 25th, she tightened her advice to individuals to reap their profit. Good advice. Amsterdam reached its top at the end of January with an AEX index of 439 and, in the final week of March, we were back to 415.

      Mrs Koornwinder sent us a list of the performance of the AEX funds that speaks for itself, while remarking the following: “In order to determine the CORPORATE value (being the intrinsic value) of a company, an accounting analysis is required in which the evaluation of the quality of the management, the investment level, the industry and the location in the industry, the political situation, etc, are of importance. As the crash of October 1987 has taught us, the STOCK value of a company can drop 30% or more. To this end, a force field of a higher rank, including the stock market sentiment, needs to be analysed. This is science and technology.”

      The analysts who used to be very condescending with regard to her predictions, but who have missed the mark significantly themselves by now, can learn a thing or two from this. The fact that ‘hedging’, in other words, protecting, a portfolio is useful, and that profit can be made in a bear market, is evident from the overview of the put prices (she recommended her clients October puts) of the end of January and now.

      Hindsight is nice, certainly if it proves that you were right all along but, for an investor, the only question that matters is: how do we proceed? Mrs Koornwinder does not want to predict on the extent to which the stock market will fall back, however, as she is yet to discover any buy signals.

19940701



19940701



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Technical analysis warranty accountant versus the non-believers

1994-11-18, Het Financieele Dagblad

Koornwinder Chart Guidance (KCG), the financial economic consultancy run from the home of the Dutch Mrs Herma M C Koornwinder, which specialises in the technical analysis of exchange rates and indices, disposes of the idea of a crystal ball.

     It has even been put in writing and signed by special trustee Mr A C M J van der Sloot from the renowned accountancy agency Deloitte & Touche. He has verified which of KCG’s predictions (Mrs Koornwinder herself prefers the term ‘visions’) were accurate. They actually do come true. His conclusion: ‘Foregoing summary shows that KCG has, at key moments, published expectations regarding aforementioned indices that have later been affirmed by the rate developments.’ Said summary describes the methodology Deloitte & Touche has used to verify, in retrospect, if the predictions Koornwinder made beforehand were accurate. Aforementioned indices are the EOE index and bond index of Amsterdam, the New York Dow Jones index, the Hang Seng index of Hong Kong and the Japanese Nikkei index.

     Recognition. In capital letters with exclamation mark. Koornwinder has been fighting against disbelief and suspicion for years. An earlier article in this newspaper, dated November 1990, about her activities, which was published in light of the ‘Day of the Share’, uses terms such as abracadabra, crystal ball, fortune-telling and ‘graphs that resemble a cardiogram’. Later articles in other publications are time and again full of doubt: can it really be true, and if so, how does it work? This is partly caused by the jargon technical analysts such as Koornwinder use. And even though Koornwinder has learned through the years how to communicate her visions as clearly and simply as possible, explaining what she does remains a very abstract matter for outsiders. Another obstacle for the suspicious outsider is that Koornwinder keeps part of her method to herself. She refers to her ‘indicators’, but does not reveal of what exactly these consist.

     Everybody would love to be able to predict what is to happen on the financial markets in future times. One could make loads of money with this knowledge. Experts trying to predict the financial markets can be roughly divided into two movements: the fundamentalists and the technical analysts. The majority still consists of fundamentalists, but technical analysis is gaining ground. The emergence of computers definitely contributed to this since, apparently, it makes it easy to translate historical number sequences into graphs, which often form the basis of technical analysis. For that matter, the boundaries between the movements are not necessarily that rigid. There are those who combine the two.

     Fundamentalists search for the how and why in the world of economics and finance; they search for what is behind the interest development, currency ratio and trade balances of the macro economy, as well as companies’ cash flows and statements of profit and loss, in order to deduce how things should logically progress. Technical analysts find their reality in financial-economical number sequences translated into graphs, the interplay of lines that can be found therein, and the future consequences that will result from those lines. Koornwinder refers to her current activities with the term ‘trend-watching’. Trends have a predictive value. They start off small, but can grow both in strength and dimension. Her favourite image is that of a tsunami, the dreaded tidal wave at sea that started somewhere as just a tiny ripple. The art of the analysis that Koornwinder practises is to detect that tiny ripple as early as possible.

     She describes the basis of her activities in her own words as ‘a symbiosis of fundamental and qualitative analysis complemented with a thorough knowledge of classical and modern technical analysis’. When comparing the foregoing quote to statements she made several years ago, one cannot help but feel that her current approach leaves more room for fundamental analysis, whereas earlier she counted herself among the purists of technical analysis. Both the fundamental and technical analyses have their shortcomings, which is why she uses a combination of the two, assuming that the past is the only thing to go by for any analyst. That past is captured in number sequences which can be used to draw up graphs that show undulating movements. These undulations are not random, but driven by an underlying field of antagonistic forces which are partly caused by the investor’s psychology. That is how it works. Sort of...

     But does it actually work? Yes, is the conclusion of the special trustee of Deloitte & Touche. Koornwinder herself commissioned the research. A close acquaintance at Erasmus University in Rotterdam had suggested it to her, again with the intention of finally proving to all those critics that she was right. Saying afterwards that you predicted the crash of October 1987 is not exactly convincing. It immediately reminds one of a known statement: predicting is difficult, especially when it concerns the future. Anyone can predict the future when it has already happened.

     This element can be found in the way Deloitte & Touche has compared her predictions (‘visions’) between 1989 until 1994 against reality; in their words ‘how the expectations Koornwinder Chart Guidance has published in various ways, regarding the rate developments of certain stock exchanges, have compared to the actual rate developments of said stock exchanges’.

     The report is based on expectations chronologically recorded by KCG itself. But, subsequently, the accountant has verified if ‘the text of these recordings corresponds to the expectations made on the respective dates’. For example, in monthly analyses distributed to clients, or in incidental interviews or publications in investment sections or magazines. In other words, the accountant has checked that she did not afterwards adjust or backdate her predictions.

     Subsequently, the accountant verified which communicated expectations were and which were not ‘confirmed by the rate development that actually took place after the date KCG communicated its expectation’. The accountant did not study and consider each expectation separately, but ‘in their mutual cohesion during the entire period to which our research pertained’. Furthermore, he paid special attention to expectations ‘that were published around the date on which trend changes took place’.

     Well, as mentioned before, that has resulted in his conclusion that Koornwinder Chart Guidance ‘has, at key moments, published expectations that have later been affirmed by the rate developments’. After that the accountant has also, in the same way, compared a number of theoretical portfolios that KCG composed against reality and, again, the conclusions were favourable for Koornwinder. Among these were four mixed and global portfolios. They were compared to a world index calculated by Morgan Stanley in the US. The first made a 28.18% profit during the period of analysis and was compared to the world index which increased by 21.65% during the same period. KCG’s other three mixed portfolios also outperformed this world index: plus 7.07% versus 4.58%, 10.89% versus 0.12% and 17.35% versus 6.10%. Only one Dutch portfolio of KCG (plus 26.24%) was unable to outperform the Amsterdam EOE index (plus 26.28%).

     Encouraged by these results, Mrs Koornwinder now makes bold to state: on the one hand, the man in the street has been forced to make financial sacrifices for many years due to cutbacks. On the other hand, the performance of pension funds could be much better than it is today. Would certain cutbacks even be necessary if those institutional investors handled our money in a more ‘innovative’ way, provided that they were granted permission to do so? Koornwinder thinks such cutbacks could be avoided. She does not mention to whom she thinks these institutes should turn for advice about innovative investing. The mere suggestion says it all.



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Day of the stock

1994-11-18, Het Financieele Dagblad

Today, a forum of managers is discussing the theme ‘Flotation: yes or no?’ during the Day of the Stock in Amsterdam Without a doubt an interesting subject and very topical given the number of emissions on the stock market this year and the number that is still to follow according to many people.

      Still, a lot of Dutch people are wondering: “Investor, yes or no?” The answer might not be hard for some in light of the ample choice in investment funds. However, others may need a new ‘challenge’ and feel like exploring the stock market on their own, through their investment fund. In the accompanying articles, we will try to define ‘the investor’. There are over 700,000 investors in the Netherlands, but the description of these men and women is vague. What is his investment strategy based on and what truly annoys her?

      In concurrence with the theme of the Day of the Stock it is relevant what the investor thinks of the recent emissions. What does his favourite emission look like and how will he be persuaded? In addition, Willem Vermeend, State Secretary, reveals what the investor can expect financially of a purple administration. How about an ‘analytic tax system’? We will also touch upon what the modern investor is interested in. Through an article about the level of truth of technical analysis, a glimmer of clarity is provided amidst the mix of theories that promise investors a great return. For insiders: Mrs H. Koornwinder is finally proved right.

      Moreover, we will discuss the way the investor invests. Investing with use of the new trade system of the stock market requires some adjustment in the provision of orders. However, for now, it is not going to be any cheaper.



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’Investment of public money generates too little return’
’Stock market guru’ Herma Koornwinder is often right

1994-12-17, Brabants Dagblad

By Chris Paulussen

Dutch Herma Koornwinder saw – somewhat to her own surprise – the stock market crash of October 1987 coming. Since then her controversial predictions have been right virtually every time. However, the financial world remained sceptical. Thus she decided to have her work of the past five years investigated by accountants Deloitte & Touche. They came to the conclusion that the expectations Koornwinder published on critical moments were confirmed by the rate developments.

      Money is scarce. The government forces citizens to tighten their belts year after year. All of this would not be necessary if that same government, which is so full of new technologies, would have an eye for investment technology. In that case, money managed by the government would generate hundreds of millions more in return. This is something in which Herma Koornwinder firmly believes. She points to the increasingly ageing population. Research by accountancy agency Coopers & Lybrand recently indicated that old-age benefits were starting to become unaffordable. At the same time, every additional percent of return over capital managed by pension funds would result in a decrease of the premiums by many percent.

      Modern management theories should enter the investment world, according to Koornwinder. Take the ‘just in time’ principle. “Money that does not move is dead money - a waste of supply,” she confidently states. “Public funds are very poorly managed. Profit can be improved dramatically by using investment technology. Just the fact that I continually outperform Robeco with a handful of enthusiastic people!”

     Bold prognoses

     However, banks and institutional investors (pension funds and insurance companies) are not easily convinced. Not even by the fact that Koornwinder often turns out to be right. Bold prognoses are not always appreciated. During a short time employed by a capital manager, a colleague told her to be careful when she predicted a bullish trend against popular belief.

      Koornwinder was expressing her views very loudly in 1989. “But when you are trying to convince investors that their investment methods can be improved, you suddenly run into a wall of bureaucracy. All of a sudden it turns out to be very difficult to achieve a breakthrough with a new vision.” “The proof of the pudding is in the eating,” an ABP president wrote in a friendly note to Koornwinder - freely translated as: seeing is believing.

      In hindsight, she can somewhat understand the doubts. After all, she herself was surprised when she turned out to be right in 1987 when she predicted the stock market crash. “Back then, I was not even active professionally. Could it be a coincidence that I reached a different analysis than the financial calculators? I decided to study some more and I discovered that banks and pension funds often had a different view of the market, due to their old, traditional methods.”

      She decided to allow herself five years to test her vision. “I was met with so much criticism and resistance that I wondered if I was not wrong after all. Or was I right and did I simply approach the financial world from a unique perspective? I decided that, at the least, it was worthwhile to test it. If, after five years, my system turned out to be faulty, I could still take up golfing.”

19941217 

Prognosis KCG versus Amsterdam EOE Index. (KCG later became KGMN).

      Disbelief

     That five-year period has come to an end. And she did not get around to playing golf much. As of January 1st 1990, Koornwinder started her own consultancy (Koornwinder Chart Guidance) with one regular employee and a handful of people helping out. KCG mainly focuses on large clients, companies and pension funds.

      Slowly, Koornwinder established her name in the financial world. Clients eagerly looked forward to the buy and sell advices of KCG, which were accurate to a tenth. But she also learned that the large clients were not waiting in line. She still encounters much disbelief with her prognoses which are often very different from mainstream beliefs. Because, surely the planning agencies, the OECD, the large banks and investment bodies know better! When she confronts bankers and investment experts with the fact that she was right, they all of a sudden turn out to have very short-term memories.

      That is why Koornwinder had her work of the past five years verified by the accountants Deloitte & Touche. “It took the accountant ten months to go through everything in detail. It looked as if I was being audited by the Inland Revenue. All my statements and analysis were compared to the graphs of the main stock markets. They also checked if I did not issue a sell advice during an upward wave.”

      The conclusion of the research was that Koornwinder, “published expectations on critical moments, which were confirmed by the rate developments”. In addition, the accountants confirmed that Koornwinder, with her model portfolios, had consistently outperformed the world index, the indexes of the stock markets of New York (Dow Jones), Tokyo (Nikkei), Hong Kong (Hang Seng) and Amsterdam (AEOE) and even investment giant Robeco.

      The most important prognoses of Koornwinder at a glance:

      After she was right with regard to her prognosis of the stock market crash in 1987, she reported the first positive signals before the end of the same year, against popular belief. In the course of 1988, it became apparent that her system was not flawless when she issued a sell advice twice which she quickly corrected by issuing buy advice. At the beginning of 1989 she predicted another large upward wave. “That was a bold move,” she says in hindsight, “because many people were expecting a second large decrease.” As of August 17th 1989, her advice became less positive. On September 27th she stated that if the indicators attenuated further, the rate target would be set at 280.

      In January 1990, she approached banks, investors and journalists with her prognosis that a considerable decrease in the AEOE index was imminent. Hardly anyone was prepared to listen to her prediction that the index of the Amsterdam stock market would drop from about 280 to 230 points. “Everybody was positive. It was the time that Lubbers, as prime minister, was talking about the ‘happiest of days’, the Berlin wall had fallen, the Cold War was ending and Eastern Europe had opened its borders.”

      Exactly one year later, in January 1991, just before the start of the Gulf War, the index was at 230. It was then that Koornwinder - again against popular belief - issued buy advice. While the OECD became increasingly negative about the economic growth, the Dutch government body for economic planning reported major setbacks and analysts predicted rough weather, she stuck to a rate target of 345 for the AEOE.

      Even after the index surpassed the 400 points at the end of 1993, Koornwinder remained positive. It was not until the beginning of this year that the situation reversed. “In mid-January – the newspapers were filled with full-page ads in which everyone was invited to buy stock – I called the editorial office of the magazine Beleggers Belangen in the presence of an accountant from Deloitte & Touche, and predicted that after a rise of a couple more percent, there would be a considerable counter-pressure.”

      At the end of January, KCG’s clients received a fax giving advice to hedge. In other words, to protect themselves from rate fluctuations with term transactions. On January 31st, the AEOE index reached its highest level at 438.7 points. Since then, Koornwinder’s advice is “sell”, and she has had no reason to deviate from that. In addition, she was one of the few analysts who did not consider the increase in interest to be an interest bump at the beginning of this year.

     Drudgery

     According to Koornwinder, the power of her work method lies in tracking the developments in the financial market to an almost microscopic level. Globally, she carefully tracks 800 funds in 22 countries, the international currencies, the interest and raw materials, such as oil, gold and wheat. It is sheer drudgery that has led to many cabinets filled with files. But that is not all. Koornwinder: “There is much interdependence with other disciplines, such as politics, philosophy, macrobiotics, sociology and, of course, mass psychology. There are countless values I take into consideration and which I try to capture in formulas. My global scan helps me keep everything under control and monitor the market. That is my strength.”

      Technical analysis plays a large part in Koornwinder’s work. She uses it to map the development of her indicators. “But technical analysis alone is not enough; it is just an aid to track the developments.” She makes the comparison to a patient who visits the doctor: “Someone can be suffering from a stomach ache while still looking healthy from the outside. Only the scanner can prove that things are looking bad. The same applies to the market, the stock markets and the economy. You could say that the economy has two faces: one face everyone can see on a daily basis and the other one becomes visible through my ‘world scan’ which often deviates from the information provided to investors.”

      According to Koornwinder, the economy has seasons and tides, just as the weather and the sea. She believes the trick is to perceive the mainstream. “The tsunami, the huge tidal wave, so feared in Japan, starts as a ripple. To be able to predict the tsunami, you need to recognise the right ripples and ignore the others. Just like the tsunami, major events cast their shadows forward. If you manage to get these on your radar, you have come a long way. That is the way the KCG system works.”

     Fascinated

     Koornwinder has always been fascinated by the financial markets. She can still recall the amazement of her father-in-law when he saw her spelling out the financial pages of the newspaper. “But I could not figure it out. Whenever I thought the rates would go up, they went down. Good news turned out to have already been discounted in the rates.” She also fell under the spell of technical analysis. The arrival of the computer was a blessing. With the press of a button, it was now possible to create the most complex graphs, formulas and calculations. “I was obsessed by it; I could not let it go. I read everything I could get my hands on, about politics, economy and management.”

      In her residence in Heeze, far away from the hurly-burly of the financial centres, she studied and collected enormous amounts of data. Gradually, Koornwinder learned to recognise trends which helped her to develop her own investment technology. She believes it might have helped that she was raised in a family of entrepreneurs and thus used to think in a businesslike manner, as well as the fact that she accompanied her husband, the president of a company, to trade shows with a view to spotting new trends. And that she, like every mother, continually tried to put herself in someone else’s shoes. “Maybe my self-study and search subconsciously led to a different way of thinking than students who are taught in the traditional way of thinking.”

     Inconceivable

     Koornwinder is merciless towards a recent study which claimed it was impossible to systematically achieve good investment returns. “Is that not exactly what I am doing?” she says. “I am baffled that institutional investors accept a return that is equal to the index this easily. After all, this means that if the index drops, the performance drops as well. The same people who run outside to save the pillows of their garden furniture from the rain let their money drop in value with a resignation that I simply cannot understand.”

      With the accountants’ report in hand, Koornwinder tries to put her investment technology in the spotlight. She indicates an editorial comment in an Eindhoven newspaper of 101 years ago, regarding the establishment of Philips & Co. The newspaper wrote: “We hope that the Dutch government, and with it the various municipalities, will be open to these new technological developments and that they will promote all other technological innovations in the same spirit. They are worth it.”

      “Just like Philips a hundred years ago, I am now advocating my technology,” Koornwinder says. “We are entering the era of the knowledge technology, the time of artificial intelligence. I am convinced that the results of other people’s explorations will have as much trouble finding willing ears as mine are having.”



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Daring prognoses often spot on
Koornwinder advocates ’investment technology’

1994-12-17, Eindhovens Dagblad

By Chris Paulussen

Dutch Herma Koornwinder saw – somewhat to her own surprise – the stock market crash of October 1987 coming. Since then her controversial predictions have been right virtually every time. However, the financial world remained sceptical. Thus she decided to have her work of the past five years investigated by accountants Deloitte & Touche. They came to the conclusion that the expectations Koornwinder published on critical moments were confirmed by the rate developments.

      Money is scarce. The government forces citizens to tighten their belts year after year. All of this would not be necessary if that same government, which is so full of new technologies, would have an eye for investment technology. In that case, money managed by the government would generate hundreds of millions more in return. This is something in which Herma Koornwinder firmly believes. She points to the increasingly ageing population. Research by accountancy agency Coopers & Lybrand recently indicated that old-age benefits were starting to become unaffordable. At the same time, every additional percent of return over capital managed by pension funds would result in a decrease of the premiums by many percent.

      Modern management theories should enter the investment world, according to Koornwinder. Take the ‘just in time’ principle. “Money that does not move is dead money - a waste of supply,” she confidently states. “Public funds are very poorly managed. Profit can be improved dramatically by using investment technology. Just the fact that I continually outperform Robeco with a handful of enthusiastic people!”

      However, banks and institutional investors (pension funds and insurance companies) are not easily convinced. Not even by the fact that Koornwinder often turns out to be right. Bold prognoses are not always appreciated. During a short time employed by a capital manager, a colleague told her to be careful when she predicted a bullish trend against popular belief.

      Koornwinder was expressing her views very loudly in 1989. “But when you are trying to convince investors that their investment methods can be improved, you suddenly run into a wall of bureaucracy. All of a sudden it turns out to be very difficult to achieve a breakthrough with a new vision.”

      “The proof of the pudding is in the eating,” an ABP president wrote in a friendly note to Koornwinder - freely translated as: seeing is believing. In hindsight, she can somewhat understand the doubts. After all, she herself was surprised when she turned out to be right in 1987 when she predicted the stock market crash. “Back then, I was not even active professionally. Could it be a coincidence that I reached a different analysis than the financial calculators? I decided to study some more and I discovered that banks and pension funds often had a different view of the market, due to their old, traditional methods.”

      She decided to allow herself five years to test her vision. “I was met with so much criticism and resistance that I wondered if I was not wrong after all. Or was I right and did I simply approach the financial world from a unique perspective? I decided that, at the least, it was worthwhile to test it. If, after five years, my system turned out to be faulty, I could still take up golfing.”

      That five-year period has come to an end. And she did not get around to playing golf much. As of January 1st 1990, Koornwinder started her own consultancy (Koornwinder Chart Guidance) with one regular employee and a handful of people helping out. KCG mainly focuses on large clients, companies and pension funds.

 19941217 

Prognosis KCG versus Amsterdam EOE Index. (KCG later became KGMN).

       Slowly, Koornwinder established her name in the financial world. Clients eagerly looked forward to the buy and sell advices of KCG, which were accurate to a tenth. But she also learned that the large clients were not waiting in line. She still encounters much disbelief with her prognoses which are often very different from mainstream beliefs. Because, surely the planning agencies, the OECD, the large banks and investment bodies know better! When she confronts bankers and investment experts with the fact that she was right, they all of a sudden turn out to have very short-term memories.

      That is why Koornwinder had her work of the past five years verified by the accountants Deloitte & Touche. “It took the accountant ten months to go through everything in detail. It looked as if I was being audited by the Inland Revenue. All my statements and analysis were compared to the graphs of the main stock markets. They also checked if I did not issue a sell advice during an upward wave.”

      The conclusion of the research was that Koornwinder, “published expectations on critical moments, which were confirmed by the rate developments”. In addition, the accountants confirmed that Koornwinder, with her model portfolios, had consistently outperformed the world index, the indexes of the stock markets of New York (Dow Jones), Tokyo (Nikkei), Hong Kong (Hang Seng) and Amsterdam (AEOE) and even investment giant Robeco.

      The most important prognoses of Koornwinder at a glance:

      After she was right with regard to her prognosis of the stock market crash in 1987, she reported the first positive signals before the end of the same year, against popular belief. In the course of 1988, it became apparent that her system was not flawless when she issued a sell advice twice which she quickly corrected by issuing buy advice. At the beginning of 1989 she predicted another large upward wave. “That was a bold move,” she says in hindsight, “because many people were expecting a second large decrease.” As of August 17th 1989, her advice became less positive. On September 27th she stated that if the indicators attenuated further, the rate target would be set at 280.

      In January 1990, she approached banks, investors and journalists with her prognosis that a considerable decrease in the AEOE index was imminent. Hardly anyone was prepared to listen to her prediction that the index of the Amsterdam stock market would drop from about 280 to 230 points. “Everybody was positive. It was the time that Lubbers, as prime minister, was talking about the ‘happiest of days’, the Berlin wall had fallen, the Cold War was ending and Eastern Europe had opened its borders.”

      Exactly one year later, in January 1991, just before the start of the Gulf War, the index was at 230. It was then that Koornwinder - again against popular belief - issued buy advice. While the OECD became increasingly negative about the economic growth, the Dutch government body for economic planning reported major setbacks and analysts predicted rough weather, she stuck to a rate target of 345 for the AEOE.

      Even after the index surpassed the 400 points at the end of 1993, Koornwinder remained positive. It was not until the beginning of this year that the situation reversed. “In mid-January – the newspapers were filled with full-page ads in which everyone was invited to buy stock – I called the editorial office of the magazine Beleggers Belangen in the presence of an accountant from Deloitte & Touche, and predicted that after a rise of a couple more percent, there would be a considerable counter-pressure.”

      At the end of January, KCG’s clients received a fax giving advice to hedge. In other words, to protect themselves from rate fluctuations with term transactions. On January 31st, the AEOE index reached its highest level at 438.7 points. Since then, Koornwinder’s advice is “sell”, and she has had no reason to deviate from that. In addition, she was one of the few analysts who did not consider the increase in interest to be an interest bump at the beginning of this year.

     According to Koornwinder, the power of her work method lies in tracking the developments in the financial market to an almost microscopic level. Globally, she carefully tracks 800 funds in 22 countries, the international currencies, the interest and raw materials, such as oil, gold and wheat. It is sheer drudgery that has led to many cabinets filled with files. But that is not all. Koornwinder: “There is much interdependence with other disciplines, such as politics, philosophy, macrobiotics, sociology and, of course, mass psychology. There are countless values I take into consideration and which I try to capture in formulas. My global scan helps me keep everything under control and monitor the market. That is my strength.”

      Technical analysis plays a large part in Koornwinder’s work. She uses it to map the development of her indicators. “But technical analysis alone is not enough; it is just an aid to track the developments.” She makes the comparison to a patient who visits the doctor: “Someone can be suffering from a stomach ache while still looking healthy from the outside. Only the scanner can prove that things are looking bad. The same applies to the market, the stock markets and the economy. You could say that the economy has two faces: one face everyone can see on a daily basis and the other one becomes visible through my ‘world scan’ which often deviates from the information provided to investors.”

      According to Koornwinder, the economy has seasons and tides, just as the weather and the sea. She believes the trick is to perceive the mainstream. “The tsunami, the huge tidal wave, so feared in Japan, starts as a ripple. To be able to predict the tsunami, you need to recognise the right ripples and ignore the others. Just like the tsunami, major events cast their shadows forward. If you manage to get these on your radar, you have come a long way. That is the way the KCG system works.”

     Koornwinder has always been fascinated by the financial markets. She can still recall the amazement of her father-in-law when he saw her spelling out the financial pages of the newspaper. “But I could not figure it out. Whenever I thought the rates would go up, they went down. Good news turned out to have already been discounted in the rates.” She also fell under the spell of technical analysis. The arrival of the computer was a blessing. With the press of a button, it was now possible to create the most complex graphs, formulas and calculations. “I was obsessed by it; I could not let it go. I read everything I could get my hands on, about politics, economy and management.”

      In her residence in Heeze, far away from the hurly-burly of the financial centres, she studied and collected enormous amounts of data. Gradually, Koornwinder learned to recognise trends which helped her to develop her own investment technology. She believes it might have helped that she was raised in a family of entrepreneurs and thus used to think in a businesslike manner, as well as the fact that she accompanied her husband, the president of a company, to trade shows with a view to spotting new trends. And that she, like every mother, continually tried to put herself in someone else’s shoes. “Maybe my self-study and search subconsciously led to a different way of thinking than students who are taught in the traditional way of thinking.”

      Koornwinder is merciless towards a recent study which claimed it was impossible to systematically achieve good investment returns. “Is that not exactly what I am doing?” she says. “I am baffled that institutional investors accept a return that is equal to the index this easily. After all, this means that if the index drops, the performance drops as well. The same people who run outside to save the pillows of their garden furniture from the rain let their money drop in value with a resignation that I simply cannot understand.”

      With the accountants’ report in hand, Koornwinder tries to put her investment technology in the spotlight. She indicates an editorial comment in an Eindhoven newspaper of 101 years ago, regarding the establishment of Philips & Co. The newspaper wrote: “We hope that the Dutch government, and with it the various municipalities, will be open to these new technological developments and that they will promote all other technological innovations in the same spirit. They are worth it. Just like Philips a hundred years ago, I am now advocating my technology,” Koornwinder says. “We are entering the era of the knowledge technology, the time of artificial intelligence. I am convinced that the results of other people’s explorations will have as much trouble finding willing ears as mine are having.”



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Spotlight on women and technology

1995-01, Kijk op vrouwen en techniek

Foreword

The initiative taken by the network entitled ‘Women & Technology’ seems to be a special opportunity for young female students who have to choose both their study and their course package to personally meet women who have either followed a technical study or a career in technology. This means that girls who follow higher secondary education are given the opportunity to see in which way they actually identify with these women. Opening these networks gives them a chance to discover just how many more opportunities there are in technology-oriented jobs than they could have ever expected. It is an experience far beyond anything they could have expected from any other source of information.

     For any dean, this initiative is a welcome extension of an information package across the gender barrier and I do hope that the vast number of enquiries from deans will make complete and exhaustive use of the female network.

Rens van Veden, Dean of Secondary Education, Isendoorn College, Warnsveld.

It was a pleasant surprise to be asked to write a short contribution for ‘Spotlight on Women and Technology´ in connection with the 1995 VB trophy for Europe Combined Terminals (ECT), for which we gladly oblige, as we would very much welcome a higher influx of women into our business. This is a unique opportunity for us to present to the wider public our vision of women in business.

     ECT, a ’high-tech’ company specializing in container transfer, located in the port of Rotterdam, has so far been considered a real male domain. Apart from being leaders in all aspects of technology, we pride ourselves in being leaders in good industrial and social relations, outstanding employment conditions, and flat hierarchy with much teamwork. In brief, the human aspect is a core point in our organization. Out of some 2,500 ECT staff, 100 are female, and the intention is to build on this.

     You will no doubt ask why? Well, very simply because of our positive experience with female influence on a team in an otherwise male-dominated area. This shows in better and more polite language being used and fewer power games being played. Another positive aspect is less bickering, which is much appreciated by males, too. We believe that concentrating on males alone causes a 50% loss in intellectual potential in society.

     Why are so few women working for ECT? An important reason is the stevedore legislation, which does not provide for work continuity among women, whilst ECT runs 24/7, all year round. However, since 1992, women do have the right to continuous work and whilst we would like to hire them, we get a relatively poor response to our advertisements. It is ECT policy to hire on merit and not by preference, i.e. we choose for quality. In practice, this means that we choose the candidates with the best qualifications and most suitable experience. Yet, if out of 100 applicants only two are female, the chance of them being hired is, at least statistically speaking, relatively small.

     Working at ECT should be a happy experience. Working for a company in the technology sector requires technology-oriented and similarly educated and trained people. They should at least be technically minded. Such a background naturally comes with a certain way of thinking or reasoning, and flexibility. Being able to work with constantly changing models provides a solid basis for analyzing the processes on the terminal, leaving more time for the really interesting work: managing or solving challenging problems.

     Studies or training in more mathematical subjects are a basic requirement for any potential ECT candidate, whether they are general managers guiding and motivating people or specialists. Specialists are constantly improving technical installations, and connections between machinery, equipment, installations and staff, the latter being called robotics.

     In our opinion, women are not aware enough of the tremendous opportunities in a technical business, where they can grow broadly and develop their full potential. It is the women themselves who limit their own opportunities by choosing very non-exact study courses, and we hope that we have been able to raise the interest of a number of women.

Hans Becht (Head - Technical Maintenance & Services)

Fred Jamin (Manager - Terminal)

A Remarkable Woman in the World of Investments

Herma Koornwinder

Herma Koornwinder is a remarkable woman who found her own way through the financial world as a revolutionary. As far as she can remember Herma Koornwinder always went over the financial pages in the newspaper, paying special attention to reports about companies, financial markets and market developments. Time and again, she noticed with amazement that the media reported a rise of a stock market when reality proved just the opposite.

19950100     Herma is a naturally inquisitive person and, with her strong sense of perseverance, she put herself to thoroughly investigating the subject to find out how markets develop and which factors are important in determining changes. For many years, she studied theories of economics, market developments and other information. Slowly, she started to realize that there had to be more to it than the elements of standard investment models that determined certain changes.  After all, investment strategies based on these models often gave returns below the average profit point (=index), and this had to change – and for the better, too.

     Thanks to modern technology, information is not only more readily available but is also more reliable, and if it is already being used in the existing financial models there is, on the whole, thought to be no need for further thorough testing of this information. However, not so for Herma – she treats every piece of information as a probability. Each piece of information needs to be tested for its reliability and correctness before it is ready to be used in a model and, as she discovered, much financial information in use is neither reliable nor correct. Herma works with the figures such that they reflect reality. Her approach is based on the assumption that there are not six but seven constants that determine market changes. According to her strong conviction, there are many more factors beyond the purely financial that play a role in the world of investments.

     Herma developed her own investment model, on which she bases her investment advice, and it has shown to give better returns than any conventional model, the reason being that her model takes into consideration very many factors and, with the large amounts of information she needs for her work, she has now taken on computer technology, information technology and knowledge technology to handle the vast and complex information she has to use in her work. Whilst she learned through trial and error, she first needed to acquire the computer skills which opened to her the possibilities of modern information technology as a tool for her work. She first had to develop her own model that was sophisticated enough to handle the large number of variable factors with which she had to work. It all sounds so easy, but it took many years of unabated hard work. Literature research, studying literature references, finding documentation, testing computer programmes, trying out different methods to provide certain proof: it was altogether a real issue of blood, sweat and tears.

     Herma did not hesitate to go along the electronic highway and introduce all its benefits and possibilities into her work and she is convinced that anyone who wants to be good in this business simply needs to work with this phenomenon.  Particularly women need to watch out so as not to miss the boat and their own opportunities in life which could happen if they do not overcome their reservations and fear of the medium. With the electronic highway you can have the whole world in your own living room and you are well advised to ensure you are.



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‘Invisible’ economy casts its shadow forward
Accountant confirms reliability of Koornwinder’s stock market predictions

1995-01-10, Eindhovens Dagblad

By Chris Paulussen

HEEZE

Dutch Herma Koornwinder saw – somewhat to her own surprise – the stock market crash of October 1987 coming. Since then her controversial predictions have been right virtually every time. However, the financial world remained sceptical. Thus she decided to have her work of the past five years investigated by accountants Deloitte & Touche. They came to the conclusion that the expectations Koornwinder published on critical moments were confirmed by the rate developments.

