This document discusses the Blencathra Futures Investment Model, which aims to identify equity investments that will significantly outperform the market. It explains that while market indices provide overall trends, some equities within the market will see much higher growth. The model focuses on flagging these high-growth equities early in their cycle. Graphs and an example dataset demonstrate that the top 10% of equities by performance can see returns over 30% higher than the market average within a period of 100 days. The document provides evidence that the model's predictions are consistent with actual market data.

1. A new approach to equity investment opportunities
Making the Blencathra Futures Investment Model work for you
Equity markets have a range of characteristics . One important one being the obvious observation is
that growth in equity value will vary from equity to equity. Within the market there will be number
shares that outperform the rest. It is these shares that the Blencathra Model focuses on identifying
early on in their growth cycle. These are not only expected to outperform the market index but show
exceptional growth.
The paper below shows the growth of equities both in theory and in actual practice and explains the
processes used by the model to identify these shares
How Blencathra Futures Investment model can aid you in identifying shares that will
outperform market trends and how to flag buy and sell points for investments and enable
you to review hundreds of shares in a few minutes to enable you to identify those shares
which have the potential for high performance
Characteristics of equity market performance (theory)
Indices
The key indicator of the performance of an equity is the markets index eg FTSE100, Dow Jones,
SP500, CAC40
These indices give an indication of the overall direction of individual shares . The index is built from
data derived from individual shares some which will outperform the index and others that lag
behind the index
Fig 1 shows what a theoretical equity performance in a market could look like after a 100 days of
trading. This distribution is based on a normal curve ie 68% of prices will be close to the index but
there are a significant number of equities that show a 30% to 40% better performance than the
index (30 equities out 490 in the example) conversely in this example there are 30 equities showing
a similar % shortfalls. The trick is to find a methodology to identify those high flyers.
Fig 1

2. Characteristics of equity market performance (actual)
It is easy to set up theoretical models that produce the results you want. To test this you need to
look at the markets actual performance Fig 2 below is based on the actual performance of the FTSE
ALLSHARE index . An index based approximately 600 equities. The period covered in the chart is for
100 days from XX/XX/XX . All the prices have been set to base of 100 at day 1 those enabling the
relative performance of different equities to be measured
Fig 2

3. The top performing group in the chart is made up of 60 equities and has achieved an average
growth of 35% over the 100 day period. This is consistent with our modelled projections
We can further analyse this data by taking the top 10% performers and break this into 10% groups
each group containing six equities. The results are shown in fig 3. This now starts to show some
remarkable results. The top 6 equities have shown an average growth over the 100 day period of
70% plus and the next 24 equities have shown growth in excess of 30% over the period
Fig 3

4. Below is a list of equities, which have achieved over 20% growth in 100 days and form part
of the top four performing groups in graph above We have set the opening price to a base
of 100 with the latest and peak prices been measured against this base
Base closing highest
opening price price
Equity price
IP Group 100.0 208.2 208.2
Ashtead Group 100.0 174.6 174.6
Anite 100.0 176.2 176.2
Mecom Group 100.0 132.7 147.3
Imagination Technologies Group 100.0 173.6 173.6
888 Holdings 100.0 167.9 169.5
Collins Stewart Hawkpoint 100.0 135.5 137.7
Wolseley 100.0 144.0 144.0
Optos 100.0 132.3 142.1

5. bwin.party digital
entertainment 100.0 143.2 143.6
Yell Group 100.0 131.1 139.3
Fenner 100.0 130.8 132.7
Old Mutual 100.0 134.5 134.5
Micro Focus International 100.0 135.2 137.9
Barratt Developments 100.0 151.3 151.3
Hunting 100.0 125.1 125.6
Atkins (W S) 100.0 134.0 134.0
Fiberweb 100.0 129.2 129.2
Barclays 100.0 149.3 149.3
NCC Group 100.0 119.6 124.5
Regus 100.0 146.8 146.8
ITV 100.0 141.6 141.6
Premier Farnell 100.0 133.0 138.3
easyJet 100.0 144.4 144.4