THE LYNCH MODEL

HARNESSING THE POWER OF SUPPLY AND DEMAND
The Lynch Model is the result of over 42 years of relentless and passionate pursuit of mathematics and research focused on the supply and demand forces within the stock market. The result of this dedication is the development of a logical, mathematical based investment model for automatically managing stocks, averting investment risks and creating wealth. The Lynch Model is a mathematical system which provides a completely logical investment method that offers great advantages for conservative large portolio management. In testing The Lynch Model across a wide range of historical stock data from 1975-2007, The Lynch Model typically outperformed all the major indicies and BARRON'S, and made a number of remarkable stock recommendations including selling ENRON, WORLDCOM, DELTA AIR LINES and DELPHI well before these stocks plummeted and their companies went bankrupt.
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A LOGICAL INVESTMENT SYSTEM FOR INVESTMENT RISK MANAGEMENT
A sophisticated investor should work with an investment advisor that has a strategy to deal with bear markets. The losses suffered by those advisors sticking it out to the bitter end of a bear market will find that it can take years to recoup. Do you have this kind of time? After the market collapse of 1987, it took two years for the market to recapture its peak levels. After the bear market of 1973-1974, it took ten years before the Dow reached its previous high and after the crash of 1929 it took more than two decades.

OVER 42 YEARS OF RESEARCH INTO SUPPLY AND DEMAND
Larry D. Hofmann, President of Lynch Investments, developed The Lynch Model over a forty two years period. The Model is based upon the economic principle of supply and demand with "greed" playing its part.

The economic principle of supply and demand states that the amount of a product or service provided and the amount demanded determine the price at which a transaction will occur. Therefore, price should tell us what the demand and supply were at a given price level.

Using mathematical formulas and computer algorithms, Mr. Hofmann was able to isolate the supply and demand forces. What he discovered was that the price actually produced two supplies. One called the "selling supply price" and the second called the "buying supply price". These numbers are reflected as "dollars and cents," not in share volume. Demand was not "one price", but a cocktail (if you will) of recent prices. The buyer (demand) not the seller (supply) determines the transaction price.

All markets are nothing more than pure supply and demand at work, with human action reacting to that ongoing supply and demand relationship. This is ultimately what determines price, and opportunity emerges when this simple and straightforward relationship is out of balance. The Lynch Model finds these opportunities.

If the Model finds that a given stock's demand has fallen below the "selling supply price" we sell the stock. If demand exceeds the "buying supply price" we buy the stock. The goal is to maximize gains when stock prices climb and minimize losses when they fall. Using the Model gives your equity portfolio more growth with less risk.


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