      That which is common in the industry can be very fruitful in the financial sector. Modern management theories need to enter the investment world, according to Herma Koornwinder. Take the ‘just in time’ principle. “Money that does not move is dead money - a waste of supply,” she confidently states. “Public funds are very poorly managed. Profit can be improved dramatically by using investment technology. Just the fact that I continually outperform Robeco with a handful of enthusiastic people!”

      People who have their own vision face much skepticism in the financial word. Koornwinder was expressing her views very loudly in 1989. “But when you are trying to convince investors that their investment methods can be improved, you suddenly run into a wall of bureaucracy. All of a sudden it turns out to be very difficult to achieve a breakthrough with a new vision.”

      In hindsight, she can somewhat understand the doubts. After all, she herself was surprised when she turned out to be right in 1987 when she predicted the stock market crash. “Back then, I was not even active professionally. Could it be a coincidence that I reached a different analysis than the financial calculators? I decided to study some more and I discovered that banks and pension funds often had a different view of the market, due to their old, traditional methods.”

      She decided to allow herself five years to test her vision. “I was met with so much criticism and resistance that I wondered if I was not wrong after all. Or was I right and did I simply approach the financial world from a unique perspective? I decided that, at the least, it was worthwhile to test it. If, after five years, my system turned out to be faulty, I could still take up golfing.” As of January 1st 1990, Koornwinder started her own consultancy (Koornwinder Chart Guidance) with one regular employee and a handful of people helping out. KCG mainly focuses on large clients, companies and pension funds.

     Disbelief

     Slowly, Koornwinder established her name in the financial world. Clients eagerly looked forward to the buy and sell advices of KCG, which were accurate to a tenth. But she also learned that the large clients were not waiting in line. She still encounters much disbelief with her prognoses which are often very different from mainstream beliefs. Today, she counters this with the findings of accountancy agency Deloitte & Touche, which verified five years of consultancy work and reached the conclusion that Koornwinder, ‘published expectations on critical moments, which were confirmed by the rate developments’.

      In addition, the accountants confirmed that Koornwinder, with her model portfolios, had consistently outperformed the main stock market indexes and even investment giant Robeco.

     Against the current

     In the past couple of years, Koornwinder has often issued advice that turned out to be correct. She predicted – just as in 1987 – the major correction on the Amsterdam stock market at the beginning of 1990, which actually occurred. And – again against popular belief – she was very positive about the stock market until the beginning of this year. At the end of January she gave in, in hindsight at the highest level of the market, and she does not see any signals that make her want to revise her sell advice.

      According to Koornwinder, the power of her work method lies in tracking the developments in the financial market to an almost microscopic level. Globally she carefully tracks 800 funds in 22 countries, the international currencies, the interest and raw materials such as oil, gold and wheat. It is sheer drudgery that has led to many cabinets filled with files.

      But that is not all. Koornwinder: “There is much interdependence with other disciplines, such as politics, philosophy, macrobiotics, sociology and, of course, mass psychology. There are countless values I take into consideration and which I try to capture in formulas. My global scan helps me keep everything under control and monitor the market. That is my strength.”

      She makes the comparison to a patient who visits the doctor: “Someone can be suffering from a stomach ache, while still looking healthy from the outside. Only the scanner can prove that things are looking bad. The same applies to the market, the stock markets and the economy. You could say that the economy has two faces: one face everyone can see on a daily basis and other one becomes visible through my ‘world scan’ which often deviates from the information provided to investors.”

      According to Koornwinder, the economy has seasons and tides, just as the weather and the sea. She believes the trick is to perceive the mainstream. The tsunami, the huge tidal wave, so feared in Japan, starts as a ripple. To be able to predict the tsunami, you need to recognise the right ripples and ignore the others. Just like the tsunami, major events cast their shadows forward. If you manage to get these on your radar, you have come a long way. That is the way the KCG system works.”

      Koornwinder is merciless towards a recent study which claimed it was impossible to systematically achieve good investment returns. “Is that not exactly what I am doing?” she says. “I am baffled that institutional investors accept a return that is equal to the index this easily. After all, this means that if the index drops, the performance drops as well. The same people who run outside to save the pillows of their garden furniture from the rain let their money drop in value with a resignation that I simply cannot understand.”



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Innovation investment models required
Analyst Koornwinder pleads for renewal

1995-02-25, Eindhovens Dagblad

By our financial editorial office

HEEZE

“Banks should do more than just innovating their corporate organisation. They need to focus on investment research and investment innovation as well”, states Dutch global chartist Herma Koornwinder. Koornwinder has been expressing for years that banks and investment bodies approach the market in a too unilateral fashion. She is now backed-up by analysts of Iris, the research institute of investment giant Robeco, who conclude in weekly magazine Beursplein 5, that certain economic models have side tracked the economists in 1994. The Iris analysts state that different indicators need to be found for the so-called hedge funds and that, until then the economists need to go by their intuition.

      “Years ago, I reached the same conclusion. I realised that the economy is the result of thousands of decisions. Maybe economists were using a wrong list of questions and therefore wrong indicators? After years of study into the force fields of the macro-economy, the psychology of the investor and the global flow of capital, Koornwinder discovered that one needs to approach the markets from multiple angles and in a multidisciplinary fashion.

      “The fact that the market does not always work the way people expect, is not necessarily caused by the interest or the dollar. Other things might have caused it” says Koornwinder. “For example: the dogma that a low dollar rate is bad for the stock market is outdated. In exactly ten years, the dollar has dropped with 57.63%, while the AEX index rose 102.49%.”

     Acceleration

     Koornwinder feels it is about time that banks realise they need to start innovating in order to perform well consistently. “The traditional work method no longer suffices. We are entering the era of knowledge technology: we can move our way of thinking into higher gear. Old laws and regulations are overruled.”Koornwinder developed her own indicators, which led her to express opinions on crucial moments that were completely at odds with the vision of the established bodies. “However, my analysis turns out to be working”, says Koornwinder, who had her work method verified by an accountant.

      She has changed the name of her agency. She felt that the old name, Koornwinder Chart Guidance, was too much associated with technical analysis. The new name Koornwinder Global Market Navigation (KGMN) should provide a better description of what she is doing. “I guide the investor, as it were, via the electronic highway to his target”, says the analyst.

  • The dogma that a low dollar rate is bad for the stock market, no longer applies. Last Thursday the Dow Jones – the indicator for the stock market of New York – broke through the 4000 point limit for the first time in history despite the persistent drop of the dollar rate.


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Self-made stock market guru has solution for pensions
Koornwinder sees possibilities for better fund returns

1995-03-12, Arnhemse Courant

By Jan Smit

AMSTERDAM

She refuses to accept that the ageing of the population is endangering future pension payments. The return of pension giants such as the ABP and the PGGM can be improved. Herma Koornwinder, self-made investment expert from the Dutch town of Heeze spent years developing a method that exceeds the results of the most renowned portfolio managers: Koornwinder Global Market Navigation (KGMN).

      For a long period of time, she doubted her own method. Because who was she to tell graduate economists how to do their job? She hardly ever expressed her opinion, and if she did, she was not taken seriously. This is why Koornwinder decided to make a bold move last year. She commissioned the renowned accountant agency Deloitte & Touche to apply her method over a period of five years. According to the accountants, the ‘economist’ succeeded in outperforming the leading stock market indexes by a long shot. They compared her performance with that of the Morgan Stanley Capital Index (MSCI), the leading global index in the financial industry for stocks. Measured over several periods of time in the period October 1992 until January 1994, she beat the barometer time after time. With large differences, both in a bull and bear market.

      Remarkable

      This is remarkable since more and more investment experts became convinced over the past years that, regardless of their strategy, they could never beat the indexes in the long term. Professor Malkiel of the famous American Princeton University recently even wrote this in his best-seller ‘A random walk on Wall Street’. But also closer to home, in Zeist at PGGM, people believe this philosophy. PGGM, the pension fund of the healthcare industry, with a total capital of 10 billion guilders, that is the second largest pension fund of the Netherlands, announced last week that they are planning to invest 50 to 60 percent of their money in stock in the future. Currently, that percentage is 32.

      But do not think that PGGM will become an active stock market trader, on the contrary. In line with Malkiel’s philosophy, the pension fund wants to keep bought stock in their portfolio for years, without touching it. Unbelievable, Koornwinder says. “They need to do something with the capital they have been entrusted with. They can achieve much better return if they start using the present technological knowledge. But they will not”

      Stock market value

      Her secret? Making optimal use of modern knowledge technology. With the help of digitized techniques she scans the entire world, to paint a complete picture of the current state of affairs. “Most analysts study corporate values, but that is wrong. They should study the stock market value and take into account the economic cycles. To give you an example: I do not just review one bank in one country, but all banks in the entire world. That makes a huge difference.”

      It is what Koornwinder calls the financial revolution. “Most investors and banks use obsolete models. They are still talking about the electronic highway, whereas I am already travelling the electronic skyway on the Internet. But they are afraid to do so, it scares them.”

      Coincidence

      Her motive? Social concern. Koornwinder has no economic background at all. In fact, she was a teacher in modern languages. But she was interested in the financial world, albeit passively. This changed in the beginning o the eighties, more or as a coincidence. She became intrigued by the idea that future welfare would be under pressure because of the rapid aging of the world population and she wanted to do something about it. She obtained her modular certificate economy on a pre-university education level. Objective: to study economy in Tilburg. She never got round to that. Thanks to self-study she predicted the stock market crash of Wall Street in 1987.

      Koornwinder: “They called me some kind of financial seer. I thought they must be right. I did not feel like having my models analysed, because that would mean revealing my secret. If I wanted to convince them, there was just one thing I could do: have my discoveries verified. That is what I did, and that is what I am telling the world now.” (ANP)



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'Stocktendo' era
Upcoming financial trends scanned using advanced computer and information technology
1995-05-15, Trends – Cash!

Outperforming the market. Everyone dreams of it. Theoretically, it is not possible. However, the examples of Lynch, Buffett and Zweig indicate the opposite. Not for you? Do not be mistaken; even closer to home, people are achieving the miracle.

19950515

“Probabilities from books cannot be regarded as certainties. One needs to grow in one’s own analysis.”

Herma Koornwinder is a Dutch “ex stay-at-home mom”. But today she is heading her own financial economic research and consultant agency. A mouthful: Koornwinder Global Market Navigation (KGMN). Trend-watching is the mission. Out-performing the index is the objective; tracking down reversal mechanisms on a global level is the means.

      Binoculars remain untouched, digital super-telescopes are used. In 1995, Herma and her followers are already using the investment technology of the 21st century. The introduction of the electronic highway so as to make optimal use of the investment cycles. A remarkable story.

Why did you choose to find your own system, your own analysis technique?

That goes way back. I was reading everything I could get my hands on. Magazines, investment journals, balance sheets. I studied them all very thoroughly. Often, I would also attend annual meetings. I was on the phone with various banks on a regular basis.

The effort and the…

Continued on page 3




HK: the rest of the pages is missing

 

 



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New research method tracks down market trends
Analysis includes all economic indicators

1995-06-10, Beursplus

“Trends have a predictive value. Our strength lies in the global tracking of reversal mechanisms, so that, in case of a turning point in the market, one has the investment portfolio ‘trend ready,’ states analyst H. Koornwinder. With a research method she developed, Koornwinder Global Market Navigation (KGMN), she wants to try to outperform the index. Last Friday she handed the report with her discoveries to stock market chairman Van Ittersum.

      According to Koornwinder, both fundamental and technical analysis has shortcomings, which prevent reliable prognoses. Therefore, the foundation of the KGMN approach is a symbiosis of both methods of analysis complemented by thorough knowledge of the classical and modern analyses says Koornwinder. As opposed to the traditional, time consuming research, she believes that it is possible to use advanced computer and information technology to scan the developments of the financial market on a global level. This new method enables us for the first time to include all economic factors in the analyses says Koornwinder. The so-called KGMN-Global Scan was developed based on years of study into the undulating motions of the international financial markets. Included in the research were 22 countries, 1000 stock market listed companies, currency, interest and raw materials.

      According to Koornwinder, this research made clear why certain theories work in one situation, but fail in the other. The researcher points out that the rates do not just fluctuate randomly, but in an undulating movement. She believes it to be proven that the so-called undulation analysis is more lucrative than the passive buy-and-hold analysis. Furthermore, the undulation analysis is more lucrative than risk management, spreading and index-tracking, according to Mrs Koornwinder.

      Accountant agency Deloitte and Touche studied the published expectations of KGMN and verified which turned out to be accurate and which did not. The results were divided into three categories. With regard to the index trend analysis, 22 out of 23 predictions about various stock markets were confirmed by the events that followed. In addition, the accountants looked at seven stock portfolios composed by KGMN. Six of those performed 10% better than the corresponding stock index. And some more descriptive predictions were verified. Apart from a rare exception, they all turned out to be accurate, says Deloitte & Touche.



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Lesson for pension giants
Investment expert develops very lucrative method

1995-06-12, Utrechts Nieuwsblad

Door Jan Smit, ANP

AMSTERDAM

She refuses to accept that the ageing of the population is endangering future pension payments. Of course, she cannot stop ageing itself, but the returns of pension giants can be improved. Herma Koornwinder, self-made investment expert from the Dutch town of Heeze, has more to offer than promising statements. She spent years developing a method that exceeds the results of the most renowned portfolio managers.

      For a long period of time, she doubted her own method, because who was she to tell graduate economists how to do their jobs? She hardly ever expressed her opinion, and if she did, she was not taken seriously. This is why Koornwinder decided to make a bold move last year. She commissioned the renowned accountancy agency Deloitte & Touche to examine her method over a period of five years. According to the accountants, the ‘economist’ succeeded in outperforming the leading stock market indexes by a long shot.

      They compared her performance with that of the Morgan Stanley Capital Index (MSCI), the leading global index in the financial industry for stocks. Measured over several periods of time from October 1992 until January 1994, she beat the barometer time after time, with large differences, in both bull and bear markets.

      This is remarkable since more and more investment experts became convinced over the past years that, regardless of their strategy, they could never beat the indexes in the long term. Professor Malkiel, of the famous American Princeton University, recently even wrote this in his best-seller ‘A Random Walk on Wall Street’. Koornwinder’s secret? Making optimal use of modern knowledge technology. With the help of digitised techniques, she scans the entire world to paint a complete picture of the current state of affairs.

     Scanning the world

      ‘Most analysts study corporate values, but that is wrong. They should study the stock market value and take into account the economic cycles. To give you an example: I do not just review one bank in one country, but all banks in the entire world. That makes a huge difference.’

      It is what Koornwinder calls the financial revolution. ‘Most investors and banks use obsolete models. They are still talking about the electronic highway, whereas I am already travelling the electronic skyway on the internet. But they are afraid to do so, it scares them.’

      Her motive is social concern. Koornwinder was a teacher in modern languages when she became intrigued by the idea that future welfare would be under pressure because of the rapid ageing of the world population. She wanted to do something about it and obtained her modular certificate in economics at a pre-university education level. Objective: to study economy in Tilburg. She never got round to that. Thanks to self-study she predicted the stock market crash of Wall Street in 1987. That did not go unnoticed.

      Koornwinder:  ‘They called me some kind of financial seer. I thought they must be right. I did not feel like having my models analysed, because that would mean revealing my secret. If I wanted to convince them, there was just one thing I could do: have my discoveries verified. That is what I did, and that is what I am telling the world now.’

      She has offered the results to stock market chairman Baron Van Ittersum. His response was positive, even if it was only to reignite the discussion about technical analysis. In addition, an investment consortium has shown interest in Koornwinder’s method. The stock market guru now knows the reason for her success: self-teaching ability. I am a true autodidact, which is the power of my approach. Most economics students are being taught old methods, which no longer apply. In the industrial era, we worked with raw materials. Nowadays knowledge is the basic material.’



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En route pour le XXIe siècle
Herma Koornwinder
1995-6-15, Cash!


Translation in English will appear soon.






Translation in English will appear soon.


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Dutch stock market guru does know how to outperform the market

1995-06, De Volkskrant

By Peter de Waard

AMSTERDAM

With a pencil, ruler and a pair of compasses anyone can refer to himself as a technical analyst or for that matter a stock market guru. But there is often hardly any proof for the correctness of the rate predictions. Sometimes someone will score a direct hit, but usually that reputation will bite the dust after a while.

     Therefore, many experts have given up hope to be able to predict the rate movements on the stock market. They invest all their money in the funds that are also included in the index, convinced that it is not possible to outperform the market.

      In 1989, Professor Jan-Willem Goslings, head investment of the National Civil Pension Fund back then, determined during a discussion with Robeco manager Jaap van Duijn, that the index cannot be outperformed. He did not have to look for proof, there are countless of books on the subject. In his authoritative book ‘A random walk down Wall Street’ the American professor Malkiel came to the conclusion that neither technical analysis – predicting rate movements using graphs – nor fundamental analysis – the study of the future development of companies and the economy – helps to achieve a better return than the market for several consecutive years.

      The capital managers are proving Malkiel right year after year. The 200 largest pension funds in the Netherlands achieved an average negative result of 3.3 percent in 1994, whereas the stock market index – in this case the Amsterdam EOE Index – remained unchanged. ABN Amro Asset Management calculated that only one third of the Dutch investment funds that invest in stocks globally, perform better than the world index, the Morgan Stanley Capital Market Index.

      But there is one exception. In 1989 Dutch Herma Koornwinder took up the gauntlet Goslings had thrown. She is convinced that she does know how to outperform the market using her models. Not just in the short-term, but also in the long term. “Should pension funds succeed to achieve as little as 1 percent more return on their investments, it would be of great social importance, given the aging of the population.”

      For the past six years she has been trying to prove that it is possible. Koornwinder locks herself in her office every day in order to develop indicators on the future direction of the financial markets aided by the computer. Not only does she combine technical and fundamental analysis, she also constructs indicators regarding strategic changes in society as well as psychological trends. Together, they form her ‘Scientific Investment System’.

      But her system has mainly been faced with disbelief. Koornwinder has been called the “seer” of the stock market. But she fought back. She had her study results verified by the accountant agency Deloitte & Touche. The result, which was presented yesterday in the Industrieel Club in Amsterdam, showed that Herma Koornwinder correctly predicted the market movements in 22 out of 23 cases.

      Not only did she predict the stock market crash of October 1987, she also predicted the growth of the stock rates in1988, the rate drop at the start of the Gulf crisis in 1990, the rate recovery during the outbreak of the Gulf war, the rate explosion in 1993 and the rate drop one year later. Six out of seven of her investment portfolios outperformed the market index in the past five years, whereas one portfolio scored equal to the index.

      Herma Koornwinder has a simple explanation for the fact that she is one of the few people capable of outperforming the market. “Most analysts work way too sketchily. They only pay attention to one country and often even one sector, e.g. the banks or the industry, which results in a lack of overview of the entire financial world.”

      J.P. Wichers who is a professor at the Erasmus University and is involved in predictions of financial markets has a different explanation for her success. “It is simply the fact that she works much harder than other analysts. Who makes breakfast for the kids before eight in the morning and then locks herself in the study to work on models all day?” Wichers has tried, with the help of a number of students, to decrypt the secret of her models, but that turned out to be huge fiasco. “She will not tell anyone. I am convinced that if she would reveal her secret, everyone would adopt her work method. She only has one disadvantage: she does not know how to sell herself.”

      Stock market chairman Boudewijn Baron van Ittersum, who was handed the first copy of the conclusions of Deloitte & Touche past Friday, was also very charmed by the activities of the Dutch guru. “Unfortunately, she will not reveal her secret. But at least she is fuelling the discussion about investment analysis. I believe that with the help of advanced computer technology, it will be possible to develop better methods of analysis, although it will never be possible to predict event such as the invasion of Kuwait, the earthquake in Kobe or an attack on Clinton.”

      By the way, Van Ittersum stated, the stock market has little to gain from a perfect investment theory. The market exists by the grace of opposite points of view.



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KGMN makes active investing possible

1995-10, Management Info

Successfully predicting the developments on the financial market is not a matter of just selecting the right information. It is also a matter of choosing the most relevant information streams from all available information streams, for which a sixth sense regarding financial economics is indispensible.

      KGMN is a new form of digital service provision, based on years of scientific research into the movements within the financial market and the environmental factors that have an impact on this market. Mrs Koornwinder on the macro-economic importance of KGMN: ‘I am selling an electronic service, based on the superhighway thinking; the KGMN system.’

19951000 

Mrs Herma Koornwinder hands the first copy of the report verified by Deloitte & Touche to chairman of the Amsterdam Stock Exchange Boudewijn Baron Van Ittersum.

     On June 9th, Mrs. H.M.C. Koornwinder publicly presented her service by handing her first ‘KGMN Performance Record 1989-1994’ to the chairman of the Amsterdam stock exchange, Baron Van Ittersum. It is a service for institutional investors, pension funds and other financial bodies to enable them to improve their performance on the financial markets.

     Mrs Koornwinder summarises the advantages of her electronic service as follows:

  • ‘The advice is global. We analyse 22 international stock markets and about 1,000 companies that are listed on these stock markets. We pursue on-time investments, meaning stock picking in a bull market and hedging, decreasing the portfolio or sell it altogether in a bear market.’
  • ‘The advice is clear. We do not provide our clients with an extensive description, but clear buy, hold, or sell recommendations.’
  • ‘The advice is cost effective. Expensive trips to remote stock markets or companies are no longer required. Expensive local fund managers in various regions of the world can be avoided, because large sums of money can be managed by one fund manager and his assistant on a global level. Exploring the financial world, not by plane, but through the electronic highway.’
  • ‘The advice contains an extra dimension. Technical and fundamental analysis, the modern portfolio theory, index investing, the ‘growth stock’ trend, the ‘synergy’ trend, the ‘what’s in it must come out’ trend, are not sufficient any more in today’s world. An additional dimension that integrates more factors and influences is required.’

       ‘It is most certainly necessary that the return is increased,’ Herma Koornwinder continues. ‘For example: the Dutch pension and insurance funds handle about 800 billion guilders. If better research can lead to just one percent more in return, that would be substantial. It has been calculated that funds could decrease their pension premiums with 15 percent if they improved their performance on the stock market with just one percent. The KGMN Performance Record 1989-1994 proves that this is truly possible.’

      That report shows, among other things, that of the seven model portfolios that KGMN composed, six had a better return than the associated stock market index. The seventh had a result equal to the index. On average, performance was up 10% (in absolute sense). During the years concerned, KGMN also correctly predicted a turning point in the stock market 22 out of 23 times. (Verified by Deloitte & Touche).

      Herma Koornwinder, married to a manufacturer, went from entrepreneur’s wife to global player. Since her youth she has been studying the financial pages, she studied languages in England, France and Germany, and became more and more interested in the financial conduct of the stock markets. “What intrigued me was that there turned out to be two worlds: the financial world from the media, annual reports, etc., and the actual world. I never felt like becoming a financial analyst, but my hunger for knowledge in that direction grew rapidly. The intangible, that hidden world, appealed to me. However, twenty years ago, I could not make a proper estimate of the financial markets with the methods of analysis available back then. I visited companies, met the management, read annual reports, even called suppliers or clients. Still, I was put on the wrong track all along.”

      She studied financial, economic and scientific books and discovered the contradictions. And thus her knowledge of the predictability of the financial market increased during the Eighties. The foregoing resulted in the prediction of the crash of October 1987. ‘Back then, I already said that many roads lead to Rome, at least more than the well-known financial analysts led to believe. Of course nobody would believe me, because someone famous such as the American Burton Malkiel said that it was and is absolutely impossible to predict the financial market developments.’

      In the period from 1985 until 1987, Mrs. Koornwinder studied about fifteen professional and investment magazines. In addition, she analysed common theories. During a laboratory phase of two years, her vision was tested for effectiveness. ‘You could say that I am like a spider in the cobweb. I extract all information from the system and apply my vision to it. It goes without saying that I will not reveal my work method, my indicators, because that is what distinguishes me from other analysts and agencies that perform financial consultancy. Reality compels me to say that the accountant research shows that based on my analysis, investment performance can be increased.’

      She continues: ‘I always say that I am selling the results of a 21st century system. My analyses are based on a completely different thinking pattern. I do not walk the beaten track. It is a matter of: which questions do you ask to reach the right vision? It is my advantage that we are on the threshold of the era of knowledge technology. ‘Its possibilities are immense. Since I was not burdened with all kinds of wisdoms, I was able to look at things from a fresh perspective without any heritage: original thinking, using logic and finally ascertaining that the financial world works differently than is generally assumed. I would like to clarify this using an example: The stock market value is too often equated to the company value, which leads to an erroneous expectation. Take Unilever for instance. Was the quality of the management or the price-earnings ratio of Unilever different on October 13th 1987 as compared to October 20th 1987? With the same management, the rate of Unilever dropped 24 percent this week.’

      Eventually, this resulted in her better list of questions. ‘Look, the economy is an ensemble and the result of millions of daily decisions in which psychology plays a major part. My conclusion, however, is that there are more important things to analyse and I have exposed the “legislation and regulation” of the underlying force fields.’ One has to conclude that the Dutch entrepreneur’s wife has struck gold with that strategy. The results are evident, which is why professional investors in the Netherlands are currently using KGMN, albeit just in the professional field. However, she hints, there is international interest for her analyses and she cannot rule out the possibility of a more ‘consumable’ version of the Koornwinder Global Market Navigator being presented to the market. Smiling: ‘People cannot get around me anymore. I have solid proof supporting my vision.’


19951000 

 

      Behind the system of Mrs Koornwinder, a firm belief is hidden. She explains: ‘We have a major problem in the Netherlands. It has become evident that the breakdown of our social security system has begun. There is reason to wonder if the pension funds will have enough financial means in the future to fulfil their obligations.

      ‘In addition, we will be increasingly active on the digital highway. I believe that our country does not worry enough about a jobless society. The increasing possibilities in the field of automation will lead to a major loss of jobs in the service industry. Routine actions and thinking will be taken over by computers. In addition, certain activities will be outsourced to low-income countries. All of this is possible thanks to the modern means of communication. The question remains if the huge loss of jobs will be affordable in the near future. My vision is that global investment, and especially active investment, gives the financial power to fund the jobless society. Otherwise we will not be able to afford the ageing nor the unemployment.’

      She continues: ‘And we need to invest more in computer education. In the Far East, some schools work only with computer screens. Here, we have four PCs in a primary school, which are being used only if the teacher feels like it. We need to start exploring; we need to scour the world again for opportunities and possibilities in the Digital Age, just like we did in the Golden Age. Of course, this needs to be funded and that is possible with active investments: no unnecessary risks, no index investments – while making sure that we do not depend on old calculators, because that would be disastrous for the social balance. If we are able to realise a performance increase of one percent, why not do it?’

      Finally, Mrs. Koornwinder states that this is not a calling: “No, I consider my advocacy for active investing to be a form of social involvement. The electronic highway, electronic investing, the digitisation of the financial world, the hedge funds and the use of derivatives, are part of the reason why the cash flows are laser beaming through the financial universe. These cash flows can no longer be analysed using the traditional methodologies, which is why people are often wrong and unable to outperform the index concerned.’



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A splendid outperformance
Herma Koornwinder: an investment advisor who puts her head above the parapet

1995-10-20, Management Team

Door Hans Amesz

Is it possible to systematically out-perform the market? “No” say investment experts. “Yes” says Herma Koornwinder, self-made investment consultant from the Netherlands. Based on her own indicators, she often issues advice that directly opposes the advice of the establishment. Critics suggest that Koornwinder has been very lucky. Nonsense, according to her. “My vision has been proved to be working.”

      “In October 1989, I attended an investment symposium in Rotterdam,” Herma Koornwinder explains, “where it was stated that it was impossible to systematically out-perform the market. This was illustrated by the modern portfolio theory and they talked a lot about index investments. As long as one invests in stock that is in the index of the stock market, one never makes a bad bargain and prevents one’s results staying behind on the market. One does not need expensive experts who continuously need to make choices for certain kinds of stock.” In short: index investing pays off.

      Koornwinder says she made a stand against this back then, but was bombarded with theories of investment professors such as the American Burton Malkiel, who, after all, in his book “A Random Walk Down Wall Street”, states that one might as well have a blindfolded monkey throw darts at the stock pages of the newspaper as expensive experts to compose a stock portfolio. By the way, Wall Street actually tried this tactic and the results were not very encouraging for the professionals.


19951020
A splendid outperformance


      Koornwinder, however, disagreed. “I kind of felt like Hans Brinker with his finger in the dyke. It was inconceivable that everyone believed it to be impossible to out-perform the market. I realised that the economy is the result of thousands of decisions. Maybe economists and investment experts were using an erroneous list of questions, and therefore faulty indicators. The fact that market movements are not always predictable does not necessarily mean the dollar or the interest is to blame. There can be numerous other causes.”

      Anyway, Herma Koornwinder decided she wanted to fight it out and settled behind her desk in Heeze, with a limited number of institutional investors as clients of her Koornwinder Global Market Navigation (KGMN). “I studied the waves in the international financial markets during a great number of years, based on the knowledge that both fundamental and technical analysis each has its own shortcomings which prevent reliable prognoses, and assuming that the only grip of a financial analyst is the past,. This research concerned 22 countries and one thousand listed companies, currencies and raw materials over a period that was as long as possible.” Koornwinder developed her own indicators and, based thereon, regularly issued statements that directly opposed the vision of the establishment. “My vision has been proved to be working.”

      The report Performance Record 1989–1994 by accountancy agency Deloitte & Touche confirms this. The researchers have determined that 22 out of 23 trend predictions made by Koornwinder Global Market Navigation, in the aforementioned period, turned out to be right. In addition, six of the seven portfolios she composed out-performed the market while one performed equally. The average out-performance was 10 percent, which is no mean feat and stock market chairman B.F. Baron van Ittersum was so impressed that he was agreed to receive the report in person at the Industrieele Club in Amsterdam this summer.

      Bull’s-eye

      Herma Koornwinder really pulled something off in January 1994. While every analyst was still cheering after the great investment year 1993 and the majority of consultants were encouraging investors to invest even more as the interest would certainly keep sliding, she warned in an article in the magazine “Beleggers Belangen” on January 24th of that year that her system indicated that people should reckon with counter- pressure. “I do not know how long that will last. At this point it is also impossible to say whether there will be a new upward wave or a trend reversal, both of which are casting their shadows forward,” she warned. Just four days later, KGMN advised her clients to protect their portfolios with put options.

      Not much later a sell advice was issued. A bull’s-eye. Instead of sliding further in 1994, the interest increased majorly, resulting in a 14.10% drop of the Amsterdam EOE index. All important stock markets suffered significant losses, Wall Street the least with minus 7.92 percent, Hong Kong the most with minus 39.42 percent. The accountancy report about KGMN’s performances includes performances only until 1994, but Koornwinder did not miss out on the recent rally on the stock markets: she is back in the market.

      Her portfolio of Dutch funds with no less than 28 funds (including Elsevier, Philips, Van Ommeren, VNU, Ceteco, Gouda Vuurvast, Management Share, Neways, Ordina, Pirelli and Samas) has, again, significantly out-performed the Amsterdam EOE index with about 5 percent since the start of June.

      Scale model

      She does not want to share how her system works exactly, because “that is what my customers are paying for “. However, according to her the bottom line is to properly identify the undertone of the markets. “Rates may increase euphorically, but when the foundations are weak, one needs to be careful.” Koornwinder distinguishes between the long-, medium- and short-term and bullish, bearish and stable. “I utilise a scale model, so to speak, in which values are constantly weighed both for markets as a whole as for individual funds. Mass psychology is a very important factor in this process.”

      The obvious question would be how the undertone currently is, now that many stock markets, including Amsterdam, have shown true rallies. “As I said, I am still in the market,” she responds. At that time, it is September 11th. A few days later, on September 14th, newspapers report that the Robeco Group has adopted a new investment strategy. The largest European investment body, that was suffering trailing results, is acquiring De Bary Asset Management. This capital manager chooses investment categories, based on objective statistical data, and invests according to the index. Robeco manager Prof. Dr. Jaap van Duyn: “If the market favours it, we will also start with index funds. However, at heart I am convinced that the index can be out-performed.”

      Unilateral approach

      The fact that the Robeco Group is incapable of doing so systematically is due to the fact that it approaches the market way too unilaterally, according to Koornwinder. That also applies to most other institutional investors, with serious consequences, she says. Because if pension funds and investors would use better investment methods, the premiums could be lowered, and the Netherlands would become more competitive and therefore more prosperous.

      Sceptical observers persist in their belief that Herma Koornwinder has been very lucky; to this the self-made analyst shrugs her shoulders. For the time being, she deserves at least the benefit of the doubt. After all, she has demonstrably out-performed the markets for quite a period of time. “No,” she replies when asked, “of course I did not hide some erroneous predictions from the accountants of Deloitte & Touche. They have verified everything I said and wrote about the financial markets.” Does Koornwinder invest herself? “Absolutely not. I do not want to be emotionally involved in my work as a consultant.”



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Investment night Rabobank huge success

1995-11-09, Soester Courant

19951109 

The investment specialists of Rabobank Soest-Baarn, Pieter Krom and Dick Geersinga hand Mrs Koornwinder a cheque for the M.E Foundation to thank her for her lecture.

Restaurant Darthuizen recently had a very busy night. This was the result of the first investment theme night held by Rabobank Soest-Baarn. The event sparked so much interest that many interested people had to be disappointed, because the event was overbooked.

