Comments on: Reader Question on Stock Newsletters http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Aleks http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66162 Aleks Mon, 10 Sep 2007 19:26:20 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66162 I've had the Fool's articles in my feed reader for about 6 months now, and I'm thinking of dropping it. Their headlines are usually intriguing, but then when I go and read the article it's almost always disappointingly shallow and common sense advice that I already know. It lacks the personality of a blog and the in-depthness of the Economist or Bloomberg. I’ve had the Fool’s articles in my feed reader for about 6 months now, and I’m thinking of dropping it. Their headlines are usually intriguing, but then when I go and read the article it’s almost always disappointingly shallow and common sense advice that I already know. It lacks the personality of a blog and the in-depthness of the Economist or Bloomberg.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66155 Canadian Capitalist Mon, 10 Sep 2007 18:04:00 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66155 Dave: Thanks for your comments. I was trying to recall the names of the portfolios and your comment has brushed up my memory. JDSU, INTC, MSFT, PFE, YHOO etc. were the "Rule Makers" and HGSI, CRA, MLNM, SBUX, EBAY etc. were the "Rule Breakers". The "Foolish Four" was a twist on more popular "Dogs of the Dow" strategy and in hindsight was an exercise in data mining. Dave: Thanks for your comments. I was trying to recall the names of the portfolios and your comment has brushed up my memory.

JDSU, INTC, MSFT, PFE, YHOO etc. were the “Rule Makers” and HGSI, CRA, MLNM, SBUX, EBAY etc. were the “Rule Breakers”. The “Foolish Four” was a twist on more popular “Dogs of the Dow” strategy and in hindsight was an exercise in data mining.

]]> By: the Wealthy Canadian http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66154 the Wealthy Canadian Mon, 10 Sep 2007 17:58:39 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66154 I like to occasionally look at the Fools' blogs and other free newsletters, etc. I have no faith in them whatsoever, but they sometimes have ideas or stocks worth exploring for myself. I would never blindly follow any of their advice, but I do like to get new perspectives. I like to occasionally look at the Fools’ blogs and other free newsletters, etc. I have no faith in them whatsoever, but they sometimes have ideas or stocks worth exploring for myself.

I would never blindly follow any of their advice, but I do like to get new perspectives.

]]> By: Dave http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66148 Dave Mon, 10 Sep 2007 17:20:12 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66148 Those guys are marketing geniuses and that's about it. A long time ago, I used to read their blog religiously. They used to have all sorts of filters and stock-picking systems they would try out, Rule Makers, Rule Breakers, Foolish Four, etc... They got rid of the Foolish Four a while back because of it's poor performance after touting it for years. It was a filter where you take the yields of the stocks in the Dow and divide by the square root of the price, sort in descending order and drop the first one. There was a version before that that didn't use the square root of price. It didn't do as well so they dropped it. They had a "lab" of sorts where they would try different things like this, the good ones survived, the bad ones didn't make the cut, or disappeared over time. Survivorship bias is thus rampant within the Food (and in the investing community at large). They give very selective data (notice those performance figures are over the last 5 years, since 2002, when this recent bull market got started) and obviously also make use basic statistics and the fact that if 1000 people are flipping coins, at least one person is bound to get 10 heads in a row. I don't even recognize half of those new portfolios they have on their home page: Global Gains, Inside Value, Income Investor, Champion Funds. Where are the underperformers? I'm glad you brought this up CC, it's an important topic as so many people poor money into these newsletters every year, only increasing their costs and decreasing their returns. Those guys are marketing geniuses and that’s about it. A long time ago, I used to read their blog religiously. They used to have all sorts of filters and stock-picking systems they would try out, Rule Makers, Rule Breakers, Foolish Four, etc… They got rid of the Foolish Four a while back because of it’s poor performance after touting it for years. It was a filter where you take the yields of the stocks in the Dow and divide by the square root of the price, sort in descending order and drop the first one. There was a version before that that didn’t use the square root of price. It didn’t do as well so they dropped it. They had a “lab” of sorts where they would try different things like this, the good ones survived, the bad ones didn’t make the cut, or disappeared over time.

Survivorship bias is thus rampant within the Food (and in the investing community at large). They give very selective data (notice those performance figures are over the last 5 years, since 2002, when this recent bull market got started) and obviously also make use basic statistics and the fact that if 1000 people are flipping coins, at least one person is bound to get 10 heads in a row. I don’t even recognize half of those new portfolios they have on their home page: Global Gains, Inside Value, Income Investor, Champion Funds. Where are the underperformers? I’m glad you brought this up CC, it’s an important topic as so many people poor money into these newsletters every year, only increasing their costs and decreasing their returns.

]]> By: Phil S http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66130 Phil S Mon, 10 Sep 2007 16:02:46 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66130 That Benj Gallander guy was at the Financial Forum trade show (usually takes place in January every year here in Toronto). But so was about a dozen other guys peddling investment newsletters and internet based investment research services. You also get to hear them speak but that only brings out who the best showmen are, not their investment acumen, so to speak. As a side note, the only one at the Financial Forum who sold me on their publication was Tim Cestnick, who publishes books which are basically centred around taxation. Saving money on taxes, in my humble opinion, is more of a "sure bet" than hitting the jackpot on a penny stock. As another side note, they also had lots of stock promoters who were peddling the stocks of various junior mining, technology and biotech research at the show. In some cases, they were pure marketing / promotion people. In some other cases, you get to chit-chat with one of the company executives (CFOs, COOs, etc.) who were working the booth. It was certainly interesting, although I admit that none of them have ever gone beyond my "watch list" to date. That Benj Gallander guy was at the Financial Forum trade show (usually takes place in January every year here in Toronto). But so was about a dozen other guys peddling investment newsletters and internet based investment research services. You also get to hear them speak but that only brings out who the best showmen are, not their investment acumen, so to speak.

