About Us.
Potomac Advisors is a family owned and operated business.
It’s very nice to meet you.
Rich Paul
Founder & CIO
Rich Paul is the Founder and Chief Investment Officer of Potomac Advisors, an RIA and signal providing business. He is also the founder and former CEO of Potomac Fund Management, an SEC-registered RIA, and a co-founding member of the National Association for active money managers (NAAIM), the professional association for active money managers. He served on NAAIM’s first Board of Directors, and was the Chairman of NAAIM’s Performance Measurement Standards. He is also the co-author of the Journal of Potfolio Management’s landmark article on active money management, “Market Timing Works Where it Matters Most…. In the Real World.” (Volume 18, Number 4, Summer 1992).
Holding a Bachelors of Electronic Engineering degree from New York University, Rich Paul’s first career lasted almost 25 years, working as a Systems Engineer for a variety of companies, including Boeing, IBM and GE. Here, his experience analyzing the performance of weapons systems provided the basis for developing the risk / reward analysis that is fundamental to Potomac’s asset management strategy.
Rich first began investing in 1965, and after doing his research, purchased the Fidelity Trend mutual fund, the best performing mutual fund at that time. He sold these assets in February, 1972, one month after the market top and the beginning of the worst bear market since the depression. His hunch: that the nifty fifty was creating a bubble, and the stock market was due for a cool down.
Unfortunately, he still held onto his GE qualified investment plan - which at the time, was earmarked for retirement - only to see it get crushed during the ensuing bear market. Although it only represented a small portion of his total assets, he realized he couldn’t tolerate the drawdowns that come along with a buy and hold strategy. It wasn’t until he found technical analysis in 1979, that he would return to investing.
At the time, Rich was working at the Johns Hopkins Applied Physics, where he started an invested club with his fellow engineers and scientists, applying active risk management and technical analysis to their investment strategies. In six months he doubled their money. As a result, he started his first firm, Safe Harbor, whose performance would later be recognized by MoniResearch, a publication that tracked and ranked active money managers.
In it’s September / October 1987 edition, MoniResearch describes his “outstanding job” managing his tactical allocation strategy, while verifying his track record going back to 1979. Here, he came in first in the 1-year and 3-year category, and 7th in the five-year category.
In 1987, Rich founded Potomac Fund Management (PFM), continuing the strategies he managed at Safe Harbor, serving also as the company’s Chief Investment Officer. In MoniResearch’s 1998 ranking, his same tactical asset allocation strategy would go on to win first place for the two longest time periods evaluated, returning 27.8% on a four-year period and 31.5% on a three-year period. This time period corresponds with the 1998 mini-bear market, when the S&P500 dropped almost 20% due to the high yield bond market takedown. Potomac’s pure market timing strategy was ranked second in the 4-year period (+26.7%) and third in the 3-year period (+27.7%).
At Potomac Fund Management, Rich managed a variety of strategies, including high-yield bonds and tactical asset allocation strategies. In 2002, he started the first iteration of his very first mechanical, quantitative strategy, which we now know as “EVO.” After growing the firm to over $100 million AUM, Rich sold his majority interest. At this time, he formed his current company, Potomac Advisors, to continue to provide signal and security selections to PFM. He continued to serve on their investment committee until he sold his remaining stock in the company in early 2014.
With the sale of his stock, Rich expected to hang up his shingle and enjoy retirement in sunny Sarasota, Florida. However, his passion for perfecting his mechanical stock market trading system has not ebbed, but rather has soared with its success. In 2017, EVO 1 won “best strategy” in NAAIM’s annual Shark Tank Competition, gaining widespread notoriety.
Both EVO 1 and EVO 2 are consistently ranked by Theta Research as one of the highest performing strategies across all seven time frames measured (1-10 years). That passion also drives a desire to maintain the legacy of what has become an increasingly more impressive long-term track record. In order to continue this legacy, Rich has teamed up with his daughter, Meghan Paul, formerly of American Express and LearnVest, an online financial planning service provider, where she was Vice President of Product Development, and his brother-in-law, James Taylor, a seasoned software engineer, who along with Meghan, serve as the EVO system backups, to ensure that the legacy of the trading systems is maintained for the foreseeable future.
Rich lives in Lakewood Ranch, Florida, with his wife, Flossie, and pug, Gusto.
*”Market Timing Works Where it Matters Most…in the real World,” The Journal of Portfolio Management, Volume 18, Number 4, Summer 1992
Meghan Paul,
Vice President
Meghan is no stranger to entrepreneurship. After jump starting her career in the fast paced world of startups, she served as Ignite NYC’s event producer. This organization of “Technorati” is a hub for New York’s thinkers, makers and doers. Meghan’s experience in the financial sector began when she joined American Express after they bought Revolution Money, later renamed Serve Enterprises. There she was a Sr. Product Manager, developing the BlueBird card for Wal-Mart. Meghan was wooed away from American Express by the online financial planning startup, LearnVest, to become the Vice President of Product, where she oversaw the development of their financial planning software. LearnVest was recently acquired by Northwestern Mutual for ~$375m. As an equity owner in LearnVest, and with the rapid growth of Potomac Advisors, the timing was right to join Potomac Advisors, making it a true family owned and operated firm, with the goal of maintaining the legacy of EVO far into the future.
Meghan graduated from Vanderbilt University in 2005, magna cum laude, with a double major in economics and political science.
At Potomac Advisors, Meghan is responsible for operations and growth.
Meghan lives in Los Angeles, CA, with her husband, Pete, and her golden retriever, Minnie, and her Scottish Fold cat, Nala.
James Taylor,
Senior Trading Systems Analyst
James has more than 30-years of experience as a computer systems technical analyst, first with the University of Texas computer lab in Austin, where he graduated with a degree in Mathematics and minor in Computer Science. He continued his career working for Schlumberger Technologies, the world’s leading provider of technology for the gas & oil industry, and Peoplefluent, a leading cloud-based human resources platform. James specializes in B2B integrations and data integrity protocols, and is fluent in several computer programing languages, including SQL.
At Potomac Advisors, James overseas data integrity while serving as EVO’s backup for the maintenance and evolution of the EVO trading system. As an outsider, with respect to the biases associated with the fear and greed that govern many who invest in the stock market, James brings with him the logical mind of a student of mathematics who can understand the probabilities and statistics that have made the algorithms of EVO so successful in the past.
James lives in Austin, Texas, with his wife Carolyn and his cat, Harry Potter.