     The Rabobank Soest-Baarn has listened well to its customers because, as it turns out, they are very interested in information about investments. For that reason, the Rabobank Soest-Baarn decided to shed some light on this service in particular. The first night proved to be an absolute bull’s-eye. Mrs Koornwinder, currently the most renowned stock market analyst of the Netherlands, gave a lecture on the principles of technical analysis. Although her lecture was very clear in content, the subject turned out to be somewhat difficult for the less experienced investor.

      The general evaluation of the night by the visitors was very positive. Of course, there were some individuals who believed it to be too technical or too advanced, and a few people indicated that they would like to be able to provide more input.

      For the Rabobank ‘focus on the customer’ means that it listens to the needs of its customers. Following the questionnaire, this investment information night will be continued. The Rabobank Soest-Baarn is already working hard on its preparation. The next night will focus on options and is scheduled for the first quarter of 1996.



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Herma Koornwinder, a Dutch guru
Outperforming the market is possible

1995-11-10, Beleggers Belangen

By F.W.J. Baijens

Outperforming the markets the desire of every investor. Countless theories have been developed and tested in the course of the years. In that respect, a stock market is not so different from a casino and the weather. By now, everyone agrees that, as an investor, you need a system and that you should follow it consistently. But the question remains: which system?

      For financial economical research and consultancy agency Koornwinder Global Market Navigation (KGMN) that is no longer a question. From the Dutch town of Heeze, analyst Herma Koornwinder has been achieving remarkable investment performances again and again for years. Of course it is possible to outperform the market on a regular basis. Big names such as Peter Lynch, who even wrote a book about it, and Warren Buffet are good examples of funds managers with performances the average individual investor can only dream of. But virtually everyone in the investor world is convinced that you cannot always outperform the market as a whole.


19951110
Herma Koornwinder: success by critical studies and exploring

     Original thinking

      Herma Koornwinder clearly disagrees and does not hide it. She has been interested in investing for years. In an early stage she read investment magazines, newspapers and annual reports. She attended annual meetings, consulted banks and analysts, but she soon discovered that the analysis of the market based on that, hardly ever came true. Positive signals and prognoses hardly ever led to a positive investment result and vice versa.

     Mrs Koornwinder: ‘Biggest mistake by analysts is not to search for the reason why’

     But she did not accept it; statements such as ‘the market is always right’ did not go down well with her. Back then her self-righteousness was already apparent. In the eighties, she started an economy study, but soon she got stuck in the set pattern of reading books and adopting established visions. Simply accepting the material that thousands of students had accepted before her, was not something Herma Koornwinder was prepared to do. Economy is the result of thousands and thousands of decisions.

     Rules that are being used by countless of economists, simply because that is how it has always been done. But Koornwinder questioned this and started looking for the how and why herself and locked herself in the study, not just to learn the matter in the study books, but rather to try and understand the how and why of the rules – what could one do with them? Economy is psychology as well, it can even be considered to be a natural science. Economy is a part of a greater whole, so she started thinking big and developed new insights. She is convinced, for instance, that the market is not efficient.

      Take nothing for granted

      Although she, when she started studying, had no intention at all to actually use her knowledge for an investment theory, she stumbled onto this matter and approached it the same way. Do not take anything for granted simply because it is written in a book, but start looking for the how and why yourself. What could you do with it, how was the economy actually composed? In addition she trained herself in computer,  information and knowledge technology. And when she attended an investment symposium in Rotterdam in 1989, where she heard that it was impossible to systematically outperform the market, she strongly disagreed.

      As an example, she mentioned the so-called index investing. When you invest in funds that are in the index, you may prevent that your results trail in comparison to the market, but you will most certainly not outperform the market and it was that exact routine that Herma Koornwinder was trying to break. She believed it to be possible to outperform the market, but her theory was laughed away by the establishment. After all, there were investment professors with well-sounding names such as professor Malkiel of the Princeton University, who had ‘proven’ that it is impossible to consistently outperform the market.

      October crash

      But Herma Koornwinder was not and is not the person to easily quit. She believes the main ‘error’ renowned analysts make is that they fail to look for ‘the why’. Let us say that everyone is convinced that the American stock market will rise. Month after month we read about this vision, but still, there is no actual increase of the Dow Jones index. Eventually, everything stays the way it was and nobody writes about the previously expressed expectation for the future. And that in particular, is something Koornwinder cannot understand, because that is the essence. If you know why the increase did not follow through, you will not make the same mistake the next time.

      Herma Koornwinder gained a lot of self-confidence due to the stock market crash of October 1987. All her indicators were negative prior to the fatal date, while virtually the entire investment world was cheering. When the stock markets actually collapsed, she realised that she had found a unique approach and she dove into her research with even more energy.

      Similar, but more recent, is her correct prediction for the financial markets in 1990. When the entire world was counting its money after the fall of the Berlin Wall – former prime minister Lubbers was talking about our ‘most happy days’- Herma Koornwinder was negative about the financial markets. And again she was right. The same goes for 1994. At the end of January of that year, she warned in Beleggers Belangen that the……

      The essential data of about 1000 funds and 22 stock markets are monitored and inserted into the computer. This also applies for the various currencies, interest rates and bond markets.

……stock markets could suffer some counter pressure in 1994. Today, we all know what that counter pressure was: interest turned, and displayed a major increase. Empowered by all of this, she developed an entirely new system of indicators behind her desk in Heeze, because neither the current fundamental and nor technical analysis was working sufficiently. Essential for a good prediction is acknowledging those force fields that cause waves and trends.

      The psychology of the market and the investment climate are important factors as well. In addition, a total view is required. Furthermore – and that is where her self-righteousness comes in again – one can never simply accept profundities in books as being the truth. Spreading, for instance, is altogether wrong, since you will either miss a part of the profit or drag along with the loss. And she works with modern means: the possibilities of the ‘electronic highway’. The essential data of about 1000 funds and 22 stock markets are carefully monitored and inserted into the computer. This also applies for the various currencies, interest rates and bond markets. This data is processed by several programs, which allows for advanced analyses. Investment techniques of the year 2000, already being put to use.

      Accountants' report

      Because of the fact that her visions were continuously opposing the visions of other analysts in the past couple of years and because she wanted to obtain a quality certificate as an advisor, she commissioned the renowned accountant agency Deloitte & Touche, through her contacts at the Erasmus university in Rotterdam, to investigate the performance of her models. To this end, Deloitte & Touche were given access to all books and orders.

      The report ‘Performance Record 1989-1994’ does not leave anything to the imagination. Out of the 23 trend predictions for various stock markets in the period mentioned, 22 were accurate. In addition, six of the seven global portfolios of KGMN, outperformed the market. Number seven performed equally well to the market (on average 10% outperformance). Almost all publications and prognoses in that period were confirmed by later developments. Therefore it was a sort of acknowledgement last summer that the chairman of the stock market, baron van Ittersum, agreed to receive the report in question in person.

      Proud

      Without any doubt, the report is a result to be proud of. And it does not stop there. One of the funds composed by her agency, the so-called Koornwinder Benchmark Fund Nederland, was the only fund to score better than the CBS index in the third quarter of this year, 3.2% higher as a matter of fact. Other well-known names, such as the Amsterdam EO Index Fund, the Orange Fund and the ABN Amro Dutch Fund, all were lower than the CBS index. Currently, Herma Koornwinder is negotiating with several large investment and pension funds. Partly because of that she is unwilling and unable to say anything about the current market. But we certainly have not heard the last of her, because she is very attached to her system, which she is refining constantly. She does not invest herself by the way. “It is the only way to approach the market in a truly objective manner” is her firm belief.



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Interview with Mrs Herma Koornwinder, Dutch stock market guru

1995-11, FiscAlert

By Prof. dr A. Knoester

The Netherlands has an actual stock market guru in the person of Mrs Herma Koornwinder of Koornwinder Global Market Navigation (KGMN) in the Dutch town of Heeze. She claims that she is able to outperform the market. Therefore, she is no advocate of the so-called index investment, i.e. owning a stock portfolio that matches the stock market index or the average. What is Herma Koornwinder’s secret?

You have been all over the news lately. Numerous articles have been published about you in newspapers and you appeared on television in the program “Anno Joosten” of Astrid Joosten. How did that happen all of a sudden?

“My years of research have showed it is possible to achieve a better investment result than the index. The reason for the publicity was that I had my investment advice verified by the accountant agency Deloitte & Touche during the period 1989 until 1994. I have handed the first copy of the conclusions to the stock market chairman Baron van Ittersum in June of this year. The publicity snowballed from there.”

In your FiscAlert Magazine several times you could read it is not smart to try to get a short-term profit with dealing in stocks. We think by holding the stocks your goal should be profit in the long term. We will return to this subject. That people think differently about this is shown in the interview with Mrs Koornwinder.

What are the main conclusions of the Deloitte & Touche report?

“It shows, amongst other thing, that in 22 of 23 cases, my predictions regarding the movements of the stock markets were correct. For instance, I predicted the stock market crash of October 1987, the growth of the stock rates in 1988, the rate drop prior to the start of the Gulf crisis in 1990, the rate recovery in January 1991 and more recently, the rate growth in 1993 and the stock market correction in 1994. The Deloitte & Touche report also confirms that six of the seven global investment portfolios I composed, performed 10% better than the stock market index. My advice frequently opposes popular belief. I clearly recall that in the beginning of 1993 everyone– the grocer, the professor, the priest in a sermon at the St. Bavo and the management of pension funds – believed that the recession would last. Still, my indicators issued a strong buy signal.”

But how is it possible that you are performing so well?

“Most chartists are very short sighted. They usually limit their analysis to just one fund, one sector – for instance the banks or chemistry – or one country. I believe one should not consider funds or the Dutch stock market to be isolated, but look at them from different angles. And this does not just involve financial economic developments, but also social and psychological developments. In addition, the stock market should always be observed in an international context. Then I combine these explanatory factors with technical analysis and analysis (trends in the economy). And finally, we have to realise that the market is entirely different compared to, say, 25 years ago. Nowadays money is blasting through the financial world at lightning speed.”

What do you recommend the average investor whom this is beyond?

“My advice is to try and outperform the average in a bull market and to avoid large rate losses in a bear market.”

 

Stock Market Analysts
unilaterally

So if I am getting this right, your advice is to invest actively. But how will the investor know when to change his strategy?

“He needs to find an analyst who has the knowledge to guide this strategy. And I am not talking about the people on the phone at banks who are just repeating the sell and buy list of the top analysts without any feeling with the market.”

Yes, but every bank claims to have the best analysts.

“This is where the investor needs to become much more assertive. When people buy a car they ask all kinds of questions of the salesman. But when people start investing they are suddenly too shy to ask anything. This needs to change. They should ask about past performances and advice. Such as: What was your vision at the start of 1990, the start of 1991 during the Gulf crisis, on January 28th 1994 etc. In order to start working with a bank or investment fund it should satisfactorily answer ten questions like ‘What was your vision back then’.”


 

Herma Koornwinder hands the conclusions to the stock market chairman Baron van Ittersum.

I always say, if I could predict the future, I would be on the Bahamas. Why are you not in the Bahamas?

“For me issuing investment advice was not a way to get as many customers as possible, but a calling. Testing my model, the KGMN Global Scan, came first. The fact that people in the investment world speak a language that goes against all of my logic has always baffled me. A turning point in my life was when I discovered how poorly investment companies and pension funds are investing their money. The return on pension provisions and so-called residency funds is truly dramatic in the Netherlands. I hope to make people aware of this problem. An amount of about 750 billion guilders has been invested in pension funds, social funds and life insurances in our country. You can imagine what a huge difference a couple of more per cent on the annual return would make.

      The Netherlands should not let the threatening international tidal wave of knowledge technology drown it. We need to play a leading role in the financial field in the Digital Century we currently live in, just like we did in the Golden Age with our ships.”

Investment companies and pension funds invest dramatically bad



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The zapping investor is emerging

1995-12-29, Algemeen Dagblad

By Ton Kruijt

AMSTERDAM

The zapping investor, one who is constantly switching from one information source to the other, is emerging. He is adjusting his portfolio at lightning speed, with one press of a button, every day, every hour. The ‘stock soccer’ of the 21st century is still in its primitive phase but the ‘flash money’ will travel across the world in rapidly increasing amounts and at lightning speed. The search for the hotspot with the highest return, even if only for a second, becomes more and more efficient.

      “We are on the threshold of a completely different investment world,” says investment consultant Herma Koornwinder of KGMN consultancy from the Dutch town of Heeze. “Call it ‘Stocktendo’. Playing pinball with the buttons, as on a game computer.”

      Several years ago, the predictions of Koornwinder were mostly ignored, but her list of followers is growing. Her faxes to institutional investors have an impact on the rate of billions of guilders in investments. Both the strong growth of the American Dow Jones and the deep plunge of the Japanese Nikkei-index were accurately predicted by her. ‘I only act when I see an undulating motion. You can compare me to a surfer. Surfers also wait for the right moment to ride the wave.’

      Her investment model still runs into much disbelief. But the international accountancy agency Deloitte & Touche determined that Koornwinder predicted 22 out of 23 trends correctly between 1989 and 1994. On average, the seven examined investment portfolios performed 10 percent better than the associated index of the global stock market. Of course, even Koornwinder cannot guarantee future results. ‘My model can fail just as well.’ She will not make a prediction for 1996. ‘In January, there will probably be two investment funds that will work according to my prediction model: one fund for institutional investors and one for individuals. That is why I cannot say anything. We are still trying to find out how to implement information from the internet or other electronic channels.’

      The arrival of wireless electronics and more dynamics for the investor has also been noticed by Sijmen Plomp, of Effectenbank Stroeve. ‘The active investor works fewer hours, has more and more days off, a car phone and has a TV with direct rate information. He might, for instance, want to buy Philips and sell it the same day with rate profit.’ Effectenbank Stroeve, active since 1818, has noticed that another category of clients is rapidly growing. ‘Many people reserve ƒ50,000 to ƒ100,000, i.e., 5 to 10 percent of their capital, as play money. They themselves decide what happens to that money and they want to turn it into profit as fast as possible. The remaining amount is left to us to try and generate a reasonably safe return.’

      Pursuant to the changes among the investing audience, Stroeve decided several months ago to place one of their own men on the floor of the Amsterdam stock market again. That presence will soon be expanded. According to the bank, the new approach has resulted in hundreds of new clients. Another clue for the changes that are occurring is the phenomenon of the stock market order lines at the major banks. The Postbank led the way: low costs for orders without advice. This concept was copied by the SNS bank, ABN Amro, Rabobank and even the Shareholders Association, together with Labouchere bank. By now, insurance companies are also preparing to offer these kinds of services.

      Software developers are responding to the desires of a rapidly growing group of investors to do everything themselves. Software companies, such as Domus Software and Davilex, launched investment software for around ƒ100 for the millions of PC owners in our country. ‘Why make complex calculations if the computer can do it for you? One press of a button and the investor can see what the rate development of his fund has been,’ says Davilex. However, that the needs of the investor are growing rapidly as well is the experience of Domus Software. ‘They start out simple, but soon the investor purchases a more advanced version.’

      Nevertheless, the individual investor is still buying and selling at the wrong moments. Emotions remain the determining factor at crucial moments.’



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’Investor needs to be much more assertive'
Investment analyst Herma Koornwinder is annoyed by the attitude of the banks

1996, GPD

Door Koert Bouwman

HEEZE

Herma Koornwinder is very annoyed by banks and stock houses. In particular by their indolence regarding the ‘explanations’ of their erroneous estimates. “Well, ma’am, they will say. Things turned out a little different than we expected. We thought the dollar and the interest would rise. But alas… the fact that your stock portfolio now generates 20 per cent less profit is your own risk.”

      Koornwinder, global investment analyst for a number of institutional investors (pension funds, insurers), believes that shareholders should not accept such statements. “The investor needs to become much more assertive. Banks approach the financial markets way too unilaterally. Plus, they use the same methods as twenty years ago, even though very much has changed since then. Think about the derivatives trade and the computer systems that work globally. Cash flows are laser beaming through the world and can no longer be captured with the ‘old’ models the banks are using.”

      In her residence in the Dutch town of Heeze, Herma Koornwinder runs an investment consultancy: Koornwinder Global Market Navigation (KGMN). She does not work for individuals, only for the ‘big guys’. By means of fax and newsletters, she informs them on what is about to happen according to her theory/analysis. Koornwinder keeps track of the developments in the financial world almost at a microscopic level. She tracks 800 stock market funds in 22 countries, the international currencies, the interest and the main raw materials. “There are also other disciplines I include in my research: politics, philosophy, sociology and psychology and related sciences. I try to capture all these values in my formulas.”

      Because Mrs Koornwinder, as a critical self-made analyst, ran into lots of prejudice, she had her analyses and prognoses of the past five years checked by the accountant agency Deloitte & Touche. They declared her predictions to be surprisingly accurate.

     Forcefields

     The reason for this, according to Koornwinder, is that, after years of research into the forcefields of the macro-economy, the psychology of the investor and the global flow of capital, she discovered that the markets should be approached from multiple angles and in a multidisciplinary way. “Neither the modern portfolio theory, nor index investing, spreading risks, the ‘growth stock’ trend, the ‘synergy’ trend, technical analysis or whatever else, are, on their own, able to consistently lead to good results on their own.”

      The unilateral work method of banks and stock houses results in bad information, according to Koornwinder. “Someone can be suffering from a stomach ache, while still looking healthy from the outside. Only the scanner can prove that things are looking bad. The same applies to the market, the stock markets and the economy. You could say that the economy has two faces: one face everyone can see on a daily basis, the other one becomes visible through my ‘world scan’ which often deviates from the information provided to investors.”

      Wall

      Mrs Koornwinder decided to seek some publicity since she kept running into a wall at the banks. “I tried to get the banks to wake up, but they would not listen. As long as the investor does not ask for different methods of analysis, banks will do nothing. They are content as it is, and they are way too involved in their own internal reorganisations.

      “They accept any foreign theory without any questions asked. When I disclosed my research five years ago, the banks and stock houses responded: “According to foreign reports, this is impossible”. They came to that conclusion without doing any research themselves. We are entering the era of knowledge technology. We are able to think faster and at a higher level. Old laws and rules are overruled. When I submit this statement to banks, they respond matter-of-factly: the investor is not asking for it and chooses dullness.

      “That is nonsense, the only thing the investor wants for his hard-earned money is performance. The fact that a market does not move the way it is expected to, is not necessarily caused by the interest, the dollar etc. There can be many other causes. The investor does not know what is what. If someone buys a fridge, he gathers some information in advance. This is exactly what an investor should do. He needs to be informed that there are faster and better methods of analysis. This is why I am raising the alarm.”



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Herma Koornwinder, a Cassandra in a digital world?

1996-01, Zonta

By Marijke van Noort

EINDHOVEN

According to tradition, Cassandra was a psychic Trojan princess whose predictions were not believed (as a punishment from Zeus for rejecting his advances). Despite her warnings, Troy fell.

      In our current communications era, there is still a need for predictions in many fields. The investment world in particular exists thanks to differences in insights and statements on future rate developments. Traditional predictions are based on either analysis of graphically displayed rate developments or on studies of future developments of companies or economies. It is generally assumed that it is impossible to outperform the market in the long-term through technical or fundamental analysis.

      Herma Koornwinder issues investment advice that frequently deviates from the prevailing patterns. In 22 out of 23 cases, her deviating predictions of the rate development turned out to be right. She predicted the dramatic rate plunge of October 1987, for instance, as well as the recovery afterwards. Six of her seven investment portfolios outperformed the market index at an average of 10 percent. The seventh equalled it.

      Herma’s statements are based on her ‘scientific investment system’ which she developed based on years of analysis of the entire financial world. This system differs from the ‘traditional’ work method by including elements other than financial or economic, such as politics, philosophy and mass psychology.

    
Recently, Herma had her research results over the period of 1989-1994 verified by the accountancy agency Deloitte and Touche. They were very interested in the details of her system, but by disclosing these she felt she would lose her unique position and maybe even influence the mutual interdependencies [between what?]. Students of the Erasmus University were unable to ‘crack’ her system. After the investigation, Herma was in the news when the report of Deloitte and Touche was handed to Baron van Ittersum, the chairman of the Amsterdam stock market, on June 9th.

      The disbelief about her performance does not really surprise Herma. After all, she is trying to introduce the techniques of the 21st century into the 20th century. That cultural shift takes time, during which Herma is able to make her surprisingly reliable (and misunderstood) predictions. After the introduction of agriculture in prehistory and the industrial revolution in the 19th century, the introduction of the computer in the mid 20th century meant a new mega-development.

     According to Herma, we are now on the verge of the fourth mega- trend: the digital community in which current information is available anywhere in the world at any time through the electronic highway. The mutual interdependence of factors will significantly increase. That is why, in Herma’s professional field, it is important to have a wider scientific insight into the cohesion of factors. With that, she beats the stock market indexes and predicts breakthroughs and turning points on the international financial markets.



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'The investment industry needs to change’
Beleggen

1996-01-26, Beleggers Belangen

By H.M.C. Koornwinder

As we mentioned in the first issue of Beleggers Belangen in 1996, PR agency Van Hilten, organised its ‘Presidents’ Lunch’ for the 22nd time and invited a number of captains of industry to exchange ideas on the theme ‘External influences, an escape or a challenge?’ One of the conclusions – ‘the excuse book for 1996 needs to be rewritten’ - was heartfelt by Mrs Herma M. C. Koornwinder (of Koornwinder Global Market Navigation (KGMN).

      It is not just the badly performing companies, which need to find a new ‘face- and excuses book’, the investment industry should acquire such a book as well. Current practice still dictates that when the market does not respond in line with expectations, people are always looking for an excuse: the interest was to blame or an unexpected movement of the market, the dollar etc. No-one was willing to take the blame.

     Useless Indicators

     “But times are changing. Recently, Professor Dr. D. J. van Duyn of Robeco announced that Robeco’s indicators are no longer working. And he is not the only one who has discovered that. The same alarming signals are coming from the United States and England.

      Analyst Shulman of Salomon Brothers wrote in his report ‘Stock Market Bubble or Paradigm Shift’: ‘Regarding the stock market, we have been wrong for an entire year. We are starting to think that the valuation clocks we are using are broken. The fantastic stock rally of 1995 is no bubble, but a sign that the valuation paradigm (model) has changed for the third time in 40 years. In other words, the indicators are broken.’

      And as icing on the cake, the English economist Paul Ormerod fundamentally criticises common economic science in his recently published book ‘The Death of Economics’. According to him, creators of economic models do not deserve the high status they are enjoying at all, because their predictions never come true. According to Ormerod, economic science is still in a primitive state, comparable to natural sciences prior to Newton. He believes that the principles of common economy are completely untenable.

      When we also take into account the fact that back in 1900 the Frenchman Bachelier pronounced that, with the analysis of annual reports and rate behaviour, one could not reach an accurate estimate of the market, I am wondering if the current analysis theories will prove to be the failures of this century. After all, it was for good reason that former secretary Van der Paverd of the ‘Vereniging Nederlandse Analisten’ was advocating the professionalisation of the analyst profession in ‘het Financieele Dagblad’ of November 19th 1993 and stated that analysts should start looking for their own identity. The main task of the analyst is finding ‘new combinations’ said Van der Paverd.

      At the same time, however, he pointed to the top of the Dutch banks: ’The bank managers only check if the created analyses will not damage their company, which is very discouraging for many analysts. Stock transactions happen to generate less profit than issued loans. Partly because of that, analysts do not feel like developing new angles. Again, these statements date back to 1993, but I believe that it provides sufficient food for thought.’

**

After all, when the ƒ770 billion in pension funds in the Netherlands generates even one per cent more return, the premiums can go down 16%.

**

      Investors are overwhelmed and investment bodies and pension funds are performing badly. We have a big problem in the Netherlands. It has become evident that the breakdown of our social security system has begun. There is reason to wonder if the pension funds will have enough financial means to fulfil their obligations.

      I believe that our country does not worry enough about a jobless society. The increasing possibilities in the field of automation, will lead to a major loss of jobs in the service industry. Routine actions and thinking will be taken over by computers. In addition, certain activities will be outsourced to low-income countries. All of this is possible thanks to the modern means of communication. The question remains if the huge loss of jobs will be affordable in the near future.

      It is my vision that global investing, in particular active investing, will provide the financial means to fund such jobless society. Therefore I advocate a completely different investment strategy. The focus needs to be on active investing, looking for opportunities. Neither the Modern Portfolio Theory, nor index investment or spreading the risks will consistently lead to good results. This also applies to the ‘growth stock’ trend, the ‘what’s in it must come out’ trend, technical analysis and intuition in particular.

      Higher return, major saving

      After years of research into the force fields of the macro-economy, the psychology of the investor and the global flow of capital I have found it to be more successful to approach markets from multiple angles and in a multidisciplinary way. We are entering the digital era, which enables us to think faster and at a higher level. Thanks to this new knowledge, we are able to better understand why a market is not moving the way ‘one’ expects. And interest, the dollar etc. are not always to blame.

      The importance of success regarding investments is also reflected in a statement of eng. C.J. van Rees, president of the pension fund of Shell: “The job of pension funds is to obtain an optimal return on investment. Anything that gets in the way of that needs to be discussable.” Hard figures illustrate the usefulness of this statement. After all, when the ƒ770 billion in pension funds in the Netherlands generates even one per cent more return, the premiums can go down 16%. Therefore, it is absolutely necessary to put our heads together.

 



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Investing: intuition or institution?

1996-02-01, Pecunia Forum and Magazine

Rotterdam, 1st February 1996

Dear Sir, Madam,

We would like to draw your attention to a forum, to be held on the 15th of February and organised by the Financing Association Rotterdam Pecunia, with the theme: “Are the current investment modules ready for replacement?”

FAR Pecunia, the financing association of the Erasmus University Rotterdam, is a student organisation with approximately 400 members. Pecunia organises workshops, congresses, publishes its own magazine and each year organises a research project in a foreign country. Pecunia also organises an annual forum.

This year’s forum topic was chosen in the conviction that a discussion on the possibilities to give better predictions of market fluctuations and what the consequences of such predictions would be, can be beneficial to the investor at large. We hope to be able to welcome you as a participant to the forum on the 15th of February.

Yours sincerely,

Nicole van Putten                                            Mrs. H. Koornwinder

Activity Co‑ordinator                                       Koornwinder Global Market Navigation

Cover:

Herma Koornwinder

New investment technology is vital…

 
19960201

From the Editor:

Dear reader,

The third issue of Pecunia magazine, vol. 11 is out. Articles in this issue are to help you relax during the heavy examination period that you will face in the next few weeks. What kind of news can you find in this issue?

      In the cover story, Herma Koornwinder talks about her ideas with regards to present investment theories and shows us an example of the results achieved with an investment portfolio she put together. Furthermore, Mr. Pelsser tells us more about the different kinds of exotic options and how they can be used. Subsequently you will find four company presentations that Shell, Deloitte & Touche, ING Group and Unilever have prepared, all in their own, unique way. The ECFR* (Erasmus Center for Financial Research) organised a symposium about the EMU (Economical and Monetary Union), because it remains a hot item. This issue includes two of the presentations presented there; one on monetary policy, and the other on possible consequences for the banking industry.

      Should you be interested in a management position at Pecunia or a position on one of its committees, please read the ad in the Faria and send in your application. Applications must be received before the deadline, very shortly from now. That leaves me to wish you all happy reading. And who knows, we might be welcoming you on to our board or one of our committees.

Edith de Vos, Editor-in-Chief, Pecunia Magazine

List of Contents:

Features:

14    Research Publication           Exotic options: Types and their respective uses

                                                  A.A.J. Pelsser, Ph.D.

 19    Company Presentation         Coping with uncertainty of meeting defined benefit pension obligations

                                                  Claudia Starr

 23    Company Presentation         Auditing and brand activation

                                                  G. Vos RA, (drs)

 24    EMU Symposium                 Monetary policy in the EMU

                                                  L.J.M. Arnold, Ph.C.

 31    EMU Symposium                 EMU and the banking industry

                                                  W.W. Boonstra, drs.

 Cover story

Page 5  Herma Koornwinder speaks about the need for new investment technology and gives an example of the returns she achieved with her own investment portfolios.

Cover story

New investment technology vital to finance effects of ageing and high-tech unemployment

We are at the threshold of major social changes, similar to those during the Thirties of last century, when society saw not only the postal carriage being replaced by trains, but also the industrial revolution in the making. The current effects of increasing automation, the change from the industrial to the digital era are just as invasive.

      Our factories are headed for a production industry without workers. Routine administrative and servicing work is more and more left to computer. The “click & macro” society working in optima forma. (The presentation of the plan for the future “On our Way to 2000”, communicated by ABN Amro executive Mr R.W.J. Groenink speaks for itself: ABN Amro will trim its office network and at least 700 of their 1000 branches will be highly automated NRC Handelsblad, 25.4.1996)). And a large part of the remaining activities will simply be transferred to low-wage countries, which is easy given modern communication facilities. The following figures speak for themselves: In 1994, hourly labour costs in West Germany were DM 44, in the Netherlands DM 35, in Hungary, the most expensive central European country, DM 4.5, and in China DM 0.65 (NRC Handelsblad 16.1.96).

       Overall, the Netherlands is headed towards a situation where more investments in clever machines and computers will lead to increased profits with fewer staff. Therefore good business results no longer automatically result in better job opportunities as used to be the case. For example, the overall profits of the top 100 Dutch companies rose from 20 billion to more than 30 billion in the period 1990-1994. In the same period the total workforce dropped from 1600 to 1570 thousand (FD ….). If market conditions deteriorate, employment will drop dramatically, as we currently see in the Federal Republic of Germany (NRC 6.3.1996; FD 21.3.1996).

      And as if sharply rising costs for social security as a result of a job reduction are not bad enough, we are also facing a rapidly ageing population. Within 15 years, when the baby boomers will retire, the Dutch ageing of population will accelerate rapidly. Around the year 2040 a quarter of the population will be 65 years or older. The consequences of the ageing of the population are already tangible: health expenses were this year already higher than calculated, and next year these expenses are expected to be about one billion higher (NRC 21.3.96). And let us not forget that in 1995 already 1/5 of the national income was spent on old-age insurance (AOW), health and supplementary pensions.

      The high costs that our society will face in the near future are mainly expenses for high unemployment and the ageing population. It is unclear whether the retirement and social security funds, which will have to foot the bill, will continue to be able to fulfil their financial obligations. In 1994 and 1995, retirement funds have increased their investments on the stock market. The importance of good investment results from these funds is obvious. The required funds do not necessarily have to come from cutbacks at the expense of the individual citizen: good investment management can also lead to extra funds. The Netherlands disposes of some 770 billion Dutch guilders in retirement pension monies. According to Mr Frijns, director of the General Public Retirement Fund, premiums could easily be cut by 15% if the returns from such investments could be increased by a mere single per cent. Instead some premiums are going up, as, for example, with the general retirement fund for the metal industry (FD, 19.3.1996).

      The question that logically follows is whether a performance improvement is at all possible. After a process of years of research and testing, I have reached the conclusion that this actually is possible, namely by applying new investment models and to start investing globally.

      Married to an entrepreneur, I had a special interest in the world of socio-financial economics. I spelled out the financial parts of newspapers, visited companies, and met the managements, read annual reports, studied trade and investment journals. Yet I kept getting it wrong, i.e. I was unable to understand the financial markets using the existing methods of analysis. But my hunger for finding the pieces and solving the puzzle increased manifold.

 19960201 

Graph 1

     Therefore I decided to make my own study of the financial markets. The environmental factors, the driving forces that influence the stock exchange, the differences between company value and stock value; I questioned them all. I came to the conclusion that it pays off to remain critical about premises and also that even the most generally accepted methods sometimes will yield result, but other times will not. The following examples are illustrations of the aforementioned.

'The market is efficient'

It is simply not true that the market is always right. People actively participating in the market are rarely aware of all relevant factors. Furthermore, many an analyst’s questionnaire focuses too much on business factors and too little on market forces. Markets have their own dynamics and therefore need to be appraised on their own merits. A good example is the crash of October 1987 which had nothing to do with changes in trade and industry, but everything with the financial markets themselves. Apparently the value of shares does not necessarily reflect the correct company value.

'Risk must be spread; and risks should be managed according to the amount of risk an investor is prepared to take'

In order to limit the risk, portfolios are split up into portions, and then invested in stocks, bonds, art, gold, foreign currencies, etc. Said stocks are subsequently spread over different types of business and different countries. My research has shown that, just as in nature, one needs to have an eye for seasonal changes, i.e. changes in the risk pattern. One should try to identify the risks in the market, in order to be able to avoid them as much as possible. But since we seem to have collectively adopted the opinion that it is impossible to identify these risks, we tend to focus on limiting the damage as much as possible. In other words, people are using the same outfit for swimming as for ice-skating. I strongly advise remaining critical about any premises people might have and furthermore not to neglect a careful study of possible risks.

'
You can never go wrong with index investments'

This implies that one accepts beforehand that one’s portfolio will automatically devalue when the index makes a downturn. This is an attitude that completely contravenes all investment logic. It is therefore worth the trouble to keep searching for methods that can prevent devaluation. (See graph 1).

'The price-earnings ratio indicates whether or not the share price is realistic'

At times we notice that there are more important forces that act on the financial markets which cause fluctuations. Just think of the crash of October 1987. All funds sharply decreased in value at that time, even those with an outstanding price-earnings ratio (see graph 2).

'Stock markets go up when the dollar goes up'

This does not always correspond with reality: in exactly ten years, the value of the US dollar dropped almost 58%, whilst the Amsterdam EOE-index went up by more than 102% during the same period.