As a side note, the only one at the Financial Forum who sold me on their publication was Tim Cestnick, who publishes books which are basically centred around taxation. Saving money on taxes, in my humble opinion, is more of a “sure bet” than hitting the jackpot on a penny stock.

As another side note, they also had lots of stock promoters who were peddling the stocks of various junior mining, technology and biotech research at the show. In some cases, they were pure marketing / promotion people. In some other cases, you get to chit-chat with one of the company executives (CFOs, COOs, etc.) who were working the booth. It was certainly interesting, although I admit that none of them have ever gone beyond my “watch list” to date.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66119 Canadian Capitalist Mon, 10 Sep 2007 14:05:40 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66119 Thanks for your comments. I occasionally check The Investment Reporter at my local library as a starting point for research. Not so much lately, as I am more focussed on cleaning up our portfolios. Thanks for your comments. I occasionally check The Investment Reporter at my local library as a starting point for research. Not so much lately, as I am more focussed on cleaning up our portfolios.

]]> By: willfly http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66117 willfly Mon, 10 Sep 2007 13:58:05 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66117 I subscribed to a buyback newletter couple of years back, but failed achieve their amazing results. Most of my trade spreads were way higher then what newsletter was achieving. I subscribed to a buyback newletter couple of years back, but failed achieve their amazing results. Most of my trade spreads were way higher then what newsletter was achieving.

]]> By: Steve http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66065 Steve Mon, 10 Sep 2007 06:48:59 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66065 Hulbert Financial has been rating newsletters for years, well worth the free 30 day look/see and subscribe to it if you feel as I do: http://www3.marketwatch.com/store/products/hfd_30_day.aspx?siteid=mktw&dist=JHGGimT Cheers, Steve www.healthyexpat.com www.eslspider.com Hulbert Financial has been rating newsletters for years, well worth the free 30 day look/see and subscribe to it if you feel as I do:

http://www3.marketwatch.com/store/products/hfd_30_day.aspx?siteid=mktw&dist=JHGGimT

Cheers, Steve

http://www.healthyexpat.com
http://www.eslspider.com

]]> By: Mac http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66039 Mac Mon, 10 Sep 2007 02:38:51 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66039 I subscribe to the "Contra The Heard" newsletter (www.contratheheard.com). They have a 10-year return of 23.4% for the portfolio. There are several reasons that I like their newsletter: - subscriptions are limited to 1000 people - there is a range for renewal subscription fees (you pick how much you pay them based on how good their advice was!) - you receive an email for every buy and sell with an explanation and a "purchase weighting" or percentage to sell - a percentage of their profits from the newsletter is donated to charity That being said, over 90% of my investments are in index funds or index ETFs. But it is human nature to want to "hit a home run" occasionally, which I have been fortunate enough to do with some of their picks, and it is fun to follow their stocks. For more on their approach to investing, I would recommend the book "The Contrarian Investor's 13" by Benj Gallander, one of the co-founders of the newsletter. I subscribe to the “Contra The Heard” newsletter (www.contratheheard.com). They have a 10-year return of 23.4% for the portfolio. There are several reasons that I like their newsletter:

- subscriptions are limited to 1000 people
- there is a range for renewal subscription fees (you pick how much you pay them based on how good their advice was!)
- you receive an email for every buy and sell with an explanation and a “purchase weighting” or percentage to sell
- a percentage of their profits from the newsletter is donated to charity

That being said, over 90% of my investments are in index funds or index ETFs. But it is human nature to want to “hit a home run” occasionally, which I have been fortunate enough to do with some of their picks, and it is fun to follow their stocks. For more on their approach to investing, I would recommend the book “The Contrarian Investor’s 13″ by Benj Gallander, one of the co-founders of the newsletter.

]]> By: Investoid http://www.canadiancapitalist.com/reader-question-on-stock-newsletters/#comment-66038 Investoid Mon, 10 Sep 2007 02:02:52 +0000 http://www.canadiancapitalist.com/2007/09/09/reader-question-on-stock-newsletters#comment-66038 I've paid for such services in the past, just to see how 'real' their stated returns are. I didn't find it that useful - at best I used it as a filter to analyze certain companies more in depth. One thing to watch out for - if the newsletter promotes their amazing returns on specific picks only, it's a red flag. Just because they did great on a few stocks such returns do not demonstrate how their overall portfolio/stock ratings have done. I’ve paid for such services in the past, just to see how ‘real’ their stated returns are. I didn’t find it that useful – at best I used it as a filter to analyze certain companies more in depth.

One thing to watch out for – if the newsletter promotes their amazing returns on specific picks only, it’s a red flag. Just because they did great on a few stocks such returns do not demonstrate how their overall portfolio/stock ratings have done.

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