'Stock markets go up when the interest rate goes down and vice versa'

This statement, too, does not always hold.

'Investing in a well performing company guarantees a profit'

Whenever higher ranking forces have a downward tendency even the rates of well performing companies will drop. Again, the crash of 1987 is a perfect example: rates of all companies dropped in value, even those of companies with good management, good investments and excellent growth expectations (see graph 2).


19960201 

Graph 2

'Technical analysis is reliable'

Long-term research proves that it is extremely difficult to extract exactly the right signals at exactly the right time. Indicators give conflicting signals. I also learned that one always needs to stay alert about the possibility that signals may mean something other than is indicated in the books.

'It is worth specialising in a few specific shares, a certain sector or a specific country'

Should one follow this advice, one has no insight into the signals the rest of the market sends out. And these signals could be of crucial importance to the shares, sector or country in question. The market is supposed to be efficient; the price-earnings ratio is supposed to indicate if a share price is high or low; the stock market is supposed to go up when the dollar does; and so on, a long list of “stock market truths”, and none of these truths consistently holds true.

      This is why people have noted on several occasions that investment consultants have got it wrong with their advice. I have often wondered how it is possible that the majority of analysts work according to these “stock market truths” without questioning them, despite 0the fact that analysts are starting to realise that their working methods are far from ideal, e.g. at Robeco (a well-known Dutch asset management firm). It may well be that the similar education and background most analysts share has limited the professional horizon of the group as a whole.

      Another explanation might be that analysts who work in a hierarchical environment prefer to avoid discussions with their superiors, particularly when those have a fixed personal preference regarding investment strategy. The aforementioned might result in a diminished ability to critically evaluate one’s own premises and may also imply that one considers only information that supports the already existing ideas (see graph 3).

      Because I questioned everything during my long-term quest, I eventually did come across other patterns. I discovered a complex network of relations between the different parts of the global financial market as a whole. Everything that happens on the financial markets is actually ONE single process, because there is only ONE single financial market, THE financial world market. Changes in one part of it will cause certain changes in every other part of it. This discovery could not have been made using conventional methods. Modern knowledge technology, however, facilitated this, as its ability to process incredible amounts of data has made it possible to ask questions and give answers that could not have been asked and answered before.

      By using said technology during my many years of research I gained insight into this network of relationships within that one single global market.

      This enabled me to see the undercurrents that are sometimes stronger than the currents that can be detected at the surface through fundamental or technical analysis. An X-ray of the financial world gradually started to form before my eyes or, in WordPerfect terms, I learned that I could make the codes visible by pressing .

      In the meantime, I confronted analysts, banks and the media; I visited conferences, gave lectures. I often felt like an alien: there was so much ado about one single sector or a single share price, whilst the entire world was my field of work.

      In 1989, I read “A Random Walk down Wall Street” by Burton Malkiel, a professor at Princeton University. I also read the “Luchtkastelen en gouden Bergen” (Pie in the Sky and Mountains of Gold) by Wijmenga. Their vision may be briefly summarised as follows: the market is (more or less) efficient; which is why it is impossible to predict market developments, and to outperform the index – barring the occasional fluke. (I later learned that as early as 1900 Bachelier, a Frenchman, wrote in his PhD thesis that one cannot come to a proper appraisal of the market by analysing annual reports and price behaviour).


19960201 

Graph 3

       I hereby quote Wijmenga (p. 22-23): “We did not reach the conclusion lightly that the financial markets are so efficient that investment strategies cannot systematically yield an extraordinary return above the market return. It was based on extensive and thorough scientific research.” It slowly dawned on me that I was on a completely different track and that my approach was fundamentally different from that of the established academics. My reaction was to lock myself up in my study, determined to subject my model to substantial testing as well as considerable extension. This involved studying some thousand official stocks worldwide; if possible all the way back to1900.

      This is how the KGMN “Investment Scan & Navigation System” came into being, which trains itself on the financial world like a super-telescope in search of its possibilities and impossibilities. This system is able to pose the right questions in various situations that are relevant to come to an optimal investment advice. To this end the relevant information regarding the macro-economy and the financial markets is being distilled from the vast amount of data available and subsequently processed. This by means of the advanced knowledge and information technology, which enables questions and answers that were previously unthinkable, thus revealing forcefields and making markets transparent.

      This extra dimension of modern knowledge technology is what the orthodox investment methods lack. While at present digital cash flows are laser beaming around the globe in fractions of a second in search of the highest return. Accountancy firm Deloitte & Touche, who verified the model between 1989 and 1994 (see photo) gives the following unequivocal answer to the question if this model, based on modern knowledge technology actually achieves better results than others: Of the seven model portfolios KGMN composed, six managed to get a better result than the stock index in question, and the result of the seventh equaled the index. On average, the score was 10% higher in absolute terms. KGMN was also able to correctly predict 22 of the 23 turning points of market indices.

     One cannot but conclude that it actually is possible to outperform the generally achieved results. In this context, I would like to emphasise that the KGMN approach does not work like a recipe that has to be followed to the letter. The KGMN model is no more, but also no less, than one of the first innovative products in the investment business on the electronic highway.

      This does, however, touch upon a subject that will prove to be crucial for the future of our society, i.e. the new knowledge technology. Accordingly the main message of the OECD report about the connection between technology, productivity and job-creation as presented at the second G7 Employment Summit in Lille, France, was that “technology” and “knowledge” will be the most important sources of economic growth in the long-term (NRC 5.4.96). I do, however, want to emphasise that this country is at risk of missing the knowledge technology boat if we do not make the necessary investments and change our attitude. We already have a shortage of highly educated computer engineers. And while the future demand for computer scientists will explosively grow, first-year enrolments for this subject have been falling since 1988 from 1,200 to about 450.

      If we want to change this trend we shall first have to start raising our “Nintendo kids”, i.e. primary school children, in the spirit of Bill Gates. He is advocating a computer per household. I would like to go even further and advocate a computer for every child. The laptop should become today’s child’s slate and piece of chalk. Keep in mind that there are schools in the Far East that use computers all the time. In the meantime, however, some Dutch primary schools have one or two PCs, but whether these are being used depends on the teacher. In other words: others will not hesitate to grab the opportunities that we choose to ignore. In order to be able to react adequately to the approaching changes we will first need to realise that this is just the first phase of an enormous transformation process and that the digital era will hit us like a tidal wave.


19960201

Graph 4

       
   
    This transformation process will be of unimaginable dimensions and inevitable. We will have no choice but to change with it. In general, our society does not yet fully appreciate the scale of this process: people are either too busy trying to maintain the system, to pay attention to what is going on, or people are sitting at home, defeated and struggling to get by on welfare benefits.
But those sitting at home could actually be recruited, particularly those with a solid educational background and experience who were deemed “too old” at the age of 35.

      In this respect I would first like to advocate that students be given more time to finish their education and given time to think and find new paths. The digital age and its “emerging sciences of complexity’ is already casting its shadow forward over our society. In the not too distant future economics students will no longer be able to rely on what they were taught and will have to find their own way on the “electronic highway” and in a subject matter so extensive, complex and interdependent that the human mind can hardly begin to grasp it. Furthermore, I would like to make an appeal for:

*     A Ministry for Information Science and Technology.

*     Observers and spotters who scour the world in search of new possibilities (similar to purchasers of department stores).

*     TV programmes and special newspaper pages about new developments in the area of information technology in order to spread the message widely and limit the chances of reinventing the wheel.

*     National and regional advice centres to support high-tech and “new knowledge pioneers.

*     A yearly event where high-tech starters and “new knowledge pioneers can present their knowledge and expertise.

*     Faster acceptance and integration of the “new knowledge”.

       We are leaving the industrial era to enter into the digital era; the era of knowledge and information technology. We have the opportunity to take our thinking to a higher level and accelerate our actions, resulting in unimagined possibilities. This would, however, mean seizing the opportunities the information era offers. And not only the Deloitte & Touche report shows there are plenty of opportunities, more very good results were achieved later on, as the example below shows.

       Explanation

       The investigated period is about 10 months, from June 2nd, 1995 until April 4th, 1996. Results of the first quarter of 1996 are also shown. The following criteria were used:

*     Each fund used the same amount of Dutch guilders;

*     An “all-in fee” of two per cent per year for transactions, management and advice is applicable;

*     Currency mutations have been taken into account.

 19960201      NB: This portfolio has been provided to the magazine Cash as a one-off. This is why the usual adjustments by the manager/advisor did not take place and the possible paid out dividends were not recorded, which they obviously would have been in a normal situation.

      When summarised a picture (see table) is formed of the results expressed in percentage, per region, compared to the relevant index.

     Conclusion

*     The portfolio as a whole did outperform the MSI World index over the first quarter of 1996 by +4.2% and by +9.9% over the last 10 months.

*     Furthermore, the regions also realised an outperformance, with the exception of the 10-month-period in the Far East. The most remarkable results were the European outperformance by +7% and +10% respectively compared with the Euro-100 index.

*     As expected, the Swiss index went up by +11% until the end of 1995, and the French index went down by -3.2%. In the same period, the Euro-100 index went up by 8.4%, which resulted in an outperformance of +2.6% by the Swiss index.

*     Eight out of the 48 funds were negative at the end of 10 months, whilst 29 of the 48 funds, i.e. 62%, did better than the index. The statistical chance of such a high score being sheer coincidence is close to nothing.

Graph 5 shows more details of the results.

H. Koornwinder.

 

 

1 Q
1996

Last 10 months

Index

1 Q 1996

Last 10 months

Outperf.
1
 Q 1996

Outperf.
10 months

Netherlands

15,8%

28,5%

AEX

10,6%

24,0%

+5,2%

+4,5%

Rest of Europe

6,8%

19,5%

Euro-100

5,7%

14,6%

+1,1%

+4,9%

Europe (incl. Netherlands)

12,7%

25,4%

Euro-100

5,7%

14,6%

+7,0%

+10,9%

Far East

6,4%

3,4%

MSCI Pacific

5,5%

4,7%

+1,1%

-1,3%

Total portfolio

11,6%

23,2%

MSCI World

7,4%

13,3%

+4,2%

+9,9%

 

 

 

 

 

 

 

 

Switzerland

…%

…%

Euro-100

5,7%

14,6%

 

 

 

Table

 

19960201 

Graph 5

Positioning of KGMN Portfolios

The positions of a number of KGMN’s advice portfolios measured by the results during the first quarter 1996 are detailed below.

 Stocks Netherlands                                                                 Stocks Worldwide

         3 months                                                                           3 months

19960201 

Source: ABN Amro Asset Management, as published in ‘Het Financieele Dagblad’    April 18, 1996

Curriculum Vitae – Herma Koornwinder

Education and Work Experience: self-taught

A life of reading, reflecting, asking questions, not accepting “certainties” as truths, rejecting, researching, developing, checking and putting knowledge to the test.

*        Research into the effectiveness of fundamental and technical analysis of the financial markets.

*        Research into the acceleration and slowdown of the economic situation, cyclic waves and economic regularities and their consequences. Trying to find an explanation for random fluctuations.

*        Research into the investment results of investment and retirement funds.

*        Comparative research into and putting to the test of “the vision” of some 15 national and international investment journals.

*        Research into the effectiveness of financial investment software.

Results: exposing the laws and rules of an underlying forcefield. Developing the KGMN model and testing it in a laboratory environment.

Professional Experience

Advisor to large institutional investors. A report by Deloitte & Touche confirmed the effectiveness of the advices by KGMN over a period of five years. Many interviews, lectures and publications. Took a stand against the “efficient market theory”, the Modern Portfolio Theory, index investments and random dispersion when the risk is not known.

Initiator and advisor of the KGMN Global Portfolio Fund for private investors and the KGMN.



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Maverick KGMN partners up with securities firm Stroeve

1996-02-20, Het Financieele Dagblad

Herma Koornwinder, of Koornwinder Global Market Navigation (KGMN), is an outsider in the investment world. For years she has been battling time-honoured investment profundities. Her own model meets a lot of scepticism from established analysts. But the time seems ripe for her ideas. She is consulting several institutional investors and as of March 1st, individual investors can invest according to the Koornwinder method at securities firm Stroeve.

      The collaboration with Stroeve is the final step towards recognition for KGMN. Earlier accountant agency Deloitte and Touche verified KGMN’s predictions over the period 1989 – 1994. The report of end 1994 concluded that virtually all trends predicted by Koornwinder for various stock markets, turned out to be right. The theoretical portfolios outperformed the corresponding indexes with 10% on average over the period 1992-1994.

      As of next month, individual investors can open an account with securities firm Stroeve. The bank will invest the entrusted money entirely according to the advice of KGMN, against a fixed management fee of 2%. President J.E. Stroeve expects to start with a managed capital of about ƒ10 million. “If it catches on, we will convert it into an investment fund.” says Stroeve. “The critical limit will be 20 or 25 million guilders.”

      KGMN has a unique view on investing. The current investment models belong in the waste baskets according to president Koornwinder. “They go against every logic and are not in line with the reality of the financial world, which is why they are underperforming the market.”

      Most investment models are based on fundamental analysis, which considers the developments in the realistic economy as directing for financial markets. According to Koornwinder this leads to all kinds of established truths that are incorrect. “It is not true that ‘the market is always right’. Participants are not aware of all relevant factors.” The list of questions of analysts therefore focuses too much on the business factors and too little on the markets. “Financial markets have their own dynamics. The stock market crash of October ’87 had nothing to do with parallel or future strong changes in business.”

      Another sacred cow is spreading the risk. “This entails investing in uninteresting markets”, says Koornwinder. You need to make use of seasons and only invest where there is money to be made.”

      But how does Koornwinder recognise those golden opportunities without running high risks? “One should map one’s risks and avoid them as much as possible. That is what my model does”, says Koornwinder. “The minimal risk is the same for every investor.” It is difficult to get insight in KGMN’s methodology. Even after Koornwinder’s explanation, it remains somewhat mysterious. The model is a mixture of technical and fundamental analysis. Technical analysts base their predictions on financial economic figures. “Either method on its own left too many questions unanswered”, says Koornwinder. “However, by merging them, I discovered crucial indicators.”

      According to Stroeve, detailed insight into the analysis of KGMN is not required. “Investors are only interested in the money they gain.” An individual investor who is investing ƒ6 million according to the advice of Mrs Koornwinder, shares that opinion. “In my experience one equally has no idea what is happening at the established banks and securities firms. But the results of KGMN are considerably better.”



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Market undercurrents: The key to good results

1996-03, Beursplein 5

As of March 1st, individuals can invest in line with the advice of Herma Koornwinder at securities firm Stroeve. President Hans Stroeve expects to start with a managed capital of about 10 million guilders and ‘if it catches on, we will turn it into an investment fund’.

      Self-made analyst Herma Koornwinder, president of Koornwinder Global Market Navigation (KGMN), from the Dutch town of Heeze, has been convinced for years that she is outperforming the market and the average institutional investor. Last year she was proven right by accountancy agency Deloitte and Touche. After verifying the predictions, KGMN publicly made over the period 1989-1994, the accountants concluded that out of the seven portfolios KGMN had composed, six had a better return than the stock market index. The seventh had a more or less similar result. On average, the performance was 10 percent better. In addition, global market fund KGMN correctly predicted a turning point in the stock market indexes 22 out of 23 times. Last year, she handed the accountants report to stock market chairman B.F. Baron van Ittersum.

      What is the secret behind Koornwinder’s success? She does not want to share that, but it is clear that, according to her, most commonly used investment methods fail when seriously researched. “The modern portfolio theory, index investing, risk-spreading, the growth stock trend, the synergy trend, the ‘what’s in it must come out’ trend, the ‘buy low, sell high’ trend, the technical analysis; none of these methods allows for consistent good results,” Koornwinder firmly says. The thousand-dollar question is which method does? According to Koornwinder, the trick is to properly estimate the right undercurrent of the markets.

      “Rates can go up euphorically, but if the undercurrent is weak, you need to be careful. I am using a scale model, so to speak, which constantly weighs values, both for markets as a whole as for individual funds. Mass psychology plays a considerable part in that.”

      Sceptical observers believe that Koornwinder has been very lucky. She shrugs her shoulders to that and, as yet, rightfully so. It could very well be that Koornwinder belongs to the small group of large money managers that seriously outperforms the market on a regular basis.



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The ‘Happening’ signals the beginning of spring

1996-02-03, De Tijd (Belgium)

By BT

It is almost time for what some like to call the ‘investor’s high mass’. Another extensive programme will be presented on March 16th, which will also herald stock market spring. It will be the beginning of a lot of hard work for the participants; clubs have the advantage that they are entitled to at least three representatives to garner their advantage at the various sessions.

      In the meantime, the day will commence with a lively debate that could hold some surprises. While Professor C van Hulle (University of Leuven, Belgium) poses the far-reaching question if ‘holdings have added value’ to a panel, L Bertrand (Ackermans & Van Haaren) and J Huyghebaert (Almanij) present their practical experience; after which they are interrogated by Professor R van der Eelst (EHSAL). Moderator M Janssens (Petercam) is expected to fuel the discussion.

      There are daily problems attached to the exchange market. ‘Interest evolution and currencies’ (Professor Fr Boll) remain intriguing on a daily basis. The Brussels stock exchange needs to keep focussed in order to evolve towards the year 2000; J Neven will clarify this. Ph Janssens (An-Hyp), on the other hand, might know if investing in bricks is a good idea. It seems to be, because the recent case of Desimpel has taught that the stock has been thoroughly undervalued. The stock markets will remain the subject of discussion until the end of times; they should always be there as democratic establishments and as mirrors of a particular area of the trade and industry. The proposed new measures by Ph Maystadt to attract risk-bearing capital might spice things up a bit.

      Indeed, the stock markets can be choppy, often to the advantage of investors (although the risks are already calculated), but they actually experience what every manager experiences. Then it is the turn of Royale Belge (Schokaert), Belcofi (J Suykens) and Telinfo (J Cordier will directly supervise the telephone happening). The second round will be performed by Delhaize (J Coppieters t’ Wallant), Walibi (E Meeus) and Terca Brick Industries (Chr Dumolin will probably draw his conclusions from the troubles of his rival Desimpel).

      The actual stock market is being supervised by E Belmans (BBL) on behalf of the Belgian stock exchange, M Neven (KB) on behalf of the South-European stock exchanges, and R Leroux who will be talking about investing on the South African stock exchange, which is rapidly gaining attention.

      The traditional internationally flavoured climax will be provided by Mrs Koornwinder who foresees a ‘revolution on the financial markets’ which is will be caused by the advancement of the electronic highway. She insists in all her communications that she is outperforming the markets spectacularly; hopefully, the participants will be able to filch from her just how to go about that practically. Douglas C Johnson (Merrill Lynch) deemed it important enough to come all the way from New York especially for the VFB to tell how American stock exchanges (usually) react during an election year, with an off-the-record (American) vision about what is going on with (certain) emerging markets. This will be of interest to many. The VFB is extremely timely with its programme, and no doubt the smart lecturers will be able to make their speeches topical with reference to the future.

      The stands have been the biggest success of the Happening for many a year. It enables companies and services to make direct contact which is exactly what the federation strives for: to facilitate dialogue in interactive encounters; through company visits and with already three meeting points (Brugge, Antwerp and Hasselt) where people are able to follow up on and talk about what has happened on the stock exchange on a weekly basis, and also through chit-chat at Happening stands. As of 9am, representatives will be available for those who are interested (March 16th, Alpheusdal, Berchem Antwerpen; take bus 9 from Berchem station).



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Rabobank Groningen and Environs provides insight into investments

1996-03, Own edition Rabobank

A good prediction has always been very valuable. What would have happened, for instance, if the population of the Greek city of Troy had believed the psychic princess Cassandra who predicted the fall of their city?

      For today’s investment world, good predictions are crucial. The success of an investment stands or falls with a good analysis of the price trend of a stock or bond. But how do investment consultants determine their buy and sell decisions? What do they base their statement about the price trend of stock or bonds on? It is very fascinating to know how renowned investment analysts predict the price trend.

      There is always a great need for a reliable prediction method in the investment world. There are two traditional ways of predicting:  fundamental and technical analysis. Fundamental analysis evaluates a company on its rational turnover data, growth and history.

      Technical analysis is a newer method and consists of extending developments in the price trend over a certain period. The statistics are displayed in an overview. These overviews, called charts, show the highs and low. These in turn can be translated into support levels and resistance levels. The thus created patterns provide a basis for a future prediction of the company. Many investment consultants believe that neither technical nor fundamental analysis is able to achieve a return in the long term that outperforms the market indexes. In other words, the traditional methods of prediction fall short.

      Successful analysis

      Thanks to modern communication applications, and the electronic highway, more information is more quickly accessible to more people. Because of this, the global interdependency of rate-determining aspects is increasing. This has an effect on all financial markets. Therefore, today, it does not suffice any more to base your investment analysis on a mere annual report or the price trend of a stock. The most successful investment analyses of the moment make use of the several new information possibilities on the electronic highway.

      Mrs H. Koornwinder is one of the most successful and interesting investment consultants. Her advice often is controversial and different from popular belief. However, her particular method appears to be very lucrative. The results of the Koornwinder method have been thoroughly tested by the accountancy agency Deloitte & Touche. Her performances have been compared to the corresponding stock market indexes and to that of the Morgan Stanley Capital Market Index (MSCI), the leading world index for stock in the financial world. Koornwinder’s barometer provides the correct analysis. In 22 out of 23 cases, her alternative predictions turned out to be correct.

      Koornwinder predicted the dramatic stock market crash of 1987 and was the first to predict its recovery. Her investment advice has been outperforming those of the stock market indexes for quite some time. Six of her seven international investment portfolios performed an average of 10 percent better than the market index, the seventh equalled it. So it is not so strange that large pension funds are using her crystal-clear analyses.

      What makes the analysis method of Mrs. H. Koornwinder so unique? Put simply, it is because she introduces techniques of the 21st century into the 20th century. In contradiction to most investment consultants, she optimally uses the possibilities of the electronic highway. In her analyses, she makes use of topical information from all around the world. In addition, her method differs from the ‘traditional’ work method because it not only takes into account financial and economic factors but also hard-to-translate elements of natural science, philosophy and mass psychology.

      Investing is, with reason, less and less associated with speculating. It hardly needs any explanation that one needs to be reasonably well-to-do to be successful in investing. But the world of investment certainly is not exclusively for the rich among us. Anyone with a savings account of more than 50,000 guilders should have a talk with Rabobank.

      Investment night

      To inform you about the possibilities of investing, Rabobank Groningen is organising an investment night on Tuesday  April 9th and Wednesday  April 10th  at which Mrs H. Koornwinder will give a lecture on her successful method of analysis. She will unveil a number of the basic techniques of her method. Mrs. H. Koornwinder is leading the independent financial economic consultancy KGMN, Koornwinder Global Market Navigation. Her prediction method made the news through, among other things, her appearance on the Anno Joosten TV show. Of course, there will be enough opportunity to exchange thoughts with her.

      In addition, Mr H.W. Koster and A. Middel will take the floor. These two investment consultants of Rabobank Groningen and environs will talk about investing, the risks and returns. Through personal advice on a daily basis, they make sure their clients get a grip on developments in the financial market. They give clear scenarios and clearly outlined plans so that everyone knows how to act. It is often forgotten that investing can provide as much certainty as other forms of saving. Investing can be a solid financial activity.

Mr A. Middel will give an introduction on April 10th on the theme ‘Emotions and Investing’. About the cohesion between emotion, risk and return. Investment consultant H.W. Koster will discuss ‘Risk and Return’ about defensive and cyclic funds and their sensitivity for economic ups and downs.
Rabobank Groningen and environs hope you will look back at a successful night.



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Koornwinder takes first step towards investment fund
Challenging KGMN method within reach of private investor

1996-03-09, Eindhovens Dagblad

By Chris Paulussen

For some years, Herma Koornwinder, from Heeze, has been causing a certain amazement with her unflinching analyses of the financial markets and, since the beginning of this month, private investors have been able to make use of the method developed by KGMN (Koornwinder Global Market Navigation). This initiative is taken in collaboration with investment bank Stroeve and is the first step towards an investment fund.


19960309 

Herma Koornwinder: what will happen in the future is dazzling

       There is, above all, amazement and disbelief whenever Herma Koornwinder shows the results of her broadly spread trends on the financial markets. A report from tax and accountant office Deloitte & Touche, following their thorough investigation of her work, is clearly substantiating the reliability and truth of her declarations. Yet, some institutional investors, above all retirement funds for whom all her work is claimed to be done, keep the boat away from the shore with the argument “that there has never been actual proof of it”, as Koornwinder claims.

      Koornwinder operates under the name KGMN (Koornwinder Global Market Navigation) and seems to be more successful in convincing private investors, which is the reason for setting the first step towards an investment fund managed according to the KGMN method, and in collaboration with investment bank Stroeve. Since the beginning of this month, private investors can put a minimum of 100,000 Dutch guilders into an account that will be managed according to instructions by Herma Koornwinder. Pending permission from Nederlandsche Bank (Dutch National Bank) and the Securities Board (STE-Stichting Toezichthouder)*, a number of investment funds will be set up. Once this has been granted, the initial investment can be lowered. First we need a good start, says Koornwinder.

      Following consultation with her business counsels, Koornwinder chose to go into this business venture with an investment bank. Public interest in KGMN has lately seen a tremendous rise.  “With the investment fund set up and managed by a bank I have my hands free for my specialty, research,” said Koornwinder. In Koornwinder´s opinion, conventional investment models no longer work. She points out that the use of new technology allows information to go around the world in a flash, overtaking old and conventional knowledge. We have reached the eve of a new era and the prospects of the future are mind-boggling.

      In an earlier interview with this newspaper, Herma Koornwinder ascribed the strength of her method to the incredibly meticulous, almost microscopic, assessment of developments in the world, without limiting herself to one area of finance and economy. This is how she gradually developed her “global scan” for assessing the markets.

      Over the years, she has been insistently warning institutional investors with her forecasts. In particular, she tried to convince retirement funds of the reliability of her own investment technology. “This is the social aspect of my story,” she says. “If retirements were able to improve returns on their investments by only one percent, they could lower premiums by 15%. Some retirement funds welcomed Koornwinder as an advisor but, according to her, “some retirement funds have a real problem following off-standard advice, as their own staff stiffly follows the generally accepted opinion”. She said: “In mid-January 1994, e.g. whilst my indicators were very weak, there was a generally euphoric market sentiment, and in such circumstances it is quite a task to go against all major analysts.

      Lower threshold

      Koornwinder can see possibilities for setting up an investment fund for institutional investors: “A fund with easier access into which people can invest a certain amount to which they can add later if things go well.” Koornwinder´s model portfolios are proof that she is able to regularly beat the stock market: “The aim of such investment funds is to achieve a considerable return and future asset growth, but of course no-one can give any guarantee for the future. In the end, my aim is to have the fund listed on the stock exchange, but everything at its good time! This requires equally careful preparation as the development of my investment model.” Koornwinder is very pleased about the enthusiastic responses she has had, even from far-away foreign countries. Despite it all, she stays calm and level-headed: “If it does not work I can still go golfing, as I have always said.”

*    On 1.3.2002 STE has been changed into AFM: Autoriteit Financiele Markten (Financial Markets Authority)



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Spreading of portfolio does not reduce risk at all
Investment analyst Herma Koornwinder overthrows traditional investment wisdom

1996-03-13, De Tijd (Belgium)

By PHu

HEEZE (time) – ‘Ignore the world news. Do not diversify your portfolio. Do not solely focus on the interest, the dollar and economical growth.’ Not exactly the exchange tip-offs one would expect from a professional investment analyst. Nevertheless these are rules Dutch ‘guru’ Herma Koornwinder applies in her model. Successfully, by the way.

     ‘Other forces, that are of such importance that they overshadow all other data, are active on the global financial market’, she confided to us. ‘From my infancy I have been interested in the financial and stock market business. I wanted to discover the invisible forces behind the evolution of exchange rates. The common analysis techniques, however, brought me nowhere. One can visit the company, have lunch with the board, know everything about the annual statistics... and still be unable to predict the development of a share. I went on to study economics and took subscriptions to about 15 financial trade journals. But alas, I was still unable to determine the invisible forces. There was, however, another phenomenon that attracted my attention: the fact that analysts base their studies on the same data, but still manage to come to very diverse opinions. These findings led me to the conclusion that the traditional stock market truths do not work properly.’

      Herma Koornwinder, creator of the stock market system Koornwinder Global Market Navigation (KGMN), is a remarkable figure in Dutch financial circles. She makes use of her computer technology and knowledge technology skills to follow the markets in her own idiosyncratic way. She became widely known because of her original, revolutionary opinions and especially for her terrifically working investment model. She foresaw the Wall Street crash of 1987, as well as the collapse of the Japanese stock market as of 1990, the bond market crash of February 1994 and a number of other major trend changes.

      Her – usually unconventional – predictions were accurate to such a degree that the financial world started questioning the legitimacy of her practices. To protect her credibility she decided to hire accountant agency Deloitte & Touche. They concluded that Koornwinder’s predictions were actually confirmed by the facts.

      Koornwinder’s model follows 22 countries and approximately 1,000 shares. So far Koornwinder’s advice has been exclusively provided to institutional investors. Before long, however, Dutch securities firm Stroeve will start a mixed fund for private investors which will be managed according to Koornwinder’s advices. Subscription is now open to interested investors.

      Other forces

      Herma Koornwinder did not take creating her model lightly: ‘I have studied approximately 500 possible price-sensitive factors for many years. And guess what? Yes, of course these factors have an impact on the stock exchange, but there are other forces active, that are of such importance that they overshadow the known factors. It is those other forces that I use in my model.’

      The analyst is not willing to reveal the exact nature of these ‘forces’, but is willing to talk about certain important natural laws. ‘The crux of the matter is the fact that there is only one global financial market: what happens on separate markets is actually one all-embracing process. But what do fund managers and financial establishments do? They view this market in a fragmented way, because they make use of a dollar specialist, an interest specialist, a US specialist, and so on... I bring all parameters together in one model thus risking fewer mistakes.’

      ‘Another observation is that the markets are all but efficient’, Koornwinder continues. ‘I attended a seminar in 1989 themed ‘sense and nonsense of rate predictions’. The major fund managers decided there and then that rate predictions were futile, because all data had already been processed in the rates. What rubbish. If I, as an analyst, am of no added value, how do you explain the fact that my model systematically outperforms the market?’ Six out of the seven portfolios KGMN put together outperformed the index. The seventh equalled it.

      Another investment profundity ‘diversify to reduce the risk’ finds no favour in the eyes of Koornwinder: ‘It is all about investing purposefully. When one gets on a train, one needs to know where it goes. Thus one runs fewer risks than with investing in a lot of different markets, because some of those are bound to be less interesting.’

      Furthermore Koornwinder does not let the world news influence her. She limits herself to her indicators. ‘This sometimes leads to funny situations. For example, on January 14th, 1991 – a couple of days before Norman Schwarzkopf and his troops invaded Iraq – I predicted a substantial rate increase. The analysts who were predicting a new crash told me at the time: ‘What optimism. Are you already predicting the outcome of the war?’ I refused to be influenced by the conflict and had nothing to reply to them’, she laughs. ‘But the rates did shoot up after that.’

      Hedge funds

      Koornwinder deems the factors described as ‘technical’ that lead the rates, very important: ‘Twenty years ago 90 percent of rate fluctuations were caused by fundamental factors and 10 percent by speculative factors (neither based on own business nor on macro-economic factors). I recently read that 10 percent of the current fluctuations is fundamental and that 90 percent is speculative. These developments are beyond the scope of traditional analysis methods. This market, crowded by hedge funds and downstream products, has been integrated in my model.’

      Herma Koornwinder winds up: ‘I strive to track and eliminate the risk. The profundities currently in use in the investment world only add to the risk.’ Herma Koornwinder will speak on Saturday March 16th at the VFB investors Happening about ‘Revolution on the financial markets, opportunities on the electronic highway’.



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Flemish investors remain unsatisfied at VFB-happening
Johnson alone provides tangibility

1996-03-19, De Tijd (Belgium)

By ToP

BERCHEM (time) – Over a thousand investment enthusiasts spent last Saturday at the annual Happening of the Vlaamse Federatie van Beleggingsklubs (“Flemish Federation of Investment Clubs”, VFB). On the whole they remained quite unsatisfied. They needed to wait until the last lecturer to obtain some tangible information. Merrill Lynch investment strategist Douglas Johnson lived up to the high expectations.

     The VFB high mass at the Alpheusdal in Berchem was buzzing last weekend. No doubt the excellent state of affairs at the stock markets played a part in that. The small investor uses the annual VFB seminar to strengthen ties with the trade and industry. Here, he is able to pose his questions at the stands of banks, stockbrokers, listed companies, investment magazines and the Brussels stock exchange. Various explanations about the hot financial potatoes broadened the view on investment opportunities. Moreover six companies listed on the Brussels stock exchange had come to personally introduce themselves.

      In other words plenty of atmosphere and general information, but when it comes to tangible tip-offs Berchem was not the place to be. What was told remained vague. The explanations of the invited companies were little surprising. Amongst the financial analysts only Frank Böll and Herman van der Loos were a cut above the rest. The explanation about South-Africa did not enlighten the investor either.

      In the afternoon Herma Koornwinder came to explain her ‘revolutionary’ investment model. ‘I have read and heard a lot about it’, was the hopeful introduction of Koornwinder by VFB chairman Dierckx. ‘Which is why I wanted to hear from her in person, because it promises to be spectacular.’

      The promised spectacle did not come off. The down-to-earth Fleming still believes in investment truths such as risk spreading, the influence of the dollar, efficient markets, and so on. Koornwinder’s ‘tosh’ about her high-tech computer based investment model – product of years of research – did not appeal to the Flemish investor. One attentive investor may have been on the money when he made the remark that, unlike other pension and investment funds, Koornwinder is able to move her capital freely in and out of different financial submarkets. No tip-offs from Koornwinder. ‘I am bound by the contracts with large banks’, she defended herself. Koornwinder back to square one.

      Douglas Johnson was the last lecturer and concluded the day. The international strategist of American stockbroker Merrill Lynch named a number of factors that will have a decisive influence on investments in 1996. ‘The general liquidity of the financial markets has returned since the beginning of 1995. This surplus is responsible for a gradual shifting in the market’, Johnson explained. This year will be the year of the growth markets. The distrust that existed during the Mexico crisis has gradually subsided. The returned trust leads the investor to Hong Kong and Taipei. Japan should not be overlooked either. ‘An investor cannot do without Japan’, Johnson emphasised.

      The attractiveness of American stocks diminishes, notwithstanding the fact that the American interest will be lowered with 75 base points in June. After all, the engine of the American economy is starting to sputter. Only the American bond market will be able to fully profit from this interest rebate.

      The American slowdown of growth does not mean that Johnson no longer believes in American companies. ‘US and UK companies are the only ones who have successfully implemented their restructuring. On the European mainland, however, and especially in Belgium and Germany, the profit margins declined. In the long term this will become a problem. Add a stronger dollar of 1.60 DM, maybe even 1.70 DM to the equation and any good listener will understand that investing in Europe will be problematic. In my opinion only France and Italy might be worth a shot’, clarified Johnson.

      So in order to succeed one should invest in growth markets this year. ‘The emerging markets and Japan will become the success stories of 1996’, Johnson thought optimistically. ‘The Hong Kong and Taipei stock exchanges are being underestimated. It is also possible South Africa will have a good year and South Korea might be able to hook up as well’, Johnson continued.

      One last tip-off from the strategist: ‘In order to run the least risk and obtain optimum profit, my advice is to invest 22 percent of one’s portfolio in growth markets and the remaining 78 percent in traditional markets.’ Good natured Johnson looked a prosperous man.



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Mrs Koornwinder keeps scoring

1996-05-25, Beleggers Belangen

To the readers of Beleggers Belangen, Mrs H. Koornwinder, of Koornwinder Global Market Navigation (KGMN), is no stranger. Her often headstrong but successful investment approach has resulted in collaboration with securities firm Stroeve.

      At Stroeve, individual investors can invest money which is managed entirely in line with the advice of KGMN. The first results are – not to our surprise – very good. The Global Portfolio has a royal outperformance in comparison to different indexes.

      With regard to the MSI World Index in the first quarter of 1996 + 4.2 percent and in the past 10 months + 9.9 percent. The European ‘outperformance’ is remarkable: respectively + 7 percent and 10.9 percent. With the exception of the Far East, there was an outperformance in all regions. For investors who are regarding these outcomes with some scepticism, the following line is added to the report: “The statistical chance of a score as high as this being coincidental is virtually nil.”



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Dutch Garzarelli avoids drop in rates

1996-07-26, Het Financieele Dagblad

Prior to the rate drop in Amsterdam, Herma Koornwinder liquidated the entire portfolio of the KGMN Global Portfolio Fund (KGPF). As in 1987, the Dutch Garzarelli was one of the few to correctly predict a crash.

      At the Amsterdam securities firm Stroeve, with which Koornwinder collaborates as of recently, they jokingly call her Herma Garzarelli after her American counterpart Elaine who, just like her, was one of the few to correctly predict the stock market crash of 1987. Koornwinder commissioned Stroeve to drastically change the composition of the investment fund.

      ‘They did have some difficulty with that at Stroeve,’ says the self-made stock market guru to Dutch press agency ANP. ‘Did I not act a little too much like a trader? But eventually they agreed.’ Koornwinder decided to wait and see for a bit longer, just to be sure. But on July 8th she was afraid to postpone any longer. Just in time, as it turned out. Immediately after this, all financial markets took a turn for the worse. The Amsterdam EOE index has since dropped 8.25%, whereas the Japanese Nikkei index and the Dow Jones respectively dropped 7.2% and 4.2%.

      The total capital of KGPF is currently safely on deposit. Koornwinder: ‘Only when the indicators come around will we start investing again. For now, however, that is not the case.’

      Koornwinder

      It was not very surprising that Stroeve’s securities experts were reluctant when on July 8th she ordered that all shares should be sold. The investment fund had been established just a couple of months before, in May. Private investors invested a total of 2.1 million Dutch guilders in the investment fund that invested globally, including the Netherlands where Koornwinder invested mainly in technology funds such as Baan, Getronics and Volmac that have increased considerably during past months.

      Koornwinder will shortly launch an investment fund for institutional investors, the KGMN Institutional Fund, although this time not in collaboration with Stroeve, but with another bank whose identity she does not want to reveal yet. Koornwinder is no stranger in Dutch financial circles, albeit relatively unpopular, which is partly due to her rather peculiar preparatory training. She caught the investment bug about ten years ago through self-tuition. Rather to her own surprise, she successfully predicted the 1987 stock market crash on Wall Street at exactly the right moment. This did not go unnoticed. She gave a series of lectures, but a real breakthrough failed to materialise.

      It took Koornwinder years of lobbying to finally find a ready ear at Stroeve. The major Dutch investors do not pay attention to her. This does not make her sad. Neither is she in want of money. Her biggest wish? To live to see the day that Dutch pension funds convert to her strategy, and that they no longer, as they tend to do now, sit on the same stock for many a long day: ‘If I am able to contribute to the financing of the rising costs of the ageing of the population in that way, that would be enough for me.’

      The Dutch stock market guru is aware of the fact that some are comparing her to Garzarelli. It was just at the beginning of this week that the American analyst scared Wall Street with her prediction that the rates would drop another 20% during the coming weeks. Koornwinder does not mind this, but feels the comparison is faulty: ‘She has been wrong more often than I have been these last couple of years.’



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The financial seer of Beursplein 5
Herma Koornwinder, investment strategist, is outperforming stock market guru Garzarelli

1996-07-26, Leidsch Dagblad

By Jan Smit

AMSTERDAM ANP

Her name is Herma Koornwinder, but at the securities firm Stroeve, she is also referred to as Herma Garzarelli, after her American counterpart Elaine Garzarelli, who, just like her, was one of the few to correctly predict the stock market crash of 1987. That nickname is not meant in a cynical way. To the contrary, Koornwinder was one of the few to correctly predict the current rate drop on the international stock market at the start of June.

     But there is more: she put her money where her mouth was. As investment strategist of the KMGN Global Portfolio Fund, she commissioned Stroeve, with which she collaborates as of recently, to make some drastic changes to the composition of the fund portfolio. “At Stroeve, they had some difficulty with that,” the self-made stock market guru explains. “Was I not acting too much like a trader? Eventually they agreed, but they did want me to confirm everything in writing.”

      Koornwinder observed the market a little longer, just to be sure. But on July 8 she did not dare to postpone any longer and ordered the liquidation of the entire portfolio. Just in time, as it would appear. Shortly after her order, the financial markets hit their turning point and the stock market indicators dropped several percent. Since then, the Amsterdam EOE index dropped 8.25 percent, the Japanese Nikkei index and the Dow Jones respectively 7.2 and 4.2 percent.

      Currently the total capital of the fund is safely on deposit. “Only when the indicators come around, we will invest in stock again. But for now, that is not the case.” It is not strange that the securities experts were somewhat reluctant when she commissioned to sell all stock. After all, the fund was established in May. Individual investors invested a total of 12.1 million guilders in the globally investing fund. In the Netherlands Koornwinder mainly invested in technology funds such as Baan, Getronics and Volmac, which have all significantly increased in the past couple of months.

      Soon, Koornwinder will launch an investment fund for institutional investors. Not in collaboration with Stroeve, but with a bank she does not want to reveal yet. Koornwinder is no stranger in financial circles, but she is relatively unloved. Through self-study she was infected with the investment virus about ten years ago. To her own surprise, she successfully predicted the stock market crash on Wall Street on exactly the right moment. That did not go unnoticed. She gave several lectures, but she did not manage to break through. “They called me a financial seer. Their models were doing fine, were they not? Investors never complained. And if they did, the dollar or the interest were to blame. There was always an excuse,” says Koornwinder.

      Confident as she is, she persisted. In 1994, following the advice of J. Wichers, professor at the Rotterdam Erasmus University, she commissioned accountant agency Deloitte & Touche to verify the models she had used over a period of five years. She passed with flying colours. According to the accountants, Koornwinder succeeded in outperforming the leading stock market indexes by a long shot. Last year, she handed the results to stock market chairman Baron B. van Ittersum. According to the analyst, he was “very impressed”.

      Her secret? “I do not do fundamental analysis. Annual reports, etc, are, of course, important, but are not on top of my priority list,” she explains. She uses other indicators, depending on the stock market environment, in her self-developed method: Koornwinder Global Market Navigation.

      The Dutch stock market guru is aware that some people compare her to Garzarelli, who scared Wall Street earlier this week by predicting that the rates will drop another 20 percent in the upcoming weeks. Koornwinder does not mind, but the comparison falls short according to her. “In the past couple of years she has been off the mark much more than I was. Furthermore,” the Dutch specialist adds, “Garzarelli’s bed was already made. Her father was a banker, but I had to fight my way into the financial world using my results.”

      There is also a world of difference between the American stock market guru and Koornwinder with regard to success. Garzarelli was employed by the renowned American securities firm Lehman Brothers after the stock market crash in 1987 for a salary of no less than one million dollars per year. Today she is self-employed and she may count several leading American pension funds and institutional investors to her clientele. Koornwinder however had to fight and lobby for years, before receiving any recognition. The large investors in the Netherlands refused to listen to her. She does not pout about it, nor is she short of money. Her big wish? That, one day, the Dutch pension funds decide to use her strategy. And not, as is currently the case, stick with the same stock until the end of days. “If I can make a contribution to the growing costs of the aging of the population that way, it will have been worth it.”



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‘Self-made’ stock-market guru predicted depression again

1996-08, diverse ANP dagbladen

AMSTERDAM

Her name is Herma Koornwinder, but at the securities firm Stroeve she is also referred to as Herma Garzarelli after her American counterpart Elaine Garzarelli who, just like her, was one of the few to correctly predict the stock market crash of 1987. At the beginning of June, Koornwinder proved again that she dares to be an outsider: she predicted the current rate drop at the stock markets and put her money where her mouth was. As investment strategist of the KMGN Global Portfolio Fund, she commissioned Stroeve, with which she collaborates as of recently, to make some drastic changes to the composition of the fund portfolio.

      “At Stroeve, they had some difficulty with that,” the self-made stock market guru explains. “Was I not acting too much like a trader? Eventually they agreed, but they did want me to confirm everything in writing.” Koornwinder observed the market a little longer, just to be sure. But on July 8 she did not dare to postpone any longer and ordered the liquidation of the entire portfolio. Just in time, as it would appear. Shortly after her order, the financial markets hit their turning point and the stock market indicators dropped several percent. Currently, the total capital of the fund is safely on deposit: “Only when the indicators come around will we invest in stock again. But for now, that is not the case.”

      It is not strange that the securities experts were somewhat reluctant when Koornwinder commissioned to sell all stock. After all, the fund was established in May. Individual investors invested a total of 12.1 million guilders in the globally investing fund. Soon, Koornwinder will launch an investment fund for institutional investors, not in collaboration with Stroeve, but with a bank whose name she does not want to reveal yet.

      Unloved

      Koornwinder is no stranger in financial circles, but she is relatively unloved. Through self-study she became infected with the investment bug about ten years ago. To her own surprise, she successfully predicted the stock market crash on Wall Street at exactly the right moment. That did not go unnoticed. She gave several lectures, but she did not manage to break through. “They called me a financial seer. Their models were doing fine, were they not? Investors never complained. And if they did, the dollar or the interest rate was to blame. There was always an excuse,” says Koornwinder.

      Confident as she is, she persisted. In 1994, she commissioned accountancy agency Deloitte & Touche to verify the models she had used over a period of five years. She passed with flying colours. According to the accountants, Koornwinder succeeded in outperforming the leading stock market indexes by a long shot. “I do not do fundamental analysis. Annual reports and so on are, of course, important, but are not on top of my priority list,” she explains. She uses other indicators, depending on the stock market environment, in her self-developed method: Koornwinder Global Market Navigation.



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‘Bear market cannot be predicted

1996-09-07, Beursplein 5

The thought alone is enough to make any investor shiver, but a so-called bear market (a strong downturn) cannot be predicted, says strategist David Shulman, of Salamon Brothers, in a recent issue of the American magazine Fortune. The moment one should sell one’s stock cannot be indicated in advance. However, that does not mean that one is powerless as an investor. Fortune provides the investor with a number of tips to make his portfolio more sturdy, or as the magazine itself calls it, ‘bear-proof’.

      For instance, the investor should not be on the stock market when he is required to sell his stock during a major downturn. In addition, he needs to keep enough money in his balance to provide for his monetary needs for at least 12 months. The investor can also, if he expects big expenses during certain years, buy state bonds with an expiry date that coincides with these expenses. Furthermore, he should not just invest in stock. Property, raw materials or other investment alternatives might perform better on uncertain markets. Last but not least, the investor needs to have an eye for alternative products and be willing to adjust his strategy because, as Fortune says, it cannot be predicted when the bear will start to growl.

Herma Koornwinder gave her reaction to the following article a week later (September 14th 1996) in the article ‘Investment business is, just as in nature, subject to seasonal changes’ in Beursplein 5.



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Investment business is, just as in nature, subject to seasonal changes

1996-09-14, Beursplein 5

The following text is Herma Koornwinders’ reaction to last week’s (September 7th 1996) article ‘Bear market cannot be predicted’ in Beursplein 5

It is about time that investment firms started researching what the causes of a bear market are. This is what Herma Koornwinder, since the beginning of April investment consultant of the KGMN Global Portfolio Fund of securities firm Stroeve, argues in response to the statement that such a temporary relapse of rates is impossible to predict. Beursplein 5 quoted this statement from a recent issue of Fortune magazine.

      According to Koornwinder, predictions do not come true because the wrong models are used. As an example, she gives the crash of October 1987. None of the thousand shares she studied went up during that period despite theories about cash flows and the quality of management. ‘Because people are failing to predict relapses, they start dispersing their investments. Dispersion without knowing what risks one wants to avoid is, however, futile,’ Koornwinder states.

      She likens the situation to that of a family man who takes his children to a tour operator to book a holiday in the sun. The employee advises him to disperse and to send his wife to Tunisia, his son to Greece, his daughter to the United States and to stay in the Netherlands himself. ‘This tour operator would be out of business in no time, while nobody questions this way of dispersion in the financial world,’ says the researcher. She goes even further. ‘When one comes upon a beautiful day in September, one does not book a fortnight at a seaside resort. But a sunny day at the beginning of May is more likely to signal a series of sun-filled days. Just as the chance of a sunny day is next to nothing during certain seasons in nature, there are periods in the investment world that are better avoided for the sake of one’s night’s rest and one’s profit.’



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'I am generating a significantly higher percentage of profit than the market'
The mission of controversial outsider Herma Koornwinder

1996-10, Elan

By Mirjam van Immerzeel

The ‘real’ investors are still not taking her seriously. In turn Herma ‘Garzarellli’ Koornwinder accuses investors of being blinkered. ‘Gentlemen, there are factors that markets respond to other than those in your analysis.’ Alice in Investment Land.

      Although Herma Koornwinder is not a newcomer – she has been involved in investment research for more than ten years – she always remained an odd outsider in the financial world up until now. However, due to correct stock market predictions and an impressive performance, her company, Koornwinder Global Market Navigation, has started to gain some recognition. When Koornwinder liquidated the entire portfolio of her Global Portfolio Fund just before the strong market decrease in July, newspapers published articles about ‘Herma Garzarelli’ (after the American stock market guru who predicted the stock market crash of 1987). Koornwinder laughs up her sleeve. The self-educated analyst is determined to continue her work while casually proving commonly accepted investment fact or complete theories wrong in the process. Whether or not fund manager Koornwinder is a stayer, remains to be seen. After all, in the investment world it is said that a fund manager is only as good as his most recent performance.

      When Koornwinder started to explore the financial world as an interested amateur, she immediately ran into contradictions. Koornwinder drew her own conclusions: the reality might be different to what was widely assumed. She subjected the commonly accepted stock market truths to a sound investigation. ‘I read for instance: if the dollar goes up, the stock market will go up as well. That is nonsense, but people still believe it. If someone states something and it seems useful, that statement is copied by others.’ The aspiring analyst performed research into the effectiveness of fundamental analysis, annual report analysis and technical analysis and reviewed which theories worked and which did not. “In the course of the years, I have composed a list … 

HK: The next page is missing



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The dissident vision of Herma Koornwinder

1996-10-11, Intermediair

By Jan Smit

The Netherlands is a welfare paradise and it can stay that way if the large pension funds such as ABP and PGGM change their strategies in time. With more stock, they can generate a much higher return, says Herma Koornwinder, self-made stock market guru of the Lowlands.

      During the first six months of this year, it was not very hard to successfully invest in stock. Almost all stock markets went up. Everything was at a crescendo until the start of July. But not according to Herma Koornwinder, strategist of KGMN Global Portfolio, an investment fund for individual investors. While surfing the internet, she noticed the first dark clouds on the financial horizon.

      And the climate change continued. Koornwinder predicted a storm, so she called Stroeve, the Amsterdam securities firm with which she launched KGMN Global Portfolio in May, and commissioned them to liquidate the entire portfolio of 12.1 million guilders. A bull’s-eye, as it turned out. The stock rates collapsed in the weeks following her decision. In Amsterdam and on Wall Street rates evaporated respectively 8 and 5 percent. Currently she is back in stock for about 80 to 90 percent, in particular in technology funds such as Oracle and IBM, but also in Unilever.

      The newspapers are singing her praises, but she was less surprised. She was already convinced of her own abilities, being one of the few to correctly predict the stock market crash of October 1987, a trick she has repeated numerous times since.

      The trade press and errant investors were at her door. Upon request she gave some lectures. However, she did run into some scepticism. Koornwinder: “My vision was fine and dandy, but nothing more than that. I thought they were probably right because who was I to teach graduate economists a lesson?”

      There was only one thing she could do. She commissioned the renowned accountancy agency Deloitte & Touche to verify her method over the past five years. The result speaks for itself. According to the accountants, Koornwinder succeeded in out-performing the leading stock market indicators by a long shot time after time, both in bull and bear markets.

      That is remarkable, since in past years more and more investment experts have become convinced that, regardless of their strategies, it was impossible to beat the market indexes in the long term.

      Missed opportunity

      Even pension funds such as ABP and PGGM are using that philosophy. These large investors invest more and more in stock only to stick with it for years. A missed opportunity, according to Koornwinder. He who makes timely changes is able to generate a much larger return. And, according to Koornwinder, a higher return is necessary to be able to bear the social costs of ageing.

      Although not everyone shares her vision, Koornwinder’s star is rising. To help investors, she founded the KGMN Global Portfolio. She uses this fund to manage investment portfolios for individual investors worth at least one hundred grand. She is currently preparing a fund in which institutional investors such as pension funds and insurers can participate.

      Business is going well. However, Koornwinder emphasises, personal gain is not her main goal. Society should benefit from her talents as well. She has always been interested in the financial world, but was surprised that investment experts never managed to out-perform the stock market indexes. To gain some insight in this, she went back to school. Objective: obtaining her modular certificate in economics on a pre-university education level, in order to study economy at the higher level.

      It never got to that, however, and as far as she is concerned, it is no longer necessary. Thanks to self-study she has found a remedy which can help pension funds soothe the pain of the ageing population: her Global Market Navigator.

      Some pension funds are already at her door for advice. But the real giants, such as the ABP and PGGM still are not, despite Koornwinder’s attempts to be heard. After a symposium in 1989 she had a long discussion with professor J. Goslings, at the time president of the ABP. “He thought my vision was interesting. He said: ‘If there is anything worth mentioning, please do so.”’ A month later I sent them a fax. It was a Friday. The Amsterdam EOE index was at 315 points. I wrote that the stock market indicator would drop to 285 in the short-term. And what happened the next Monday? The index dropped to 275 and concluded at 285. I thought: ‘What a great entrance.’ Well, forget it, they were not interested.”

      However, she does have an explanation for that reluctant attitude: “My visions are very different from popular belief. Thus: it is often Herma Koornwinder against the rest of the financial world.” The Koornwinder Global Market Navigator does not only take into account the financial-economic laws, but also those of natural sciences, philosophy and mass psychology.  Koornwinder does not want to say (any more) which indicators she values in particular. “I have publicly stated my vision for ten years, but in consultation with Stroeve, I have decided to no longer disclose it.”

      Certain is that she ignores the official prognoses of planning agencies: “Their interest and growth expectations are often wrong, which leads to faulty information to investors.” Neither does she focus on figures about the American economy, such as the increase in employment and the leading indicators. The financial world is currently attaching a remarkable amount of value to these economic factors. Too much, as far as Koornwinder is concerned. “Until eight years ago, everybody was eagerly awaiting the American trade balance figures. Now the unemployment figures are suddenly magical, they keep inventing new things. And when the theory does not become reality, they will find some other excuse.”


19961011 

      Inspired by Plato

      Although Koornwinder carefully protects her secret, she was willing to name a couple of trends that will influence the stock rates in the long term: the ageing of the population and high-tech unemployment. She warned about the consequences of ageing about six years ago, without any result. But today, one cannot open a newspaper without reading about it.

      The digital era and the high-tech unemployment resulting therefrom are subjects with which she is preoccupied. The impact of advanced automation, in combination with the rise of artificial intelligence, will be much more dramatic than that of old age, according to Koornwinder, which does not just mean great social consequences, but also consequences for her investment strategy. At the beginning of this year, she entered into automation funds such as Baan and Getronics on a large scale and with success. Both stocks had excellent performances in the first half of 1996.

      To find out why some institutional investors react so slowly, she has studied technology, history and philosophy. Koornwinder was inspired by Plato. In the allegory of the cave, the Greek philosopher tells the story of people who, tied down since birth, were living happily in an underground cave. Should one of these cavemen be taken outside, he would realise, according to Plato, that there was a different world out there. Back in the cave, people would not want to believe him because he was challenging their view of the world. Koornwinder recognises herself in this allegory. “It is not that people refuse to accept my ideas, it is just that they are happy with what they have got. But we are on the threshold of the 21st century; let us use the tools of the time.”



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Quivering on the stock market

1996-11-02, Elsevier

By Hans Crooijmans en Sheila Sitalsing

Investing

The stock market is very positive at the moment. The exultant mood is attracting individual investors, stocks are hot. But the nagging question is whether or not it is already too late to buy. And how long will this party last? (This page).

      Nobody can predict this, because there is no ultimate investment formula (page 93). However, he who knows more than someone else is able to realise huge profits. Insider trading is illegal, but what is the definition of insider trading? (Page 99). Two public prosecutors provide a definition (page 103).

 

19961102

 

 

 

The question that is tormenting investors is not if, but when there will be a turning point.

The Mad Dow Disease is rapidly spreading in the United States. The Dow Jones average, indicator for the prices of American stock, seems out of control. In November 1995, the index surpassed the 5000 points for the first time, a fivefold increase of the rate level in exactly fifteen years. And he who thought that it could not get any better was very wrong. Over two weeks ago, the Dow closed above the 6000 points. And those who call themselves experts say that the attack on the next magical limit is imminent.

      Stocks are hot, stocks are a hype. One of three American households has them either directly or indirectly (through an investment fund). Those who were not too bad at selecting funds and companies, managed to double their invested capital on the stock market in less than five years. Rate explosions turned former wage slaves into millionaires, which is what the average American loves. In the first eight months of this year, 163 billion dollars of individual savings went into investment funds. Own your share of America, the ambiguous slogan designed to attract the public to stocks in 1929, seems regenerated.

       But even though the American investors are happy with the current bonanza, their average return pales in comparison to the profits investors achieved on the about twenty times smaller Amsterdam Stock Market. The Netherlands has been a true stock paradise for almost two years. In the past 20 years there was not a single stock market in the developed world that showed the rate increase that the Damrak portrayed. At the end of 1994, the AEX index, the indicator of the Amsterdam Stock Market, was below the 400 points, and we are about to hit the 600-point mark.

      The jubilation has been infecting the well-to-do citizen. Because he who has a 100 grand of savings in an old-fashioned savings account (against a miserable four  percent interest per year) or has invested in dull bonds, has a lot to explain to the friend or colleague who is hitting it big on the stock market. With every point the AEX index increases, that one question is burning: should I enter the stock market as well, or am I too late?

      For the investor who saw the rate of his stock go up continuously in the past couple of months, an equally important question arises: is it not time to turn the profit on paper into real cash? Or, as Jaap van Duijn, chairman of the policy commission of Robeco, recently put it in the Algemeen Dagblad: “As annoying as the nervousness associated with missing out on all those rate increases may be, having stock in a growing market is no walk in the park either.” Individual investors currently account for 25 to 30 percent of the total stock market turnover.

      The higher the stock prices, the more people are afraid that the sad history of 1929 or that of October 1987 will repeat itself. Both stock market crashes have sufficiently proven that if the panic hits, rates can drop 40 percent in no time. What goes up, must come down is one of the clichés that investment analysts regularly express. But this much is certain: any plunge on Wall Street – because that is the financial Mecca that will most certainly start it all again – will result in a similar plunge of stock rates on the Amsterdam stock exchange.

 

      The tormenting uncertainty that is keeping doubting investors and aspiring investors awake is: how long will the rates keep increasing? Elsevier asked the opinion of a number of experts (see columns) that work with these thousand-dollar questions every day. “What should I do with a 100 grand?” and “When can we expect the turning point of the stock market?”

      Advertising campaigns

      It is remarkable that all financial specialists still prefer stock. The opinions about a turning point of the sentiment and rates, vary from “this year” through “at the introduction of the Euro in 1999” to “there will be no turning point”. In general, analysts and capital managers are not expecting a major crash hazard for the next six months/year. In other words, we are in an upward elevator, and if we all move a little closer together, there is still room for that tardy individual investor.

      Judging from the deluge of advertising campaigns and new investment products, it truly seems that the rates will be a crescendo. The marketing machines of insurers, banks and other providers of investment funds run at full capacity, gratefully using the attractive returns generated in the past couple of months. Last month, Robeco gained 500 million guilders in just eight days, with its new “AEX click fund”, an investment vehicle that attaches obtained rate profit to predefined levels, so that the investor is covered when the rates drop. And on behalf of insurer FBTO, Monique van de Ven (famous Dutch actress) is stating on radio and television: “Seventeen point three percent on average over the past four years.” Would we not all like that?

      For those who want to enter the stock market just now, the lights are still green. The economic circumstances are extremely favourable. Interest is low; inflation is zero and even pronounced dead by renowned economists. The pace of the economic growth is healthy and company profits are solidly growing. The current merger and acquisition wave is encouraging the buyer response as well. Stories about synergy and scale benefits are gratefully accepted by investors.

      But, more important: there is a continuous flow of billions of savings, pension and insurance capital, which is looking for the investment with the best return. The fact that stock generate more profit in the long-term than bonds, real estate, noble metals, stamps or other paraphernalia, explains the current run on the stock market.

      Warning signals

      Here and there, you can hear warning signals. But you already heard them a year ago, and again last summer when a sudden drop in rates on Wall Street took about four percent of the global stock prices. Those who predicted that this minor dip would be followed by a “real downward correction” shortly have been laughed away. The stock market history they based it on would not be repeated.

      The continuously rising rates are invalidating cast-iron formulas and old investment truths. On the American stock markets, companies are worth about four times the balance sheet value. In the Netherlands, this generally remains within proportions. If you manage to get paid twice the intrinsic value, you have managed quite an accomplishment, but compared to several years ago, this ratio has rapidly increased.

      Where, in the past, a price-earnings ratio of eight was considered to be normal for a (partly) cyclical fund such as Akzo Nobel, now twelve times the profit per stock is paid. And whereas the profit per stock of Ahold has increased a mere 30 percent in the past two years, the stock on the stock market increased almost 120 percent in value. Despite that major increase, many stock houses keep Ahold on the buy list. Just like a buy advice applied to the “recognised grower” Heineken, until the company warned that the expected profit pace would not be met and the rate dropped almost 20 percent.

      Remaining calm

      “The majority of analysts use instruments they no longer fully support,” says John Ebbing, of MoneyView On-Line, the electronic stock market editorial office of research agency MoneyView Nederland. “We are currently in the phase where everyone is entering the market because rates are increasing, and rates are increasing because everyone is entering the market. Sooner or later, this speculative ride will.”

      Will it though? Lex van der Sommen of ING Bank believes in a different truth. His main argument: there is simply an incredible supply of investment capital. Dutch institutes are investing more of their capital in stock. They are currently at 25 percent, but in the long-term, they want to achieve 40 percent. Van der Sommen: “This means that there is an additional demand for (Dutch and international) stock on the market worth 200 billion guilders.”

      The same situation occurs abroad. “A lot needs to happen in the countries around us – except for England - to guarantee pension benefits. That trend will ensure a more or less permanent surplus in demand of investment options. With the exception of a correction now and then, the stock market rates will continue to go up.”

      So what prevents the individual investor from joining the ride of the pension funds and insurers? Nothing, the optimists say, as long as they keep their cool. Keeping cool is required, because with the upward movement of the Dow Jones and the AEX, the stock market barometers tend to move more drastically. Typical were the tense responses earlier this year during the monthly announcement of the American unemployment figures. The rate losses that occurred after the announcement of the favourable – because less unemployment – figures, were recovered in no time.

      The apparent importance of the unemployment figures, but for instance also those of retail turnovers, housing figures or wage statistics, can be traced back to the assumed relationship that those parameters have with the interest level in the United States. The development of the interest is the ideal factor, according to financial experts, to make or break the mood on Wall Street (and with that on all important stock markets in the world).

      A higher return leads to higher capital costs for companies which leads to a delay of growth, is the straightforward explanation. At the same time, a higher interest makes forms of investment such as savings deposits and obligations more attractive as compared to stock. Reason enough to pray that chairman Alan Greenspan of the Federal Reserve Board does not get the idea to increase the interest.

      Another figure to keep track of: the American economic growth percentage. If that drops below about 2.3 percent on an annual basis, it might be a sign that there is no more room for growth and that the stock rates will drop. A growth of over three percent might have the same effect on the stock market. The Federal Reserve might counter “overheating” of the economy with an increase of interest.

      Crash

      Will or won’t there be a crash? There will not, is what some observers are saying, if only because a number of investors are thinking: what happened in 1987 will not happen to us again. After all, the rate drops of over 22 percent on Black Monday were quickly followed by a strong recovery, mainly thanks to a quick intervention of the Fed. However, pessimists would rather stick to the familiar crash scenario. After the very last hesitating individual investor has entered the market and the rates have reached their climax, the card house will collapse again.

      The nerves of investors are being tested because in addition to statements of stock market gurus, markets can get upset by, for instance, war threats in the Middle East or crisis in Russia. Investors with a fear of heights need to stay focused on the developments of corporate results, even when it concerns funds that are not in their own stock portfolio. If one of the big American airlines is performing poorly (for instance because of rapidly rising fuel costs), chances are that other airline and transport companies will face the same setbacks.

      The other way around: better than expected figures of Intel or IBM can cause an international boom in the entire field of technology funds. The individual investor, who does not have sufficient time for his morning newspaper, is recommendable to open the rate lists of Wall Street on page 585 of Teletext after 10 PM.

      Whether or not such a habit will limit the damage on the dreaded day of a stock market crash is doubtful. After all, the individual investors with their 100 grand invested in stock were too late with their sell orders during previous events. It is better to talk to the bank or stock house in advance about what to do in such a situation. A stop loss order (sell everything as soon as the rate goes below a certain level) may be a solution.

      Taking a few tablets of Excedrin might be a good idea as well.

 

Columns

 

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Corné Zandbergen (36)

For two years head of the Institutional Research Department at the Generale Bank

How to invest a 100 grand?
Stock:           50%
Bonds:          30%
Liquidities:   20%

Hot tips!
Do:              Aegon, Vendex International, VNU
Don’t:          ACF, BolsWessanen, EVC

When will the bear start to growl?

“The turning point will come this year when the American FED increases its interest. Europe will most likely follow suit. We believe that the capital market interest will gradually rise to 6.75 percent. We predict a decrease of the AEX to about 560 in the next couple of months. In about 12 months we aim at an AEX of 600 points.”

 

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Peter Wortel (36)

Since the beginning of this year head of Research at Delta Lloyd Bank

How to invest a 100 grand?
Stock:           80%
Liquidities:   20%

Hot tips!
Do:              Ahold, Hagemeyer, Cap Gemini
Don’t:          Tulip, EVC, BolsWessanen

When will the bear start to growl?

“For the time being, we are not expecting a turning point. We do, however, expect a temporary drop in both the Dow Jones and the AEX, but we think the upward line will continue afterwards. In six months, the AEX is probably at 630 points. The Dow Jones at 6300 points.”

 

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Lex van der Sommen (53)

Head of individual capital management ING

How to invest a 100 grand?
Stock:           45%
Bonds:          50%
Liquidities:   5%

Hot tips!
Do:              IHC, Caland, Sligro, Randstad, Hagemeyer, financial values.
Don’t:          cyclic funds

When will the bear start to growl?

“Not anytime soon, provided that the interest remains more or less at the current level . I believe that the AEX will be at about 620 in six months. For the Dow Jones, a level of 6500 seems realistic in six months. The inflow of institutional capital on the market is swelling.”


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Roel Gooskens (37)

President of research of HSBC Van Meer James Capel

How to invest a 100 grand?
Stock:           100%
Assuming an investment horizon of at least three years.

Hot tips!
Do:              KPN, Heineken, Nutricia. Extra tip: Roto Smeets de Boer
Don’t:          BolsWessanen, KLM, Hoogovens

When will the bear start to growl?

“We are expecting the turning point will come at the introduction of the euro in January 1999. For now, the stock markets will continue to grow; the AEX to 650 points in six months and the Dow Jones to 6500 in six months.

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Herma Koornwinder

Since January 1990, president of Koornwinder Global Market Navigation in Heeze.

How to invest a 100 grand?
Stock:           100%

Hot tips!
Do:              Koninklijke Olie, Baan, Getronics
Don’t:          Sphinx, Gustavsberg, Weweler, Rood Testhouse

When will the bear start to growl?

“I am currently positive towards the stock market. My indicators, based on the scan and navigation system I developed myself, indicate that there may be a turning point within one or two months. That is why I cannot say at which level the AEX or Dow Jones will be in six months. But for now, I am not expecting any bear.”

 



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Herma Koornwinder: Old stock-market wisdom is obsolete

1996-12, GPD dagbladen

By Raymond Peil

Investors have little to benefit from old profundities that are still popular in the financial world. “The investment world has changed fundamentally since 1987. Ninety percent of the big money is speculative,” says investment consultant Herma Koornwinder. In addition, she predicts that the emerging high-tech era will only cause bigger changes.

      Dutch Herma Koornwinder is entitled to speak, thanks to her service record. Her model, the Koornwinder Global Market Navigation (KGMN) has provided better investment results on a regular basis since 1989, than the applicable averages. Koornwinder’s vision, that investing has irreversibly entered a new era, was laughed away in investment circles when she first announced it. However, recently, Rabo-CEO Wijffels seems inclined to share her vision. And even Robeco has started a trial with investment models that deviate from popular ideals, after years of struggling.

      The Dutch investment consultant considers that to be a minor breakthrough: “My models oppose theories that have won the Nobel Prize for economics in the past.” However, in the last couple of years, Herma Koornwinder has gained more recognition: her nicknames vary from “techno-pioneer” to “a tough lady” or the “Dutch Garzarelli” after the, currently disgraced, Wall Street guru who correctly predicted the stock market crash of ’87.

      Koornwinder is gaining recognition in the economic establishment as well: securities firm Stroeve manages about 16 million guilders, according to the KGMN model, “which revolves around the financial world like some sort of super-telescope and scans it for (im)possibilities”. In the upcoming year, the investment fund will be open to the public.

Not easy

     Despite the formula for success, the past stock market year, with its strong increases and unexpected drops, was not the easiest of years. The first five months went excellently for Herma Koornwinder. On July 10th she liquidated a portfolio, against every advice, which turned out to be a correct decision “Otherwise I would have lost nine percent of worth in no-time”.

      Especially the vehement movements that started in August were difficult to fathom. Her Stroeve Adviesportefeuille (Advice Portfolio) has scored 8.1 percent in the past couple of months, 0.5 percent less than the global stock market barometer MSCI Index.

      An important role in the aggressive rate fluctuations is played, according to Herma Koornwinder, by billions that flash back and forth across the Earth at lightning speed, looking for the best returns. The capital flows are growing rapidly: it’s cheap to borrow money, pension funds have huge reserves. Plus, options and other stock-related contracts (derivatives) turn the bumps into a true rollercoaster. The computerisation and digitisation are not exclusively accessible to the investment world, she adds, to paint a picture of the reality we live in. “Information technology cannot be stopped. The same way the car made the tilt-cart obsolete or the train or the stagecoach. Society is making a giant leap forward.”

      The consultant has spent many years perfecting her model, because she noticed during her study that the theories that are used very often offer insufficient grip in practice. This varies from: if a company performs well the stock rate is good (not true), the interest rate drops, and the stock market goes up (often true), if the dollar goes up, the stock market follows sometimes true).

      She has her own KGMN scenario for over 1,000 companies, worldwide, like an X-ray of the actual underlying economic tides. Koornwinder: “There are hundreds of factors that impact the rates. It is like a puzzle: at a certain point all the pieces fall into place, which tells me to enter or exit the market and go in or out of a stock.”



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How well is Herma Koornwinder performing?

1996-12, Cash

By AM

If all goes well, Herma Koornwinder, who is very well known in investment circles, will launch her KGMN Global Fund next spring. Approval will be requested from ‘de Nederlandsche Bank’ for the official listing of the new investment fund. In addition, Koornwinder has created the non-officially listed KGMN Global Portfolio in collaboration with the Amsterdam securities firm Stroeve. For this private fund, she manages more than ƒ10 million.

      The Volkskrant wrote last summer that Koornwinder liquidated a large part of the portfolio of ƒ12.1 million just before the temporary dip of the AEX index in July. Intermediair and Elan also mentioned this achievement in several publications. But what has been the exact investment policy and performance of the KGMN fund up till now?

      Herma Koornwinder is not easily pigeon-holed; she is no value investor, neither a growth nor momentum investor. She uses technical analysis and fundamental data, but the exact things she takes into account remain a secret. “After all, I would give away my advantage with regard to the other investors if I did,” Koornwinder explains. According to her, the financial world market can be compared to a giant neurological network of connections between market shares that cannot function independently. For future rate forming, she indicates two determining factors: the ageing of the population in the West, and unemployment caused by high-tech innovation.

      It is a little harder to obtain information about her performance. After much detective work, it became clear why: since its creation (May 1st) until November 19th, the fund has had a performance of just 3 percent. With that, the self-made guru is about 6.7 percent behind on the AEX.

      Hopefully, Koornwinder’s neurological network does not have family ties to the mysterious black box of Ton Jongbloed - of the failed Groeigarant fund - and the Moneytron model of Jean-Pierre van Rossem, the Belgian ex stock market guru and libertine politician.



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Computers have quickly caught up with time-honoured investment profundities

1996-12-27, Leeuwarder Courant

By Raymond Peil

AMSTERDAM – Investors have little to benefit from old profundities that are still popular in the financial world. “The investment world has changed fundamentally since 1987. Ninety percent of the big money is speculative,” says investment consultant Herma Koornwinder. In addition, she predicts that the emerging high-tech era will only cause bigger changes.

      Dutch Herma Koornwinder is entitled to speak, thanks to her service record. Her model, the Koornwinder Global Market Navigation (KGMN), has provided better investment results on a regular basis since 1989 than the applicable averages. She correctly predicted the stock market crash of 1987 as well as the mini-crash of 1989 and one of the sudden relapses this year. From 1989 to 1994, she correctly predicted 22 out of 23 turning points in stock markets.

      Koornwinder’s vision, that investing has irreversibly entered a new era, was laughed away in investment circles when she first announced it. However, recently, Rabo-CEO Wijffels seems inclined to share her vision. And even Robeco has started a trial with investment models that deviate from popular ideals, after years of struggling. The Dutch investment consultant considers that to be a minor breakthrough: “My models oppose theories that have won the Nobel Prize for economics in the past.” However, in the last couple of years, Herma Koornwinder has gained more recognition: her nicknames vary from “techno-pioneer” to “a tough lady” or the “Dutch Garzarelli” after the, currently disgraced, Wall Street guru who correctly predicted the stock market crash of ’87.

      Koornwinder is gaining recognition in the economic establishment as well: securities firm Stroeve manages about 16 million guilders, according to the KGMN model, “which revolves around the financial world like some sort of super-telescope and scans it for (im)possibilities”. In the upcoming year, the investment fund will be open to the public. Despite the formula for success, the past stock market year, with its strong increases and unexpected drops, was not the easiest of years. The first five months went excellently for Herma Koornwinder. On July 10th she liquidated a portfolio against every advice, which turned out to be a correct decision “Otherwise I would have lost nine percent of worth in no-time”.

      Especially the vehement movements that started in August were difficult to fathom. Her Stroeve Adviesportefeuille (Advice Portfolio) has scored 8.1 percent in the past couple of months, 0.5 percent less than the global stock market barometer MSCI Index. That may not seem revolutionary, but an average two-thirds of available investment funds in the Netherlands was behind on the applicable indicators in the past couple of years.

      Herma Koornwinder believes that the billions of money that flash back and forth across the earth at lightning speed, looking for the best returns, play an important role in the vehement rate fluctuations. Capital flows are rapidly growing: it is cheap to borrow money and pension funds have huge reserves. Koornwinder thinks that, as computers and new complex sciences become more and more important, our society will become one in which one mouse click can have serious consequences.  Monotonous manual work and routine thinking will be placed under one button on the keyboard of the computer.

      This means that high-tech will not just make people unemployed, but many people will not even be able to complete education for the new high-tech jobs. According to Koornwinder, way too little attention is paid to this development. “Why is there no minister of information technology? For the average citizen, things will become way too complex.”

      Together with rapid ageing of the population, high-tech unemployment is casting its shadows forward, she believes, and it will result in large costs for society. According to Koornwinder, investment experts can contribute to a solution. “We should not simply collect it from the citizen. There are huge savings of pension premiums amounting to almostƒ800 billion. If, with a better control of the risk, one additional percent of return on investment is realised, the pension premiums can be lowered 15%.”

      That is where Koornwinder Global Market Navigation comes in. The consultant has spent many years perfecting her model, because she noticed during her study that theories that are often used offer insufficient grip in practice. This varies from: if a company performs well its stock rate is good (not true), as the interest drops the stock market goes up (often true) and as the dollar goes up the stock market follows (sometimes true).

      She has her own KGMN scenario for over 1,000 companies, worldwide, like an X-ray of the actual underlying economic tides. Koornwinder: “There are hundreds of factors that impact the rates. It is like a puzzle: at a certain point all the pieces fall into place, which tells me to enter or exit the market and go in or out of a stock.”



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Professionals await their buying moment

1997-02-19, De Gelderlander

AMSTERDAM

“Exaggeration can be kept up for a long time,” says G. Russelman, responsible for a stock portfolio of 32 billion guilders at the pension fund PGGM. He means that the incredibly rapid growth of the stock rates in Amsterdam will not necessarily result in a major crash. And should a significant correction take place after all, that will signal a buying moment for Russelman.

      Last January, the Amsterdam stock market index AEX, the average of a handful of leading stock market funds, broke through the 500point limit. It took no more than 11 months to take the next hurdle, despite a major slip in the summer. After that, it took the stock market ... (words missing here). The latter took place on February 12th. A week later, the rates are just above 735 points. At this pace the AEX will break through the thousand-point limit in March.

      “This is going a little too fast and might make a technical correction necessary, which will cause the bubble to burst,” is what Het Financieele Dagblad (Dutch financial journal) wrote at the end of December, based on the statements of a worried trader. Back then, the AEX was at almost 640 points, about a hundred points lower than yesterday. Today, the traders speak of pandemonium again, but they naturally keep writing down buy orders, issued mainly by individual investors. Institutional investors, such as Russelman of PGGM, are at the sideline awaiting their buying moment.

      On the morning of October 19th 1987, Herma Koornwinder took her daughter for a day out. In the prior weeks, she had been warning everyone about an imminent stock market crash. “Après nous, le déluge,” she said to her daughter as she closed the door. “After us, the deluge.” When they got home, the joint value of companies listed at the Amsterdam stock market had dropped several billions of guilders.

      Today Koornwinder, by now something of a name in the financial world, is describing her mood as bullish. “I hope to be able to exit in time,” she adds, while emphasising that people should not consider her opinion to be a buy advice: “Because I will not be able to warn them should my indicators deteriorate all of a sudden.”

      In June last year, she had an entirely different opinion: she felt her extensive collection of indicators on which she bases her investment strategy was becoming too erratic. However, in the fall she returned to the stock market, and has not left since. About 70 investors, clients of the securities firm Stroeve, with a joint capital of about 18 million guilders, are following in her tracks.

      Koornwinder is mostly worried about the long term. The efficiency transition companies are going through, which is the motor behind profit growth and the basis of the rate increases, has a hazardous side from a social perspective, in the form of high-tech unemployment. The information revolution also creates new jobs, but people are not yet ready for that, she believes.

      Such major unemployment, as in Germany, signals to professionals, such as Russelman of PGGM, that stock investments will continue to do well in the near future. No government will even consider increasing the interest under such circumstances. The general opinion among stock market experts is therefore that the capital market interest will remain low and may even decrease a little, which means that saving generates little return and will stimulate people to invest in stock.

      The austerity urge of the governments in just about every industrial country is therefore driving hundreds of billions of guilders, dollars and other currencies to the stock markets.

      After all, there are fewer state bonds available and they generate little interest. The huge demand for the alternative – meaning stock – contributes to the high stock market rates. In addition, (at least in the Netherlands) interest income is subject to tax, whereas rate profit is not. The low interest and the almost non-existent inflationary tendency are a significant difference compared to October 1987. Back then, the inflationary tendency and interest were much higher and the high valuation of stock was truly exaggerated, Russelman believes.

      Ten years ago, the skirmishes in the Persian Gulf invoked an avalanche of sell orders. Russelman would not know what could spoil the mood at this moment, unless it is the imminent discussion about the euro. Increasing doubt about the European currency union may rush investors in the direction of the dollar, which is already somewhat reflected by the significant rate increase of the American currency during the last couple of months.

      A capital rush to America could invoke interest increases in Germany and other European countries, which could result in a nice buying moment for Russelman and his fund manager colleagues.



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Investment signals

1997-03, Perspekt (ABN AMRO)

Guru

The Dutch stock market guru Herma Koornwinder is expressing her opinions more and more, especially since she had her predictions over the past five years verified by accountancy agency Deloitte & Touche, which concluded that she succeeded in outperforming the leading stock market indicators time after time, whether in a bull or bear market. Without any formal investment background, Koornwinder developed her own instrument, the Global Market Navigator, which tracks down trends and predicts them.

     The Navigator does not only take into account financial and economic factors, but also those of natural sciences, philosophy and mass psychology. She does not reveal her secrets, Koornwinder recently stated in Intermediair, but she does want to disclose that she disregards the official prognoses of planning agencies. “Because their interest and growth expectations are way too often wrong.” Also, people set too great a store by the American indicators according to Koornwinder. “Several years ago, everything revolved around the American trade balance. Now, it is suddenly all about the unemployment figures. Thus people invent something new time and again.”



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A fund according to the Koornwinder system

1997-04-26, fem

By HCK

In America she would have been famous by now, in the Netherlands that takes much longer. But even here she is finally breaking through despite the disbelief of fancy Amsterdam analysts. Because some self-educated woman from Heeze, a stay-at-home mom, who acts as a stock market guru, cannot be good, can it? Discovered by television, her lectures attract large audiences and institutional investors approach her to manage hundreds of millions.

      Herma Koornwinder cannot disclose the name of the bank she is negotiating with, but it is only a matter of time before contracts will be signed. After having consulted institutional investors for five years, she had a test run at securities firm Stroeve. “Last May, I started a so-called portfolio (which they call a managed account at Stroeve), in which I managed about 20 million guilders.” With evident pride, she adds: “The return is currently at 18.9 percent.” Stroeve will advise the participants to switch to the new fund, which will enable Herma Koornwinder to spread her wings. “Large investors – I cannot name any names – participated in the portfolio for a hundred grand. They want to participate with much larger amounts. How large? Five to ten million.”

 

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      She has been perfecting her system– Koornwinder Global Market Navigation (KGMN) – for the past fifteen years. Her system integrates financial and economic factors and fundamental and technical analysis with insights from natural sciences, philosophy and mass psychology. She defies the general scepticism about models that promise the investor a higher return than the index, despite bad experiences, as with the ‘Groeigarant’ fund of Ton Jongbloed, former head of Staalbankiers, and the Moneytron model of the Belgian ex-stock market guru and libertine politician Jean-Pierre van Rossem.

      According to Koornwinder, prognoses fail because people are using faulty models. For an independent judgement of her system, she had accountancy agency Deloitte & Touche verify five years of her predictions. Conclusion: Koornwinder continuously outperforms the leading stock market indicators. She predicted the crashes of ’87 and ’89, as well as the drops in ’94, ’96 and ’97. “Indeed, in March, I issued a sell advice at the top of the market. Now I am biding my time. I am carefully studying the indicators to see if I can re-enter the market.”



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Securities firm Stroeve cancels Koornwinder programme

1997-05, Financiële Telegraaf

By Peter van der Tuin

AMSTERDAM, Friday

Followers of technical analyst Herma Koornwinder, who is very well known in investment circles, have had to deal with a disappointment in the past couple of days. At the Amsterdam securities firm Stroeve a series of individual accounts was managed according to her directions, for about a year. But that has ended. Mrs Koornwinder has indicated that she has to quit for health reasons.

      “It is very unfortunate, as Mrs Koornwinder had an excellent reputation as a technical analyst with a group of people. But now that she has to quit for health reasons, there is nothing we can do.” says President Hans Stroeve of the Amsterdam securities firm.

      According to him, individuals deposited a total of about ƒ20 million on their Stroeve account. On May 1st last year the program - in which Stroeve managed the accounts in line with the signals that Herma Koornwinder passed on based on her technical analysis - started. “The KGMN Global Portfolio was not an investment fund, but sort of a pool. We translated these signals successfully into an investment policy” says Hans Stroeve. “Since the start of the program a return of about 18% has been achieved, which is a reasonable result for a portfolio that was very conservative and defensive in design. Do not forget that Mrs Koornwinder invested globally which made it hard to beat the Amsterdam stock market, which belonged to the best markets in the world last year.”

      Stroeve has sent the participants a letter to inform them of the disappointing news that the KGMN program has ended as of May 1st. “Naturally we offer the participants several alternatives”, says Stroeve. “Including some other options making use of our specialised capital managers. But Mrs Koornwinder’s input will be sorely missed. She is a woman of strong opinions, which she willingly expresses. She certainly is no grey mouse, which has led to some criticism here and there."



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For sale, an (almost) infallible system!

1997-06, Elan

Prognoses

Dutch Herma Koornwinder accurately predicted 22 out of 23 turning points on the stock market during the period ’89-’94. She also predicted the drops in 1996 and 1997. It is impossible to attain such a score by coincidence and therefore the investment expert – who has been interested in financial economic news since a very young age - is a force to be reckoned with. Recently she has put her system on display in the shop window.

      Her husband was making good money, which gave her the opportunity to become an independent and unsubsidised researcher in addition to being a mother.

      According to Koornwinder, the financial world has lately been paying too little attention to research, as it believed that sufficient billions of dollars had already been spent on it. Every time, the same conclusion was reached: the markets are unfathomable. Koornwinder has provided conclusive evidence to the contrary. Important questions of her research included: are the investment theories, models and techniques effective enough and sufficiently practice-oriented? Was the price of a stock properly calculated? Supported by her curiosity, she started looking for answers. At first, she was not taken seriously, but that changed quickly when her predictions came true time and again. She warned financial bodies and analysts, for instance, in the week prior to the notorious stock market crash of Monday October 19th 1987 that the stock markets were about to collapse, but nobody listened.

      ‘Après nous le déluge’ (after us the deluge), she said to one of her daughters as they left their home together that morning. When they got home, worldwide stocks were worth hundreds of billions dollars less.


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     Thousands of companies in 22 countries

     She does understand why she had to wait for recognition for years. “Right from the start of the stock market world a century ago, investors have been analysing the market using a certain method,” she says. “When some outsider comes with new ideas and new insights, the establishment will always reject it. I had to prove that my predictions were not coincidental, which I did. But it surprises me that it took this long.” After keeping her technology and insight a secret for years, she recently put her investment system up for sale.

      However, the main question remains what does a buyer get if he buys the successful Koornwinder system. In other words, what is the interconnecting vision according to her?

      “I have come to the conclusion that one should not observe the performance of one separate company, but that the environmental factors should be taken into account. Last year, I read an article in the NRC newspaper about an investment analyst who could hardly grasp the developments of 24 listed companies. I was baffled. I am analysing thousands of companies in 22 countries and in addition focussing on important environmental factors. It took me fifteen years to discover which information is important and how to process it into a world vision.”

      Cyberspace in Heeze

      Even though Koornwinder’s advice is worth a lot of money and even the largest investment bodies could learn a lot from her, she has never bought stock. A conscious decision: “I am convinced that even the financial world needs experts. One either issues advice or one trades. I was afraid I would freeze if I started trading. That is why I have always stuck to analysing and passing on information.”

      Her success has earned her the nickname ‘the investment miracle of Heeze’, but she does not want to have anything to do with such nonsense. “I have investigated the investment craft, which theories do and which do not work, plus, I’m analysing facts.” That might be the big difference between her and the traditional investment analysts. While they were fixated on annual reports of companies, she collected relevant stock market information from cyberspace, using her computer. There was not a continent she missed.

      “At the start of 1990, I sent a fax to a number of financial bodies with the notification that they needed to get rid of their Japanese stock. Shortly after, the entire Japanese stock market collapsed. And again people were doubting me. But I continued despite feeling pretty isolated with my investment system. Isolated and powerless. When in business a product does not work, people complain. In the investment world it is called risk.”

      She cannot say when her system will be sold, but can say that the negotiations with a number of candidates are well advanced. Hopefully no messages of doom will be issued from her hometown of Heeze until negotiations have been finalised. “Just two months ago, I said about the current stock market situation: ‘You ain’t seen nothing yet’. If really dramatic changes occur shortly, hopefully I will be the first to indicate them... again.”

Added in handwriting: “This heading was not my idea!”



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Guru for sale
Herma Koornwinder, the Dutch miracle, wants to sell system: ‘Make an offer’

1997-06-07, Elsevier

By Sheila Sitalsing

What is investment wisdom worth? “Make an offer,” Herma Koornwinder told the three parties to whom she is talking. The Dutch investment miracle is selling. Her “system” is displayed in the window, but its exact content remains a mystery. A mystery Koornwinder carefully protects.

      After years of reading and studying, Koornwinder developed a dynamic, all-embracing investment model with which she claims to be able to predict stock market movements. Based on these predictions, she issues investment advice. Initially, “that stay-at-home mom” met much sarcastic laughter, but after accurately predicting 22 out of 23 turning points in five years, among which were the crashes of 1987 and 1989 (source: accountancy agency Deloitte & Touche), she gained authority.

      Until the end of April it was possible to invest according to the Koornwinder method with securities firm Stroeve. Investors eagerly invested a total of 12 million guilders, which grew to 20 million guilders, although it should be stipulated that in the jubilation year of 1996 investors were willing to invest money in virtually anything the milkman or neighbour recommended as “a great investment”.

      The successful Koornwinder recipe was supposed to pass on from mother to daughter, but when daughter Tanja finally chose medicine, Koornwinder decided to sell her investment knowledge. She is on a mission: “Pension funds can make a lot more from their investments. The ageing of the population will become a drama if pension funds do not start investing in a more modern way.” In addition to knowhow, the dowry contains Koornwinder herself. She will induct analysts into her method and then step back. “Eighty percent of my knowledge is on paper and can therefore be passed on easily. Twenty percent consists of the specific Koornwinder input, which can most definitely be learned.”


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Koornwinder can work anywhere; in Heeze, on the heath, or on the beach.

     She believes that the “conventional” market analysis does not suffice. “Just studying annual reports, visiting analyst meetings and shaking hands with the president is not enough.” She enters insights from mass psychology, raw material prices and data on interest, currency and bond markets into a computer. “That is not unique, I know, but few do it as systematically and thoroughly as I do.”

      The Koornwinder analyst does not visit companies. “No added value. All relevant information is online.” A pc, fax and modem suffice. The analyst can work anywhere; on the heath, on the beach. And, of course, in Heeze.



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True stock market experts?

1997-07-26, Elsevier

Five professional investors tipped their favourite stock last year. The outcome after more than eight months of mad rate increases.

By Sheila Sitalsing

How well does the professional money manager invest? That depends on who you are asking. ‘Now that the stock markets keep rising, every idiot can gain a fortune,’ a capital manager recently complained. Secretly, he is hoping for a rate plunge so that professionals like him can prove their added value, he said.

     What added value? Last year, Elsevier interviewed five professional investors (see Elsevier 11-2-1996). We asked – among others - for hot tips: three Dutch stocks that would excel in the first part of 1997 (dos) and three disastrous funds (don’ts). How reliable did the tips turn out to be, more than eight months later? To calculate this, the rate increase of every tipped stock was calculated, including dividend, between November 1st 1996 and July 9th 1997. Then, the average return was calculated by assuming that the money invested was divided into equal portions. Buy and sell costs were not included. The most important thing is: none of the tips were terrible, but their outcome was enormously different.

     Herma Koornwinder, president of Koornwinder Global Market Navigation (KGMN) was luckiest. On average, her dos were better than those of the others and her don’ts performed much worse, just as it ought to be. She tipped Royal Oil (return 58.86%), Getronics (69.12%) and Baan, which at 143.63 percent upped the overall average to 90.54 percent. She recommended staying away from Sphinx (minus 16.46%), Weweler (still plus 33.12%) and Rood Testhouse (12.50%) which resulted in an average return of 9.72 percent for her don’ts.

      Corné Zandbergen, head of the department of institutional research of the Generale Bank, ties for second place with Peter Wortel, head of research at Delta Lloyd Bank. The dos of both experts increased an average of 59.56 percent. Zandbergen tipped Aegon (67.70%), Vendex (63.72%) and VNU (47.28%). Wortel recommended Ahold (74.05%), Hagemeyer (60.42%) and Cap Gemini (44.22%). Both Wortel and Zandbergen recommended investors stay away from EVC (7.05%) and BolsWessanen (still 27.76%). Since Zandbergen also recommended staying away from ACF (which had a return of 24.91 percent), the total return of his don’ts is 19.91 percent. Wortel also correctly recommended staying away from Tulip, as it had an increase of just 3.77 percent.


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How well are they doing?

The average total return on tipped stocks between November 1st 1996 and July 9th 1997
Blue = dos
Red = don’ts

       The battle for last place is between Roel Gooskens, director of research at HSBC Van Meer James Capel and Lex van der Sommen, head of individual capital management at ING Bank at the time. Gooskens’ tips had an average return of 34.18%; he chose KPN (32.16%) and Nutricia (39.50%), made a mistake with Heineken (7.97%) and mentioned Roto Smeets de Boer as his golden tip (57.10%). Gooskens has the questionable honour of being the only one who has pointed out don’ts that have surpassed his dos. According to him, investors should stay away from BolsWessanen (27.79%), KLM (72.46%) and Hoogovens (88.63%), resulting in a rise of his don’ts to no less than 62.95 percent.

      Due to a mix of good (Randstad: 50.36% and Hagemeyer: 60.42%) and bad tips (Sligro: 4.58% and IHC Caland: 13.80%) Van der Sommen reached an average of 32.29%. He did not mention any don’ts.

      Does this prove who the guru is and who the incompetent? No. First of all, this is just a random indication; a tiny alteration on the stock market can cause upheaval in the rankings. In addition, coincidence plays the largest part, due to the small number of tips. One lucky choice and one mishap are of great consequence. Without Baan, the return of Koornwinder would have been very different; without Sligro, the tips of Van der Sommen would have looked a lot better.



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Stock market gurus divided about stock hype

1997-07-26, Leeuwarder Courant

 AMSTERDAM (ANP)

It does not look like the bull is about to leave the stock market any time soon. Stock market gurus of the Netherlands, such as Rienk Kamer and Tjalco de Witte, think the rates in Amsterdam will rise an additional 20 percent in the upcoming months. Herma Koornwinder is a little more careful. “As enthusiastic as everyone may be, there is always the chance of something going wrong.”

      The stock market prophets have different opinions as to when the turning point will be. “It is hard to predict how a psychotic mass will behave”, says Kamer, investment advisor and editor-in-chief of the magazine Financiële Strategie. Kamer is clearly the most negative of the bunch. He describes the rate increases of the past couple of weeks as outrageous. “If you take the tram today and mention that you are not investing, you would almost run the risk of being evicted by the driver.”

      Koornwinder, who was one of the few to predict the crash of 1987, refers to the hype as astonishing. In particular the ease, with which individual investors dive in, worries her. “They start very carefully with one call option, generate a nice profit, buy five more, take out a second mortgage and buy 20 additional options without any regard of the risks. That has to go dramatically wrong at some point.”

      The Dutch stock market guru is clearly annoyed by this ignorance. According to her, recent history provides enough examples of sudden turning points. She refers to the rate drop in Japan in 1990, which she claims to have timely predicted as well. Back then, most analysts were equally unaware of any threat, Koornwinder recalls. This is why the stock specialist emphasises the importance of an expert analysis, which is currently lacking in her opinion. Kamer, who has currently left the Amsterdam stock market, agrees. He cannot think of anything that validates the current stock madness. All the good news is already included in the rates, the stock market prophet believes.

      Overvalued

      In historic perspective, Dutch stocks are about 50 percent overvalued according to Kamer. “A price-earnings ratio of 12 to 15 is normal, but we are currently above 20.” Kamer is convinced that a dramatic correction is imminent. “It is hard to determine when. I think somewhere in October.”

      Tjalco de Witte, founder of the Frisian commissionaires house Intereffekt, clearly disagrees. He believes that the high rate levels are justified. “Marvellous. That the bull stays is completely justified. We have a perfect stock market: a moderate economic growth, decreasing inflation, low interest, good corporate results and beneficial exchange ratios; in fact, there is nothing that stands in the way of an additional increase.” De Witte would not be surprised if the AEX index reaches 1200 to 1300 points this year. He believes chances of a crash such as in October 1987 are very small. “Instead of looking at chances, many individual investors are only seeing the risks. Typically Dutch.”



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Stock market gurus witness continual growth

1997-07-26, Gelders Dagblad

AMSTERDAM (ANP)

It does not look like the bull is about to leave the stock market any time soon. Stock market gurus of the Netherlands, such as Rienk Kamer and Tjalco de Witte, think the rates in Amsterdam will rise an additional 20 percent in the upcoming months. Herma Koornwinder is a little more careful. “As enthusiastic as everyone may be, there is always the chance of something going wrong.”

      The stock market prophets have different opinions as to when the turning point will be. “It is hard to predict how a psychotic mass will behave”, says Kamer, investment advisor and editor-in-chief of the magazine Financiële Strategie. Kamer is clearly the most negative of the bunch. He describes the rate increases of the past couple of weeks as outrageous. “If you take the tram today and mention that you are not investing, you would almost run the risk of being evicted by the driver.”

      Koornwinder, who was one of the few to predict the crash of 1987, refers to the hype as astonishing. In particular the ease, with which individual investors dive in, worries her. “They start very carefully with one call option, generate a nice profit, buy five more, take out a second mortgage and buy 20 additional options without any regard of the risks. That has to go dramatically wrong at some point.”

      The Dutch stock market guru is clearly annoyed by this ignorance. According to her, recent history provides enough examples of sudden turning points. She refers to the rate drop in Japan in 1990, which she claims to have timely predicted as well. Back then, most analysts were equally unaware of any threat, Koornwinder recalls. This is why the stock specialist emphasises the importance of an expert analysis, which is currently lacking in her opinion. Kamer, who has currently left the Amsterdam stock market, agrees. He cannot think of anything that validates the current stock madness. All the good news is already included in the rates, the stock market prophet believes.

      Overvalued

      In historic perspective, Dutch stocks are about 50 percent overvalued according to Kamer. “A price-earnings ratio of 12 to 15 is normal, but we are currently above 20.” Kamer is convinced that a dramatic correction is imminent. “It is hard to determine when. I think somewhere in October.”

      Tjalco de Witte, founder of the Frisian commissionaires house Intereffekt, clearly disagrees. He believes that the high rate levels are justified. “Marvellous. That the bull stays is completely justified. We have a perfect stock market: a moderate economic growth, decreasing inflation, low interest, good corporate results and beneficial exchange ratios; in fact, there is nothing that stands in the way of an additional increase.” De Witte would not be surprised if the AEX index reaches 1200 to 1300 points this year. He believes chances of a crash such as in October 1987 are very small. “Instead of looking at chances, many individual investors are only seeing the risks. Typically Dutch.”



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The big gamble turns out wrong

1997-07-26, Elsevier

The five investment experts are failing miserably at predicting the AEX. ‘Expertise adds nothing to coincidence’

By Sheila Sitalsing

Where will the AEX index be at mid-1997? 620 points, one expert estimated, 650 points said another and a third predicted a decrease ‘to around the 560’. Well, predicting is a trade. It was November 1996 when Elsevier asked five professional investors: where will the AEX be in six months? At that point, the index was brushing against 600 points. Currently, it has surpassed 900.

      Sometimes, analysts are right, but never in stock market predictions. Assuming it is true that stock rates take a random walk, an unpredictable drifting motion, it is logical that predictions are correct only incidentally and that people are deemed guru after one lucky strike.

      Still, five experts were willing to accept the challenge eight months ago. Peter Wortel, head of research at Delta Lloyd Bank, showed a sense of direction: “A temporary bearish correction is realistic, after which the bullish trend will continue.” However, the quantification of the direction was somewhat faulty: Wortel expected the AEX to climb to around 630 points in May 1997. Lex van der Sommen, at that point head of individual capital management at ING Bank, did not see a turning point “provided that the interest remains more or less at the current level “. Good guess. Position AEX mid-1997: “Around the 620.”

 

19970726 

Predictions are neutral. It is scary to deviate from the consensus.

       Wrong, but not as wrong as Corné Zandbergen, head of institutional research at Generale Bank. In November 1996, he predicted a bear and no later than this year, when the American FED increases its interest”. The AEX would drop, said Zandbergen, to 560 points to end up at 600 points in November 1997. Roel Gooskens, director of research   at HSBC Van Meer James Capel, said: “For now, the stock markets will continue to grow; the AEX to 650 points in six months.” Herma Koornwinder, president of Koornwinder Market Navigation, did not name any figures, but she saw “no bear any time soon”.

      It is remarkable, the mechanisms that are activated when it is impossible to make any meaningful statements. The predictions are not that different from each other, just as with the economists who dare to make predictions about the interest. This indicates insecurity; it is scary to deviate from the consensus. In addition, predictions tend to be neutral: the predicted level does not differ much from the current level.

      When predicting stock rates, it may be more useful, as it is with interest prophecies, to refrain from naming numbers, but to stick to “if-then” theories instead: “If Greenspan increases the interest, the rates will drop.” Because, as Peter de Ridder, former president of the government body for economic planning, and manager of the Bever investment fund, said: “It is an illusion to think that one can create reliable predictions with a nice set of tools. Expertise adds nothing to coincidence.” 



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‘Investing too risky for individuals’
A look on the future
1997-12, Opzij

A look on the future

Herma Koornwinder - Stock Market Analyst

By Margot Minjon

How will the stock markets perform in the next couple of months? Bullish or bearish? Is it wise to start investing? Dutch Herma Koornwinder (57) is the ideal person to answer these questions, because she has developed a system to predict stock market rates.

      In 1969, her husband inherited a block of shares. Since he was too busy, she decided to manage it. Soon she discovered that popular theories on successful investing were often wrong. She became very interested in the subject and single-handedly developed a system that she could use to predict developments on the stock market, pretty much from behind her kitchen table.

19971200 

Investing too risky for individuals

       Initially, nobody believed that it worked. But when she predicted the stock market crash of 1987 and accountancy agency Deloitte & Touche confirmed that she had correctly predicted 22 out of 23 market developments, she started to gain recognition. She started advising large pension funds, which meant a lot to her because if a pension fund achieved 1 percent more return on its investment, the premium could be lowered several percent. She entered the public eye by making several predictions in various magazines that almost all came true. Last year, Elsevier asked five investment experts, among which was Herma Koornwinder, which stock people should buy. On November 1st of this year, the magazine revealed that her block had increased the most.

      She does not want to disclose the secret of her system, but will say that information technology is an important part of it. Recently, she sold her system for a lot of money. The buyer will be revealed soon. It is better to refrain from investing if one wants to do it on the side, Koornwinder says. “It does not suffice any more to merely read the financial news every day and to keep track of how the different funds are performing. The company itself or the country in which the company is located is no longer important. The local market strongly depends on factors from abroad. Individual investors can no longer assess the risk, unless they have made investing their day job and are using the computer to gather information from all around the world. But even then one still has to know which information is important.

      "I think individual investors should leave investing to the professionals, for instance, an investment fund. Luckily, the results such funds achieve become more and more public, which makes it easier to pick a good fund. If the results become poor, one can switch to a different fund.”

      But will the stock market go up? That is good to know before you put your money in a fund like that or decide to keep investing yourself. And which stock should one buy? Herma Koornwinder does not want to say anything about the latter question, simply because she did not keep track of all stock in the past couple of months as she was too busy selling her system. But she is willing to indicate some general trends: “People used to say that the stock market will always increase in the long term, despite the bad patches, meaning that there are not many risks if you just wait long enough. This no longer applies. Today, it is better to sell and buy timely instead of keeping stock for a long period of time. Take what happened in Japan.

       "At the start of 1990, when the rate in Tokyo was at 37,000 and all economic perspectives were good, I warned banks, pension and investment funds that the stock market would crash. Nobody believed me, but shortly after it dropped to 21,000 and in 1992 it dropped further to 14,800. Today, the rate is at around the 16,500 and does not improve. Something similar could happen here. Imagine investing one’s pension provision in those stocks. That would lead to some sleepless nights?”

      And what is the short-term advice? “At the end of September, my indicators indicated a rate drop of about 8 percent. For me, that was reason to sell, because you never know what might happen. Now, November 5th, (when this interview was conducted – Ed.) I am awaiting the right moment to issue a buy advice. The rates are fluctuating vehemently, something that may get worse in the years to come. One can benefit from it by buying and selling, but one should know what one is doing. I am convinced that it is better to leave that to the true professionals, although it is a shame that anyone can call himself an investment consultant or capital manager. Be careful is the message.”



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Outdated knowledge equals impotence

1999 – Autumn, S@fe (Robeco)

By Jan Smit

Investing in stock is a hype, among both professionals and individuals. Will this trend continue in the next century – aided by the internet, pocket computers, globalisation and rising prosperity? Or will the individual investor lose his way due to the increasing complexity of the financial markets?

A prophet is not honoured in his or her own country.

A truth that Herma Koornwinder – investment expert and visionary in the investment domain from the Dutch town of Heeze - has experienced for years. Since the start of the Seventies, she has been exploring the world of major capital, something that happened by accident. “Based on an extensive analysis, someone wrote in the newspaper: you need to buy gold now. Immediately afterwards, the gold price collapsed. I wondered how this was possible. Shortly after, the same newspaper wrote: this is Murphy’s Law, we could not have known. Well, I daresay.”

      Her conclusion: analysts and other traditional investment consultants are consistently wrong. From that moment on, Koornwinder worked on her own investment model, through years of self-study, aided by state-of-the-art computers and ingredients that do not just take the traditional financial and economic factors into account but also those of natural sciences, philosophy and mass psychology.

      For obvious competitive reasons she does not want to disclose the exact indicators she applies and how she applies them, but she is willing to say that the official prognoses of the Dutch government body for economic planning certainly are no part of it, since they are often wrong regarding their interest and growth expectations. Neither does Koornwinder overestimate popular indicators of the American economy, such as the unemployment rate and the Producer Price Index. “Until ten years ago, everyone was eagerly awaiting the monthly American trade balance figures. Then the unemployment figures are suddenly magical. They keep inventing new things.”

      Koornwinder´s unique approach did not go unnoticed. She was one of the very few to predict the stock market crash of 1987 and two years later, the plunge of the stock rates in Japan. It gained her a lot of publicity, but also a lot of scepticism. This is why, in 1994, she commissioned accountancy agency Deloitte & Touche to verify the effectiveness of her analyses over a period of five years. She passed with flying colours: in 22 out of 23 cases, her predictions turned out to be correct. According to the accountants, her returns were on average more than seven percent above the comparable stock market indexes (AEX, Dow Jones, Nikkei and the MSCI). This supported Koornwinder in her vision: if investors want to keep getting good returns in the 21st century, they should get rid of their current models. Out-dated knowledge equals impotence is her adage.

      Does her statement ring true?

      The developments appear to prove her right. The old laws seem to apply less and less in the financial world. A nice example is the sudden rate drop that plagued the stock markets in the second half of 1998. Because of the economic crises in Asia and Latin America, the stock dropped about thirty percent in value worldwide, which almost no-one predicted. Even on a micro-economic level, analysts are proven wrong time and again. Stock rates are hard to predict despite the numerous stacks of large reports. The flash capital rules the end of the century. In futuristic dealing rooms, currency and stock brokers determine the climate on the financial markets with one press of a button; 24 hours a day by the billions. And, of course, with all the associated risks.

      After all, by cleverly exploiting the loopholes in the system, derivative trader Nick Leeson burdened the previously impeccable British Barings Bank with a financial blow of more than two billion guilders. And what about the problems of the American Long-Term Capital Management. This hedge fund (a fund that usually invests in derivatives) speculated with borrowed money on a large scale. That strategy almost turned out to be fatal for the fund, which caused even the American central bank to fear a global financial crisis.

      Abovementioned developments...

      ...cannot be dissociated from the current technological revolution. Digitisation has more and more impact on the financial world. If one wants to keep participating in the world of the ‘big money’, one will have to invest heavily in automated trade systems, real-time information sources and modern telecommunications equipment. The physical stock trade has had its day. Some stock markets, such as the New York stock exchange, which stubbornly refuses to let go of its stock floor, are still resisting. But that will not last too long, because the increasing popularity of electronic stock markets such as the Nasdaq in New York and the Easdaq, its Belgian sister, form a serious threat, not to mention the rapid rise of the internet. Equipped with a mobile phone plus laptop, everyone can trade in any stock straight from his chair. As soon as that method has become common, one global electronic stock market should suffice.

      Will it ever come to that? The British newspaper, The Economist, has its doubts. Large institutional investors will never accept such a monopoly. The stock market members’ own interest – read: the generous provision income – also stands in the way of a deep concentration. Plus, the newspaper wonders, can the trade through one electronic stock market be monitored? The remarks are apt.

      More important, however, may be the question whether or not investors will massively dive into the internet in the 21st century, as everyone is expecting. In the Netherlands, online investing is still in its infancy, contrary to the United States where the first internet broker appeared more than five years ago. Currently, the country has more than seven millions cyber investors who can invest with more than two hundred web brokers, a number that is expected to exceed ten million before the end of the millennium. That rise is logical as placing an online order in the USA is much cheaper than through a bank or commissioner. Internet transactions cost seven to 25 dollars, which is almost double that of using traditional methods. Other advantages of the cyber broker era are the high speed and privacy. One mouse click and the deal is executed in no time, without intervention of a trader or advisor.

      However, in the Netherlands, internet investing is...

      ...gaining momentum, although very slowly. IMG Holland went first two years ago. Today, this small commissioner has more than 4,500 customers who place about 400 orders each day. ABN-AMRO, Rabobank and Robeco Advice have also started offering their clients the possibility of investing through the web. Will online investing be as big in the Netherlands as in the United States?

      Currently, 20,000 to 25,000 Dutchmen invest digitally. IMG director André van Eerden expects this number to rise quickly: “In three years it will be a quarter of a million,” he recently predicted in NRC Handelsblad. Time will tell whether or not he is right. Currently, the options are limited and the number of households with computers that provide access to the internet is significantly smaller here. Plus, investing is still significantly less popular in our country than in the United States.

      However, that gap is getting smaller. Until the Sixties, the stock market was the playground of the happy few. Not so strange: one needed to pay 15,000 guilders to buy Philips stock at the end of the Fifties. The strong rise of the stock market rates, the increase of capitals and the requirement to ensure one’s own pension; have in the past ten years led to an increase from 6 to 25 percent in investing households.  Whether or not this will continue in the 21st century is uncertain. “Maybe it is just a hype. Like: my neighbour struck it big, maybe I should try my hand on it as well,” says Frans de Roon, university teacher in financial markets at the Rotterdam Erasmus University. “But in the end, the necessity for most Dutch households to invest ‘for later’ is much smaller than for the average American. Most people are already in pension funds through their employer, and through that, indirectly in stock.”

      Frans Tempelaar, professor of financing at the Rijksuniversiteit Groningen, believes that online investing can easily develop into a hype: “After all, people associate the internet with success and the new thinking.” He also detects a downside for those who enter the stock market on their own without a regular broker. “The excuse that the bank issued the wrong advice is lost. If it goes wrong, the do-it-yourself broker can only blame himself.”

      But what does the increasing popularity of the web…

      ...mean for the supremacy of banks and other traditional stockbrokers? In the United States, the rise of online investment is a serious problem for them. Charles Schwab, one of the largest e-brokers has built a stock market value of 40 billion (!) dollars. That is more than a third more than the stock market value of Merrill Lynch, one of the largest business banks in the world. American investment banks did not see this coming; they assumed cyber investing would not become a serious threat until around 2010. In addition, the investment banks were afraid of deterioration in morale among their own advisors, since they saw their generous bonuses being threatened. Fear has compelled Merrill Lynch and other large business banks to give in. Partly because of their strong brand names, these organisations have sufficient strength, according to The Economist, to make up for lost time very quickly, albeit through an acquisition of a small internet broker.

      The same goes for the Netherlands, where the large banks are not to be considered internet pioneers. However, just like their American colleagues in the industry, they have sufficient clout to catch up. The success of the Rabobank is writing on the wall; at the end of last year, 12.2 percent of all stock transactions of the bank went through internet.

      Does that mean that the days of the traditional investment consultant are numbered? Not at all. According to the experts, they will have sufficient right to exist. Cause: the increasing complexity of many investment products, such as derivatives – products derived from stock and currencies. Tempelaar: “That requires expertise that goes beyond the average investor’s knowledge.” The banks, fund managers and other financial service agencies and intermediaries of flesh and blood do possess that knowledge.

      Even the major players…

      ...such as institutional investors and pension funds, have an increasing need for the specialised knowledge of large brokers. Not only has the investment world become much more complex in past decades, investors try their hand more and more on unfamiliar and more risky grounds. Until about ten years ago, Dutch pension giants such as ABP and PGGM mainly invested in bonds and other fixed interest values for security reasons. Because of the more relaxed law and the beneficial stock market climate, they have slowly changed their strategy. Today, the average percentage stock in portfolio is 43 compared to about 15 percent at the end of the Eighties. Will this trend continue after 2000 as well? Experts do not think so.

      Supervisors such as the Government Insurance Board, but also participating funds, are increasingly worried about the question whether or not the future pension obligations are in danger. “Responsible managers are already being judged on that,” Professor Tempelaar says. That same urge for certainty – asset liability – leads institutes to mainly invest in so-called quality stock; renowned funds bearing on the national indexes (the Dow Jones, AEX, CAC-40 and DAX). The result: the return on the portfolio is virtually parallel to the decrease or increase of these indicators. If the market is down, the managers have an acceptable excuse. Due to the disappearance of currency risks as the result of the introduction of the euro, institutional investors will emulate the European indexes more and more in the next century.

      Investment strategist Herma Koornwinder is baffled by this attitude. Index investment, introduced by the American economist and Nobel Prize winner Harry Markowitz in 1952, is outdated according to her. She thinks pension funds should be able to get a better return by looking for new models. This would be very welcome, as the rapid ageing of the western population is mortgaging future prosperity. “If the pension funds would get even a few percent more return, that problem would be solved.” But, to her great surprise, Koornwinder does not see the financial establishment being very active in this search. However, she remains hopeful. “In the button era of the 21st century, the computer illiterates will most certainly lose out to the Nintendo generation,” she predicts. “They will no longer accept the passive investment method.”

The Heritage of Van Oldebarnevelt

1602: Governor Johan van Oldebarnevelt initiates the establishment of the Verenigde Oostindische Compagnie (VOC), (United East Indian Trading Company), the first organization worldwide to be organized in the way of a shareholding company.

1774: Foundation of the first investment fund by Amsterdam realtor Abraham van Ketwich under the name: Eendragt maakt Magt (Power through Unity).

1817: The New York Stock Exchange opens at 40 Wall Street, 40, in New York. The New York Stock Exchange owes its name to a wall built by Dutch immigrants to protect New Amsterdam against the Indians.

1876: Foundation of the Vereniging voor de Effectenhandel (Association for the Trading in Stocks), the legal predecessor of the modern Amsterdam Stock Exchange. Initially it was located in Oude Kerk (Old Church) but later in the Hendrick de Keyser stock exchange and in 1914 it moved to Beursplein 5.

1925: Investors have a cable installed between England and America to be able to follow trading at each other’s stock exchange during a number of hours per day. To this day, the so-called “Cable” is used to determine the exchange rate between pound sterling and the dollar.

1929: Wall Street Crash. On October 24, the Dow-Jones Index drops by 12.9 percent. Some destitute investors take their lives by jumping out of windows. “Black Thursday” is the beginning of the worst economic depression ever.

1929: A group of Rotterdam businesspeople found the Rotterdamsch Beleggingsconsortium; in short: Robeco (Rotterdam Investment Consortium). This turns out to be a bad moment for just one year later 50 percent of the 1.8 million guilders start-up money is lost and only as late as 1935 can dividends be paid for the first time.

1952: American economist Harry Marcowitz formulates the Modern Portfolio Investment Theory, the so-called index investment that still has many followers.

1970: The establishment of the Reuters Stockmaster marks the beginning of the information revolution. By means of specific codes, information about each share can be called up, i.e. actual price, closing price and dividend. Until then, people depended on newspapers, telex or telephone.

1978: Frans Andriessen, the then Minister of Economic Affairs, opens the European Options Exchange. It was located at Rokin in Amsterdam and was the first European stock exchange for options with former - Minister Tjerk Westerterp as director.

1987: Introduction of the model code as a security feature for the prevention of insider trading with Dutch stocks. Two years later, the legislation “Supervision in Stock Trading” is introduced and insider trading becomes a criminal offence.

1987: On “Black Monday”, October 19, the Dow-Jones index plummets by 506 points in one day, which is approximately 23 percent.

1988: The Amsterdam Stock-Exchange introduces the Handels Ondersteunend Systeem (HOS) (Trade-Support-System) which enables electronic contact with the trading staff. This puts an end to the running/walking up and down with handwritten orders.

1995: In the US, brokers offer their customers direct stock trading through internet for the first time. Two years later, IMG Holland does the same in The Netherlands.

1997: Web-site builder Dataplace trades the first Dutch issue of securities on internet, the issue of more than 6,600 own stocks. Although successful, the pioneer in this field folds just a little over a year later.

1998: In the middle of summer, the Dutch AEX-index reaches a record of 1315.3 points. However, the “campinghausse” (camping boom) is immediately followed by disillusionment when the crises in South-East Asia and Russia, along with the Lewinsky affair, lead to a mini-crash.

1998: The end of physical trading in stocks on the AEX. The stock exchange for options moves from the Rokin to Beursplein 5.

1999: Large-scale online investment is developing. Well-established business bankers such as Merrill Lynch also decide to move into online investment. Some 5 million investors have already invested billions of dollars via the internet.



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Stock market gurus

1999-12-21, Carp

Top 5 National

5. Herma Koornwinder

Was one of few to predict the stock market crash of 1987 based on her own - meticulously kept secret - investment model. Her prediction method was supposed to be commercially applied by the Traders Society; however, this securities company went bankrupt at the beginning of this year. Pursuant thereto Koornwinder filed a claim of millions. The star of the 50-year-old is falling. But anyway, a fifth place. Remarkable: two years ago she separated from her husband, who publicly announced the divorce through a notable ad in Het Financieele Dagblad (Dutch financial journal).

4. Eddy Schekman

Contributed to programs of several Dutch television stations and TalkRadio for more than 20 years as a financial journalist. He once said about the listeners of TalkRadio: “I do not think they know the difference between Akzo and Royal Oil.”  He has an investment website, schekman.com, through which he provides the individual investor with advice. Remarkable: Schekman was reprimanded last year, when he tried to start an investment fund for the listeners of TalkRadio without a permit of De Nederlandsche Bank.

3. Jean-Pierre van Rossem

Was sentenced to five years in jail in 1997 due to fraud and deception, but was released early this summer. Derives his guru status from his investment system Moneytron, with which he generated spectacular returns in the Eighties. Lost enormous capitals in 1989 and dragged dozens of small investors with him in his fall. Remarkable: Repented during his sentence. “Now that I have absolutely nothing left, I am discovering how simple happiness is. I needed to turn 54 to discover that.”

2. Jaap van Duijn

One of the most popular consultants. Professor at the Rotterdam Erasmus University.  He is a member of the investment committees of the pension funds of Hoogovens, Akzo Nobel and KPN. Does not believe in the New Economy but – as a follower of the wave theory – does believe in long 50-year cycles, and shorter 10-year cycles. Remarkable: recently predicted that the current period of economic prosperity will end in 2015. The stock market will start its descent in 2008.

1. Rienk Kamer

Got it completely in 1996 with his prediction that a big recession was imminent. Issued the advice to go into bonds only last year, again an unfortunate choice. But he proved to be a true guru last year when he tipped Brazil Fast Food Corporation at his symposium. One day later, the Brazilian hamburger chain quoted 20 percent higher and the number of traded pieces rose from fifty to eight hundred thousand a day. Remarkable: The American public prosecutor Rossbacher once referred to Kamer’s billion dollar ‘American Land Program’ project as the ‘largest fraud scheme of this century, and maybe even in the history of mankind’. After a trial of almost eight years, Kamer was acquitted in 1990.

Top 5 International

5. Mary Meeker

Has the honorary title ‘Queen of the Net’. Also referred to as ‘the Diva of .com’. Makes a couple of million dollars a year as top analyst at Morgan Stanley Dean Witter. Was one of the first to predict the boom of the internet companies and made a name for herself with the IPO of Netscape. Suggested the stock of America Online to investors as early as the end of 1993, which was 2 dollars back then and 40 times as much today. Remarkable: e-mails clients investment advice in the middle of the night.

4. Abby Cohen

Predicted the big bull market of the Nineties and goes therefore by the name of the executioner of Wall Street. Board member of the leading American business bank Goldmann Sachs. Checks the S&P 500 index of the largest American companies. Foresees further rate increases on the American stock markets. Remarkable: was invited during the IMF annual meetings to address the bankers.

3. George Soros

Once started with a seed-capital of four million dollars. His greatest achievement was in 1992 when he was responsible, as a speculator, for the disappearance of the British pound from the European Monetary System. He made two billion dollars overnight. Afterwards, the Hungarian-American billionaire became a true philanthropist. His Open Society Foundation developed into a network of foundations in 25 countries. Lost 1.4 billion guilders this year with his internet stock. Remarkable: Soros admitted last year: “I have lost it, I feel like an old ballet dancer. I simply do not know how to do it anymore.”

2. Warren Buffet

After Bill Gates, the richest man in the world with an estimated capital of 36 billion dollars. Thinks in long terms, which led to his legendary line: “We keep making more money while we are sleeping than when we are actively investing.” He has had large stakes in American Express, Coca Cola, Walt Disney and McDonalds for many years. Remarkable: at the beginning of 1998, rumours were buzzing about large-scale manipulation on the silver market. The silver price had risen from 4.5 to 6.7 dollars within six months. When Buffet pronounced that he owned a quarter of the silver market, the rate continued to rise to 7.5 dollars, the highest rate since 1988.

1. Alan Greenspan

Chairman of the Federal Reserve, the American system of central banks. Greenspan’s every statement immediately leads to rate fluctuations.  He is, according to the American magazine Time, the third most powerful man in the United States after Clinton and Bill Gates. Went by the nickname ‘the gravedigger’ during his college years, because of his often pessimistic predictions. Gained control over the Federal Reserve just prior to the stock market crash of 1987. Remarkable: Greenspan likes speaking in riddles because he is all too aware of the possible consequences of his words. One single statement of Greenspan resulted in headlines from ‘possible recession’, ‘danger of recession increased’ to ‘recession improbable’ and even ‘no recession’ in the big American newspapers in June 1995.



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Waiting for the Nintendo generation
Investment advisor Koornwinder: 'We need people with courage'

1999-12-22, Dagblad Rivierenland

GPD

HEEZE. The world is changing, investing is changing, and with it investment theories. The controversial investment advisor Herma Koornwinder is convinced of this. The financial establishment is struggling with this and they see their large returns being threatened.

      Koornwinder taught herself the workings of the investment world by studying the international financial markets for a very long time. Five years ago, she had her advice verified by accountants. Of the 23 recommendations she made, 22 turned out to be right, including a buy advice during the Gulf War, which was met with much scepticism. According to economic science, it is impossible to correctly predict such economic turning points.


19991222 

One can trade and do business any time, any place, even with a laptop on the heath.

       Koornwinder works with her own model, Koornwinder Global Market Navigation (KGMN). She enters her core data in it, including ideas that are totally unrelated to the limited world perception of Members of Parliament and mathematical economists. The fact that customers are willing to stand in line at Albert Heijn, in America at WalMart or at the WWW (“Waiting, Waiting, Waiting”), is something investors and economists do not even want to know. “I often believe psychology or natural sciences to be of equal, or sometimes even bigger importance. Not everyone likes to occupy themselves with that,” Koornwinder says.

      With 150 million people on the internet, it does not take  an Einstein to reach the following conclusions: manufacturers of the required equipment are making good money; manufacturers of internet “traffic lights” and “roads” are making a lot of money; the internet needs guidance programs, and he who makes them is making loads of money. They are the walls, signs and doors in the internet building. Most of those companies are, strangely enough, sustaining only losses, yet some are worth more than Heineken - which with its tangible product, at least, quenches one’s thirst during the summer. And there are other curiosities that used to be considered to be normal.

      “After the crash of 1987 and the mini-crash of 1989, which I alone in Europe predicted, nothing had changed about the companies for which the rates had collapsed.” The advisor sees more issues which are commonly accepted in the financial world, but which she finds too crazy for words, such as investing according to stock market averages, or indexes. At least two-thirds of the index investors achieved less return than their indicator. “Investment experts have dozed off.”

      Hype

      The high-tech world of the digital era, by some dismissed as an overstrained hype, provides the tools of the new millennium, Koornwinder believes. “One can trade and do business any time, at any place, even with a laptop on the heath. Electronic trade, e-trade or e-commerce is the future. Computers will take over the thinking processes, as is already happening in the US.” She foresees a future world with floating trains, artificial intelligence and advanced computer and internet services. “If senior executive Lou Gerstner can reach 300,000 people through their IBM with one press of a button, a bank can take its clients off the market in dangerous situations with that same press of a button.”

      Herma Koornwinder has high expectations of the young, who have the privilege of growing up with computers. “Give any 10-year-old a computer, and he will work miracles. Just wait until the Nintendo generation takes the floor. We need to try to forget old knowledge and purge our head for the new era. We are being hit by a tidal wave. The economy is changing. We will have a flash economy.

      “The Netherlands is passively sitting on its IKEA bank, watching Big Brother while drinking a beer. We need people with courage and creativity, people who are willing to stick their necks out,” is something that Koornwinder wants to shout from the rooftops. “We have two e-commerce professors in the Netherlands, and we should have hundreds. Our policymakers are people above 50,” she says, referring to “the adorable bumbling” with the computer mouse of Prime Minister Kok, who mistook the device for a remote control.

      Koornwinder’s core themes remain, invariably and inevitably, high-tech and unemployment, ageing and affordability of pensions. “For the imminent ageing of the population, we should already have had a plan ready, otherwise it will not be affordable.

      After all, foresight is the essence of government. Why not invoke a care duty instead of military duty, in which all layers of the population are involved. If the pension premiums also make a few percent more than with the current investment theories, we can steer the ageing in the right direction, which means that medication does not have to be rationed, that patients do not have to wait in the hallway and that waiting lists are a thing of the past. We can turn pig farms into farm campsites where old people come in with a cane, to leave in Bermuda shorts on a bike.”



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'We are going to get a Flash Economy'
Investment advisor Koornwinder predicts enormous changes

1994-12-24, De Gooi- en Eemlander

By Raymond Peil

From the four corners of the earth contrarian investment advisor Herma Koornwinder is gathering proof: the traditional common truths can be thrown in the trash. Elatedly, she quotes top analyst Pieter Wind, of ING Barings, who confirms that traditional valuation methods are hardly the only considerations in evaluating the financial markets. Even Nobel Price winner Markowitz admitted last year his theories do not work anymore.

Koornwinder’s often-used simile of the Greek philosopher Plato envisages investment experts and advisors as cavemen: put a member of a primitive tribe in the world above ground and, after his return, he will try to convince his fellow cavemen that there is a different world out there. Nobody will believe him, and even worse, they will consider him to be dangerous.
Herma Koornwinder: “The world is changing, and investing is changing with it as are investment theories. And this will only accelerate in the new millennium.” The financial establishment is, unavailingly, shrinking from it, as it sees its generous income being threatened.
Koornwinder taught herself the workings of the investment world by studying the international financial markets for a very long time. Five years ago, she had her advice verified by accountants. Of the 23 recommendations she made, 22 turned out to be right, including a buy advice during the Gulf War, which was met with much scepticism. According to economic science, it is impossible to correctly predict such economic turning points.
Koornwinder quotes the International Statistics Institute: “Is economy a science? Or are investment experts good at hiding their cluelessness in a mush of numbers, as politicians do with words?”
This disqualification of both professional groups has been included in her own model, the Koornwinder Global Market Navigation (KGMN). She enters her core data in it, including ideas that are totally unrelated to the limited world perception of Members of Parliament and mathematical economists. Much more than an investment advisor, she is a world student, a ‘global watcher’, and she feels as if she is a product of the much-maligned study house method that she applauds.
The fact that customers are willing to stand in line at Albert Heijn, in America at WalMart or at the WWW (‘Waiting, Waiting, Waiting’), is something investors and economists do not even want to know. “I often believe psychology or natural sciences to be of equal or sometimes even bigger importance. Not everyone likes to occupy themselves with that,” Koornwinder says.


Einstein
With 150 million people on the internet it does not take an Einstein to reach the following conclusions:
- manufacturers of the required equipment are making good money;
- manufacturers of internet “traffic lights” and “roads” are making a lot of money;
- the internet needs guidance programs, and he who makes them is making loads of money.

They are the walls, signs and doors in the internet building. Most of those companies are, strangely enough, sustaining only losses, yet some are worth more than Heineken - which with its tangible product, at least, quenches one’s thirst during the summer. And there are other curiosities that used to be considered to be normal. “After the crash of 1987 and the mini-crash of 1989, which I alone in Europe predicted, nothing had changed about the companies for which the rates had collapsed.”
The diving and practicing fitness financial advisor sees more issues which are commonly accepted in the financial world, but which she finds too crazy for words, such as investing according to stock market averages, or indexes. At least two-thirds of the index investors achieved less return than their indicator. “Investment experts have dozed off.”

Koornwinder also points her finger at the large or specialised banks such as ABN Amro and Merrill Lynch or Morgan Stanley. Especially in fair weather, they performed well, but during the Asia crisis, the stock rates of these banks were halved within six months, dragging along small and large investors with them due to their advice, including the pension funds that managed about a thousand billion guilders for our old age. Koornwinder: “It would mean a tremendous source of prosperity in the future if our pension premiums would achieve just a few percent additional return every year. One should be in clover during good and bad weather.” Leaving our old-age provision in a nest egg at the index, as we do now, will lead to certain poverty or rationed medication, according to Koornwinder.
The high-tech world of the digital era, by some dismissed as an overstrained hype, provides the tools of the new millennium, Koornwinder believes. “One can trade and do business any time, at any place, even with a laptop on the heath. Electronic trade, e-trade or e-commerce is the future. Computers will take over the thinking processes, as is already happing in the US. White-collar activities will be taken over by computers.”

She foresees a future world with floating trains, artificial intelligence and advanced computer and internet services. “If senior executive Lou Gerstner can reach 300,000 people through their IBM with one press of a button, a bank can take its clients off the market in dangerous situations with that same press of a button. But one should know what the danger exactly entails! By the way, did any of the banks predict the Asia crisis?”

Herma Koornwinder has high expectations of the young, who have the privilege of growing up with computers. “Give any 10-year-old a computer, and he will work miracles. Just wait until the Nintendo generation takes the floor. We need to try to forget old knowledge and purge our head for the new era. We are being hit by a tidal wave. The economy is changing. We will have a flash economy.
“The Netherlands is passively sitting on its IKEA bank, watching Big Brother while drinking a beer. We need people with courage and creativity, people who are willing to stick their necks out,” is something that Koornwinder wants to shout from the rooftops. “We have two e-commerce professors in the Netherlands, and we should have hundreds. Our policymakers are people above 50,” she says, referring to “the adorable bumbling” with the computer mouse of Prime Minister Kok, who mistook the device for a remote control.
Koornwinder foresees so many changes in the “diginomy” that she believes there should be a ministry of ICT. “Preferably with Roel Pieper as minister. The dot-commers, cyber minds, whizz-kids, e-traders, etc., are up now.” She compares the current high-tech landslides with the discovery of the light bulb which changed society and life. People were no longer restricted to working during daytime, they could work in the factory when it was dark outside. "New insights from this moment need to be given a chance. After all, the computer has the same function as the clay tablet once did in a way.”

The core themes in the discussion with Herma Koornwinder remain, invariably and inevitably, high-tech and unemployment, ageing and affordability of pensions. “For the imminent ageing of the population, we should already have had a plan ready.”

Foreseeing
“Otherwise it will not be affordable. After all, foresight is the essence of government. Why not invoke a care duty instead of military duty, in which all layers of the population are involved. If the pension premiums also make a few percent more than with the current investment theories, we can steer the ageing in the right direction, which means that medication does not have to be rationed, that patients do not have to wait in the hallway and that waiting lists are a thing of the past. We can turn pig farms into farm camp-sites where old people come in with a cane, to leave in Bermuda shorts on a bike.”

By that time Herma Koornwinder hopes she has peace of mind and will be able to explore the natural sciences, in her study on the natural behaviour of fish in the deep sea. "After all, I pull the alarm for twelve years already," she says.



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Investor of the 21st century is an e-trader
Koornwinder foresees Digital Flash Economy

1999-12-31, Dagblad Zaanstreek

By Raymond Peil

The traditional common truths can be thrown in the trash. Contrarian investment advisor Herma Koornwinder is gathering proof to support this statement from all quarters of the world. Elatedly, she quotes top analyst Pieter Wind, of ING Barings, who confirms that traditional valuation methods are hardly the only considerations in evaluating the financial markets.

      Koornwinder’s often-used simile of the Greek philosopher Plato envisages investment experts and advisors as cavemen: put a member of a primitive tribe in the world above ground and, after his return, he will try to convince his fellow cavemen that there is a different world out there. Nobody will believe him, and even worse, they will consider him to be dangerous.

      Herma Koornwinder: “The world is changing, and investing is changing with it as are investment theories. And this will only accelerate in the new millennium.” The financial establishment is, unavailingly, shrinking from it, as it sees its generous income being threatened. Koornwinder taught herself the workings of the investment world by studying the international financial markets for a very long time. Five years ago, she had her advice verified by accountants. Of the 23 recommendations she made, 22 turned out to be right, including a buy advice during the Gulf War, which was met with much scepticism. According to economic science, it is impossible to correctly predict such economic turning points.

      Koornwinder quotes the International Statistics Institute: “Is economy a science? Or are investment experts good at hiding their cluelessness in a mush of numbers, as politicians do with words?” This disqualification of both professional groups has been included in her own model, the Koornwinder Global Market Navigation (KGMN). She enters her core data in it, including ideas that are totally unrelated to the limited world perception of Members of Parliament and mathematical economists. Much more than an investment advisor, she is a world student, a ‘global watcher’, and she feels as if she is a product of the much-maligned study house method that she applauds.

      The fact that customers are willing to stand in line at Albert Heijn, in America at WalMart or at the WWW (‘Waiting, Waiting, Waiting’), is something investors and economists do not even want to know. “I often believe psychology or natural sciences to be of equal or sometimes even bigger importance. Not everyone likes to occupy themselves with that,” Koornwinder says.

      Einstein

      With 150 million people on the internet it does not take an Einstein to reach the following conclusions:

  • manufacturers of the required equipment are making good money;
  • manufacturers of internet “traffic lights” and “roads” are making a lot of money;
  • the internet needs guidance programs, and he who makes them is making loads of money.

       They are the walls, signs and doors in the internet building. Most of those companies are, strangely enough, sustaining only losses, yet some are worth more than Heineken - which with its tangible product, at least, quenches one’s thirst during the summer. And there are other curiosities that used to be considered to be normal. “After the crash of 1987 and the mini-crash of 1989, which I alone in Europe predicted, nothing had changed about the companies for which the rates had collapsed.”

      The advisor sees more issues which are commonly accepted in the financial world, but which she finds too crazy for words, such as investing according to stock market averages, or indexes. At least two-thirds of the index investors achieved less return than their indicator. “Investment experts have dozed off.”

      Koornwinder also points her finger at the large or specialised banks such as ABN Amro and Merrill Lynch or Morgan Stanley. Especially in fair weather,  they performed well, but during the Asia crisis, the stock rates of these banks were halved within six months, dragging along small and large investors with them due to their advice, including the pension funds that managed about a thousand billion guilders for our old age. “It would mean a tremendous source of prosperity in the future if our pension premiums would achieve just a few percent additional return every year. One should be in clover during good and bad weather.” Leaving our old-age provision in a nest egg at the index, as we do now, will lead to certain poverty or rationed medication, according to Koornwinder.

      The high-tech world of the digital era, by some dismissed as an overstrained hype, provides the tools of the new millennium, Koornwinder believes. “One can trade and do business any time, at any place, even with a laptop on the heath. Electronic trade, e-trade or e-commerce is the future. Computers will take over the thinking processes. White-collar activities will be taken over by computers.”

      She foresees a future world with floating trains, artificial intelligence and advanced computer and internet services. “If senior executive Lou Gerstner can reach 300,000 people through their IBM with one press of a button, a bank can take its clients off the market in dangerous situations with that same press of a button. But one should know what the danger exactly entails! By the way, did any of the banks predict the Asia crisis?”

      Flash economy

      Herma Koornwinder has high expectations of the young, who have the privilege of growing up with computers. “Give any 10-year-old a computer, and he will work miracles. Just wait until the Nintendo generation takes the floor. We need to try to forget old knowledge and purge our head for the new era. We are being hit by a tidal wave. The economy is changing. We will have a flash economy.


19991231

Investment consultant Herma Koornwinder proves that “trade and business can be conducted anywhere, even with a laptop on a heath”.

       “The Netherlands is passively sitting on its IKEA bank, watching Big Brother while drinking a beer. We need people with courage and creativity, people who are willing to stick their necks out,” is something that Koornwinder wants to shout from the rooftops. “We have two e-commerce professors in the Netherlands, and we should have hundreds. Our policymakers are people above 50,” she says, referring to “the adorable bumbling” with the computer mouse of Prime Minister Kok, who mistook the device for a remote control.

      Koornwinder foresees so many changes in the “diginomy” that she believes there should be a ministry of ICT.  “Preferably with Roel Pieper as minister. The dot-commers, cyber minds, whizz-kids, e-traders, etc, are up now.” She compares the current high-tech landslides with the discovery of the light bulb which changed society and life. People were no longer restricted to working during daytime, they could work in the factory when it was dark outside. “In a way, the computer has the same function as the clay tablet once did.”

      Koornwinder’s core themes remain, invariably and inevitably, high-tech and unemployment, ageing and affordability of pensions. “For the imminent ageing of the population, we should already have had a plan ready, otherwise it will not be affordable. After all, foresight is the essence of government. Why not invoke a care duty instead of military duty, in which all layers of the population are involved. If the pension premiums also make a few percent more than with the current investment theories, we can steer the ageing in the right direction, which means that medication does not have to be rationed, that patients do not have to wait in the hallway and that waiting lists are a thing of the past. We can turn pig farms into farm camp-sites where old people come in with a cane, to leave in Bermuda shorts on a bike.”



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Small investor holds his breath

2002-07-26, Eindhovens Dagblad

By Lucas van Houtert

EINDHOVEN – Day after day, the exchange rates keep dropping further and further, although yesterday, for the first time in a long time, a tiny revival could be detected. Dutch Mr P Van der Heijden is keeping faith in a brighter future. ‘Our investment club is not panicking,’ he says. But should the members of the club decide to sell their shares today, they will have lost half of their input in a year’s time.

      ‘Just as profit is not profit until you cash in your shares, loss is not loss until you sell them,’ says Van der Heijden. For the club members, the current rate drop ‘simply’ means they need to hold on to their shares and limit the damage in options. Whereas crashes would have resulted in massive sales in the past, at the moment small investors are keeping as quiet as a mouse, according to local investment consultants. ‘People have become aware that there are risks attached to investing and that they will not be bringing in the moon on a stick,’ says F Swinkels of Swinkels Consultancy in Eindhoven.

      ‘My clients have a farther horizon. Furthermore, we have advised them not to invest with borrowed money, which means that they are not forced to take a loss now.’ Dutch stock market expert H Koornwinder alerted us to the ‘great danger of banking’ as early as during the bull market of February 2000: because of hyped-up rates, the stock market could collapse like a house of cards at any moment: ‘The complexity of the financial world has become such that it is almost impossible to grasp for the man in the street. In the meantime, the investor loses on three different levels; while the value of his investments is decreasing, his pension premium is increasing because the pension funds are also losing on the stock markets. And investment mortgages are also problematic.’

      It is not limited to just a few investors who feel the pain on the stock market. One in every four Dutch households has invested in stock, according to research by the Dutch National Bank. More than half of the pension capital is invested and one in three mortgages that have been concluded in the past two years have something to do with investing.



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Index portfolio
Word definition

2003-08-01, Het Financieele Dagblad

Word definition

Investment portfolio that is, composition wise, identical to the content of a certain index. (Financial Dictionary)

In the news: According to investment expert Herma Koornwinder, the arrival of the information era is undermining the traditional investment models. In this day and age, spreading risks and index investing have been reduced to “mere static truths“.



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Investing on the crest of a wave
According to Herma Koornwinder: diginomy catches up with old models
2003-08-01, Het Financieele Dagblad

By Frits Conijn

AMSTERDAM

The world has changed but the investment models have not kept up with it. Investment expert Herma Koornwinder calls for radical changes.

      Following five years of advising retirement funds and a 35-year study of the financial markets in search of factors that determine share prices, Herma Koornwinder feels it is time to put her findings down in a book: “I have been told on various occasions that I am about 30 years ahead of my time. I do hope that future generations will want to understand more about investments.”

      According to the investment expert from Brabant province in the Netherlands, people fail to make appropriate use of all the possibilities that computer science provides us with, thanks to artificial intelligence: “The spread of computerization, the move from industrial society to knowledge- based society, i.e. diginomics, has consequences similar to those we saw when we changed from an agricultural society to an industrial economy. We seriously need to take this into account.”

      According to Koornwinder, traditional investment models are being undermined by the increase in computer-controlled investment activities that will be the medium in the upcoming era of computerization and computer science: “At present, the spread of risk in index investments is still a static truth. However, with information flashing back and forth around the globe like lightning, it is much easier, faster and more effective to detect investment options the world over. Why should one still invest in gold or bonds when there are other options elsewhere waiting to be picked up?”

      Herma Koornwinder developed her vision during the years 1987-1997 when she worked as an advisor for several retirement funds of companies such as Shell and Swiss Life: “I realized that these institutions can best be compared with oil tankers floating on the ocean without a rudder, oblivious to bad weather that is about to hit them. Therefore they cannot react to it. Not only Dutch, but also US retirement funds, performed considerably lower than the S&P index over a period of some 15 years.”

      Over a period of 10 years, Koornwinder was able to make correctly, with one exception, all predictions about price drops higher than 10%, always using one and the same model. She also predicted the Black Monday of October 1987. In early 1991, at the time of the first Gulf War, when the whole financial world was most negative, she was optimistic about share prices. In January 1990, she warned some ten institutional investors of a crisis in Japan, and just before the bust of the internet bubble, on February 10, she...

      'Index investments big misunderstanding'

      ...gave a talk at an Amsterdam convention about the risks of using conventional models for asset management of retirement funds.

      She had Deloitte & Touche, an accountant firm, test and confirm the reliability of her work in a report: “All my predictions between 1989 and 1994 were compared with price developments of indices from the whole world, just to prove that they were right in 23 out of 24 cases.” The Koornwinder model is not based on spread but rather on concentration and selection. “My research showed that one needs to have an eye for seasons, as in nature. Comparing it with sports, in the world of investments, people use the same outfit for swimming and ice-skating. The approach of most analysts is too fragmentary, they are looking at one country only, and often at only one sector of that particular country.”

      We all grew up with the myth of the Nobel Prize winners Sharpe and Markowitz, according to whom the market is an efficient mechanism. This would imply that in the long run no portfolio can do better than the index as no-one has better long-term information. This makes the index always right, which is actually a serious misconception.

      With such an approach one misses out on returns which can, according to Koornwinder, actually be achieved with other methods. “In my approach, I actually make use of the seasonal differences. I am just like the surfer looking for the crests of waves and after every wave that has gone there comes another one. Investments are about recognizing trends and getting out in time.”



20030801
Herma Koornwinder working on the heath.

      According to Koornwinder, the traces of conventional models can best be seen in the social services. “If the performance of retirement funds could be improved by one per cent only, all problems could be solved. They have failed their members dreadfully, losing billions of their premiums.  Investing is a matter of trust and this was abused. Long-term investments with the highest possible percentage of shares was mostly their preferred approach, as a result of which we now all have to work longer due to a shortage of funds. This is too much for words!”

      “As a result of this policy, the next generation will have to pay higher premiums. It is high time that citizens become more assertive in financial matters and start asking more questions about returns on funds than they did in the past, which I hope to stimulate with my book.”



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Shareholders unable to play crucial part

2003-08-18, Het Financieele Dagblad

By E van Groeningen

The Dutch Corporate Governance committee Tabaksblat pins too much faith on shareholders and clears the road for more undesirable hostile takeovers according to Eugène van Groeningen.

      The moment the chairman of the supervisory board opened the shareholders meeting, one of the attendees jumped up. On behalf of a huge foreign pension fund, he was to vote against all agenda items including the opening, questions and closure. This was obviously an extreme example of shareholder participation. But, even so, it illustrates a problem to which the Dutch Corporate Governance Code does not pay proper attention. I am talking about the extent to which shareholders can, want and should (!) participate in a sensible manner.

      Some private investors follow one or more companies for years and are able to make expert comments during the shareholders meeting, but the vast majority of private investors have no connection with ‘their’ company except the profit of their investment, and will easily trade in one investment for another. They are not bothered about corporate governance. They do not want to act as shareholders. Still, Tabaksblat feels they need to be able to participate by remote voting. It is not hard to imagine to what rumpus this will lead.

      Institutional investors are more competent, but I equally doubt if they feel the need to act in a shareholders meeting. They know all about the investment business and derivatives. Sometimes they even know at least something about hundreds of companies. This is probably why they have realised that it is impossible for them to say anything useful about how each individual company should be managed. Apparently, neither had they a clue what WOL, Ahold, KPN, Getronicis, Enron and many others were up to.

      Investment expert Herma Koornwinder recently (FD 1.8.03) said that pension funds had failed their contributors miserably. Adriaan Hiele talks about the ‘failing investment policy of pension funds, banks and asset managers’ (NRC 3.8.03). Dick Snijders, former CEO of the Philips Pension fund, recently (FD 12.8.03) provided three reasons why company pension funds rather stayed away: no profit, too expensive and not suitable in relationships with other companies.

      Apparently, they seldom or never feel called upon to intensively meddle with company policy. In my opinion, it’s because they lack the required business knowledge; they do not want to upset the board; they do not see any alternatives; they trust the supervisors and accountants, and so on. This is completely legitimate on their part; it is not as if large shareholders have an obligation to be present, speak, vote and co-manage. They are experts in selecting investment areas and instruments, spreading the risks and judging the management and reporting. Their contributors expect a high return and not that they play an active part during shareholders meetings.

      The Dutch Corporate Governance Code feels that institutional investors should be obliged to attend or to explain why they cannot attend (comply or explain). Will it suffice that someone who will not be attending announces that his knowledge of the tangible businesses of the hundreds of companies concerned is not up to the mark and that he will attend only when something happens that is truly unacceptable? Such as the appointment of incapable executives, diamond handshakes, exorbitant remunerations, misleading reporting and supervisors who have been lulled asleep.

      Luckily, those are the exact subjects that will be adequately purged, thanks to the new regulations on transparency of management and the strict monitoring by supervisors and accountants of the Dutch Corporate Governance Code. Yet still the poor shareholder, with all his disabilities and flaws, has been invested with the highest power, and the protective part that trust offices and preferred stock have played are being substantially restricted. Not only is this an inconsistency, it poses an imminent danger to all other stakeholders, for institutional investors cannot but use their new power to the benefit of their own contributors. Hence the benefit of the company itself, and that of other stakeholders, will come in second.

      It is worrying that this also goes for so-called hostile takeover bids. Imagine a random entity that makes a relatively high offer, making use of a temporary setback at the company and/or the general stock market: two euros for Getronics, ten for KPN, fifteen for Ahold? Many private and institutional investors would gladly welcome such an entity with its ‘quick’ bid. Such an intruder is detrimental to the prey company and its other stakeholders. A company should be able to protect itself against such predators.

      When the shareholders meeting starts appointing undesirable executives or supervisors, demanding excessive dividends, blocking acquisitions, prohibiting (dis)investments and so on, it could be clearing the way for an intruder (who will gladly participate). The more power shareholders get, the more a thorough, new protective construction is needed. A unanimous veto of supervisors and executives together, which can be challenged only by a lawsuit, would be the absolute minimum of protection needed.

      If we turn a blind eye to this danger, the future of exchange funds will be under a direct threat of the new shareholders’ power. Young entrepreneurs will think twice before deciding to float their company under those circumstances. Needless to say, I find the proposals of Tabaksblat regarding the power of shareholders irresponsible. This is all the more cogent, as the code is to take effect on January 1st and no transitional provisions have been proposed. Furthermore, nobody knows how the EU (Bolkestein) and the USA (Sarbanes Oxley) will further erode the residual protective constructions in the future.

      I agree that everything possible needs to be done to rehabilitate the shaken trust in the stock exchange and many recommendations made by the Corporate Governance committee are important contributions to that end. It is, however, crucial that the position of shareholders be reconsidered.

      Mr E J J C van Groeningen LL.M (1932) is a business lawyer and former CEO and company secretary of a listed company.



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The deciphered future

2007-10-20, Eindhovens Dagblad

By Chris Paulussen

On Monday, October 19th, 1987, the stock markets collapsed. Dutch Herma Koornwinder was one of the few people who had seen this crash coming. Her unconventional predictions of market developments, based on her own system of stock price analysis, met with both sensation and scepticism.

      In 2000, she turned her back on the investment world, but continued her own research. Now the time has come to reveal her amazing discoveries to the world. She would like to share her story with Mr Plasterk, the Dutch Minister of Science, Culture and Education, and preferably also with

      Mr Van der Hoeven, the Minister for Economy. And the Nyenrode School of Business would make a wonderful setting for such an event. It is clear that Herma Koornwinder likes to think big. The world shall know when the time has come for her to come forward with her findings. “Believe me, I am in for some hard times,” she predicts. “Yet the world needs to know about this.”

      What Herma Koornwinder has to say is quite something: she is convinced that her research has uncovered an “ancient language”. However, she has kept silent about it until she can confirm it. Now that she can, she claims she also has proof of nothing less than intelligent design, a controversial term, not only among scientists.

      Intelligent design is the modern version of the account of the Creation. It is based on the assumption of the existence of a higher power - which Herma Koornwinder calls a “master creator” – which created the basic conditions for the development of the world.

      Just how controversial this theory is became clear in 2005. Mrs Maria van der Hoeven, the Dutch Minister of Science and Education at the time, suggested that it was well worth the time and effort to take a serious look at intelligent design. Well, she suffered for it and caused a storm of criticism both inside and outside parliament. Ronald Plaster, professor of neurobiology at that time, as a fervent believer in the theory of evolution, was quick to respond.

      This illustrates the sensitivity of the matter with which the 68-year old Herma Koornwinder is going to meddle. To understand why, we have to go back 20 years to 1987 when the financial world was hit by a shockwave on October 19. On that day, the historic Black Monday, stock prices plummeted by tens of percentage points, to almost everybody’s surprise, yet not to Koornwinder’s. Her self-developed system for the analysis of stock prices had not let her down. “Everyone was very positive at the time,” she remembers. “A few days prior, I had phoned banks and retirement funds to warn them about the imminent dramatic events. But my warnings were not taken seriously.”

      During the following years, Herma Koornwinder kept drawing attention with her defiant predictions. In an effort to silence the sceptics, she had all her work over a period of five years verified by accountancy agency Deloitte & Touche. The outcome was that, amazingly, her buy and/or sell advice had often been right. Her criticism of retirement funds and insurance companies remains severe: “With their traditional methods of analysis they do not succeed in outperforming the indices.”

      Herma Koornwinder is capable of tracking the price developments of more than 3,000 stocks worldwide, thanks to her system. She says: “Most professional analysts are unable to track more than 30 stocks.”

      She is not willing to reveal the secret of the Koornwinder Global Market Navigator. After some insistence she did, however, agree to give us a little insight: “I take everything I think will contribute to a good analysis into consideration. Short- and long-term interest rates, international exchange rates and bonds, but also prices of materials, such as corn and pork, for example. Naturally, I also take market sentiment and psychology into account. Is there angst or confidence in the market and is this justified?” Unemployment figures? “No, they mean nothing as they are a consequence of other developments.” Political decisions? “Politics has nothing to do with it, as it is never abreast of things.” Further insistence leads nowhere. “I think I have revealed enough as it is,” she adds, rather determinedly.

20071020

Herma Koornwinder: “This is so huge
that effects will be beyond imagination
.”

       In 2000, her work took a different turn when she decided to dedicate all her time to her own research: “I could have gone on in the financial world for many more years. I realised, however, that my own research was much more profound than merely predicting what would happen on the stock market. Something drew me, although I did not know what. I started to read a lot on various subjects. I have read and re-read more than 550 books about economics, philosophy, culture, psychology and other subjects. I picked out certain paragraphs and made notes. It felt as if it was an exciting discovery tour.

      “While reading, I stumbled upon the ancient language mentioned by people such as Plato, Einstein and Blavatsky. I discovered codes in number sequences. It was never like, well, I think I will start decoding number sequences now. I just realised that that was what I had been doing all those years. I am able to discern patterns and synchronicity in these number sequences. And not only in the Netherlands. It is transcendent, a universal language that can be applied anywhere, even in America or China.

      “Whenever I noticed a development in a market fund, I recognized symbols or signs. I received signs that said something about the future. It is as if we receive impulses in the past that create a pattern that enables us to know what is about to happen. This means that, at this very moment, we have already created our future. Understanding this has been a moving as well as a baffling experience. My upbringing was a strictly Catholic childhood, but I have not set foot in church since I was 15. I have never believed in intelligent design nor have I ever been consciously engaged in it. In hindsight, however, I realise that that is exactly what I have been dealing with all these years.

      “I have been able to do this because I am independent. I did not know exactly what I was looking for, but luckily did not have a sponsor to whom I was responsible. Neither would this ever have been possible without modern computer technology that has allowed me to collect and process huge amounts of data. I did not, however, appreciate the profundity of the matter until I visited the planetarium in Nantes four years ago where the planets and astral constellations were explained to me. At that moment, I realised that there had to be forces unknown to this world behind all this. What a revelation! I saw a parallel between that connection, that unity and the matter I was studying. It was a very emotional moment indeed.”

      Koornwinder does not claim to have deciphered the ancient language: “I have discovered fragments of the ancient language; letters if you will. It is a start, but a lot more research is needed.” It seems a big step from the harsh world of the big money to the ancient language and intelligent design. “For people who are afraid or unwilling to think outside the box it might seem somewhat drifty,” she admits. “Yet quite the contrary is the case. It is as concrete as can be. I compare it with the deciphering of the ancient Egyptians’ hieroglyphics. Once the French scientist Jean-Francois Champollion knew which signs stood for Cleopatra and Ptolemaeus, he had the key to deciphering the scripts completely.”

      Although she could have carried on with her research for many more years, the time has arrived when she is ready to come forward and present her findings to the wider public. She would have done so earlier had she not been delayed due to personal commitments. But, in the not too distant future, the world will hear from her. “Without a doubt, a serious discussion will break loose,” Koornwinder expects, yet she is not worried about it. “I have proof. The scientific community will be baffled. This is so huge that effects will be beyond imagination. This is like the discovery of the electrical lamp. Night became day. Nobody could have foreseen the impact of this discovery.” She is absolutely sure it will have a huge impact.

      Is she actually implying that this ancient language could be used to predict disasters and wars? The answer is very telling. “In early 1991, I worked as a market analyst for retirement funds and asset management companies. It was in the middle of the first Gulf War. Everyone was so edgy that they were glued to the TV watching CNN. I started receiving some tentative buy signals through my system. Completely contrary to the trend, I provided a positive advice to, among others, Brenca, the investment fund of the Brenninkmeijer family that owns C&A. One of the Brenca directors then made the remark: ‘Do you realise, Mrs Koornwinder, that you are actually predicting the outcome of the war?’”

      Intelligent design fills gaps in evolution theory

      Almost no-one still believes that God created the world in six days some 6,000 years ago, as it says in the Bible. Darwin’s evolution theory of some 150 years ago has been widely accepted since then. According to this theory, life on this planet has developed over billions of years through a process of natural selection, the so-called survival of the fittest.

      The evolution theory does not, however, have an answer to all the questions. Intelligent design is a scientific movement that does not accept the explanation that the beginning of life was coincidental. Furthermore, it suggests that, given the complexity of evolution, there must have been an intelligent designer that controlled it all. Thus, based on gaps in the evolution theory, a new version of the account of the Creation has come about. Followers of the evolution theory, however, believe these gaps can be explained only by scientific means.



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ALARM BELLS

Scroll down to read how
Herma Koornwinder tirelessly rang alarm bells in the media, from 1987 onwards, about the coming digital revolution and how the financial world, due to outdated practices, was unprepared for it.

- - - - - - - - 1987 - - - - - - - -

Head and shoulders
1987-12-12 NRC Handelsblad

In the period leading up to October 19, Black Monday, Herma made insistent phone calls to professional analysts explaining her concerns about the stock markets as all indicators were just a little too negative, yet these analysts were mostly happy and optimistic.  >>

- - - - - - - - - 1988 - - - - - - - - -

The Hallelujah effect
1988
Mees Bulletin

However, you hardly ever hear the unequivocal announcement of a recession, a depression, a bear market or a crash.
A welcome exception to this sad rule is established by Mrs Koornwinder...
 >>

Professional analysts too commercial
1988-04-02
De Financiële Telegraaf

How is it possible that well-paid technical analysts at the banks miss things that Mrs Koornwinder does not miss, based on virtually the same analysis, and that they discard an emerging signal when the facts are pointed out to them?  >>

- - - - - - - - - 1991 - - - - - - - - -

Providing a better grip on the situation
1991-02-07
Trends

'...visual perception is very important, and this is finally starting to sink in in financial circles.'  >>

Technical analysis - Chart
guidance in uncertain times

1991-03
NCVB

'In the current uncertain situation, in which the classic economic principles apparently no longer apply, technical analysis provides you with a better grip on the situation.'   >>

- - - - - - - - - 1992 - - - - - - - - -

Numerous answers possible to what private investors should do, but… one thing is clear: value of advice is extremely relative
1992-04
Beursplein 5
  >>

- - - - - - - - - 1993 - - - - - - - - -

Hunt for the promising stock
1993-01
Arts & Auto

Mrs Koornwinder says that spreading to
prevent risk is becoming outdated. Why invest in gold, real estate, electronic or whatever, if there are more interesting options elsewhere, she wonders. Instead of spreading, localising promising stock will be the motto of the 21st century. And that starts in the Nineties, says Mrs Koornwinder.
  >>

Groundbreaking theory for financial markets

'Active management
certainly has a future'

1993-06-18
Beleggers Belangen

'Today’s computer controlled buy and sell behaviour can and should not just be approached based on annual report analysis, acquisition rumours and hunches.'

'The market actually has a memory.
Rates do not fluctuate at random, but in waves.'


'During the past seven years, it was
possible to ensure timely tracking of a number of crashes and rallies on the international financial markets, while even indicating the moment of outbreak, with rate target.'
 >>

- - - - - - - - - 1994 - - - - - - - - -

Technical analysis warranty accountant versus the non-believers

1994-11-18
Het Financieele Dagblad


The performance of pension funds could be much better than it is today. Would certain cutbacks even be necessary if those institutional investors handled our money in a more ‘innovative’ way. >>

'Investment of public money generates too little return'
1994-12-17
Brabants Dagblad

Koornwinder was expressing her views very loudly in 1989. 'But when you are trying to convince investors that their investment methods can be improved, you suddenly run into a wall of bureaucracy. All of a sudden it turns out to be very difficult to achieve a breakthrough with a new vision.' >>

Daring prognoses often spot on

Koornwinder advocates ’investment technology’
1994-12-17
Eindhovens Dagblad


Modern management theories should
enter the investment world….
  >>

- - - - - - - - - 1995 - - - - - - - - -

'Invisible' economy casts its shadows forward

Accountant confirms
reliability of Koornwinder's
stock market predictions

1995-01-10
Eindhovens Dagblad


'Public funds are very poorly managed.
Profit can be improved dramatically by using investment technology.'


Koornwinder is merciless towards a recent study which claimed it was impossible to systematically achieve good investment returns. 'Is that not exactly what I am doing?' she says. 'I am baffled that institutional investors accept a return that is equal to the index this easily. After all, this means that if the index drops, the performance drops as well.' >>

Innovation investment models required

Analyst Koornwinder
pleads for renewal

1995-02-25
Eindhovens Dagblad


Koornwinder feels it is about time banks realise they need to start innovating in order to perform well consistently. 'The traditional work method no longer suffices.
We are entering the era of knowledge technology: we can move our way of thinking into higher gear. Old laws and regulations are overruled.' 
>>

Self-made stock market guru has solution for pensions

Koornwinder sees possibilities for better fund returns
1995-03-12
Arnhemse Courant


Her motive? Social concern.  >>

Lesson for pension giants

Investment expert develops very lucrative method
1995-06-12
Utrechts Nieuwsblad


Most investors and banks use obsolete models. >>

KGMN makes active
investing possible

1995-10
Management Info


'We need to start exploring; we need to scour the world again for opportunities and possibilities in the Digital Age, just like we did in the Golden Age.' >>

A splendid outperformance

Herma Koornwinder,
an investment advisor willing to go against the grain

1995-10-20
Management Team


'If pension funds and investors would use better methods, the premiums could be lowered, and the Netherlands would become more competitive and therefore more prosperous.' >>

Herma Koornwinder, a Dutch guru

Outperforming the
market is possible

1995-11-10
Beleggers Belangen


'Biggest mistake by analysts is not to search for the reason why.'  >>

Interview with Herma
Koornwinder, Dutch stock market guru

1995-11
FiscAlert


'A turning point in my life was when I discovered how poorly investment companies and pension funds are investing their money. The Netherlands should not let the threatening international tidal wave of knowledge technology drown it.' >>

The zapping investor
is emerging

1995-12-29
Algemeen Dagblad


'The zapping investor, one who is constantly switching from one information source to the other, is emerging. He is adjusting his portfolio at lightning speed, with one press of a button, every day, every hour. We are on the threshold of a completely different investment world...' >>

- - - - - - - - - 1996 - - - - - - - - -

’Investor needs to be much more assertive'

Investment analyst Herma Koornwinder is annoyed by the attitude of the banks
1996
GPD


'We are entering the era of knowledge
technology. We are able to think faster and at a higher level. Old laws and rules are overruled.' 
>>

‘The investment industry
needs to change’

1996-01-26
Beleggers Belangen


'When the ƒ770 billion in pension funds in the Netherlands generates even one per cent more return, the premiums can go down 16 per cent. The job of pension funds is to obtain an optimal return on investment. Anything that gets in the way of that needs to be discussable.' >>

New investment technology vital to finance effects of ageing and high-tech unemployment
1996-02-01
Pecunia Magazine


'The digital age and its 'emerging sciences of complexity' is already casting its shadow forward over our society.' >>

Rabobank Groningen
and environs provide
insight into investing

1996-03
Own edition Rabobank


She introduces techniques of the 21st century into the 20th century. >>

'Spreading of portfolio does not reduce risk at all'

Investment analyst Herma
Koornwinder overthrows
investment profundities

1996-03-13
De Tijd (Belgium)


'I strive to track and eliminate the risk. The profundities currently in use in the investment world only add to the risk.'  >>

The dissident vision
of Herma Koornwinder

1996-10-11
Intermediair


According to the accountants, Koornwinder succeeded in out-performing the leading stock market indicators by a long shot time after time, both in bull and bear markets. That is remarkable, since in past years more and more investment experts have become convinced that, regardless of their strategies, it was impossible to beat the market indexes in the long term. >>

Herma Koornwinder:
Old stock-market wisdom is 
obsolete

1996-12
GPD dagbladen

>>

Computers have quickly
caught up with time-honoured investment profundities

1996-12-27
Leeuwarder Courant


'The investment world has changed
fundamentally since 1987. Ninety per cent of the big money is speculative,' says investment consultant Herma Koornwinder.
In addition, she predicts that the emerging high-tech era will cause bigger changes.
  >>

- - - - - - - - - 1997 - - - - - - - - -

Investment signals
1997-03
Perspekt (ABN Amro)


She does want to disclose that she disregards the official prognoses of planning agencies: 'Because their interest and growth expectations are way too often wrong.' >>

Stock market gurus divided about stock hype
1997-07-26
Leeuwarder Courant


This is why the stock specialist emphasises the importance of an expert analysis, which is currently lacking in her opinion. >>

'Investing too risky
for individuals'

1997-12
Opzij


'People used to say that the stock market will always increase in the long term, despite the bad patches, meaning that there are not many risks if you just wait long enough. This no longer applies. Today, it is better to sell and buy timely instead of keeping stock for a long period of time.' >>

- - - - - - - - - 1999 - - - - - - - - -

Outdated knowledge equals impotence
1999 – Autumn
S@fe (Robeco)


Or will the individual investor lose his way due to the increasing complexity of the financial markets? 'Digilliterates will certainly lose from the Nintendo-generation.'  >>

Waiting for the Nintendo generation

Investment advisor Koornwinder: We need people with courage
1999-12-22
Dagblad Rivierenland


'Investment experts have dozed off.'  >>

Investor of the 21st century is an e-trader

Koornwinder foresees
digital flash economy

1999-12-31
Dagblad Zaanstreek


'The world is changing, and investing is
changing with it as are investment theories. Just wait until the Nintendo generation takes the floor. We need to try to forget old knowledge and purge our head for the new era. We are being hit by a tidal wave. The economy is changing. We will have a flash economy.'
>>

- - - - - - - - - 2002 - - - - - - - -

Small investor holds his breath
2002-07-26
Eindhovens Dagblad


Dutch stock market expert Herma
Koornwinder alerted us to the 'great danger of banking' as early as during the bull market of February 2000.
'The complexity of the financial world has become such that it is almost impossible to grasp for the man in the street.'
 >>

- - - - - - - - - 2003 - - - - - - - - -

Index portfolio:
Word definition

2003-08-01
Het Financieele Dagblad


'...the arrival of the information era is undermining the traditional investment models. In this day and age, spreading risks and index investing have been reduced to 'mere static truths'.  >>

Investing on the crest of a wave

'Diginomics' makes old investment models obsolete, says Herma Koornwinder
2003-08-01
Het Financieele Dagblad

The world has changed but the investment models have not kept up with it. Herma Koornwinder calls for radical changes. >>

- - - - - - - - - 2007 - - - - - - - - -

The deciphered future
2007-10-20
Eindhovens Dagblad


Herma Koornwinder kept drawing attention with her defiant predictions. Her criticism of retirement funds and insurance companies remains severe: 'With their traditional methods of analysis they do not succeed in outperforming the indices.'
>>

- - - - - - - - - - xxx - - - - - - - - -

 
 
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