Author Topic: Stock picking tip services  (Read 2564 times)

throwaway_for_biz

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Stock picking tip services
« on: July 21, 2020, 05:51:21 AM »
I am thinking of setting aside a portion of my net worth to value invest in 10-15 companies for the long term. I know that trying to beat the market is probably a fools game, especially as I can't put crazy hours of research in.

So I am thinking of subscribing to a stock tip service. I understand that with thousands/millions of people managing portfolios, the luckier ones will do so well that they can set up services like these. So at the time I invest that good luck has happened and they might just be average or even poor investors. However, I enjoy cheering on individual companies as opposed to the S&P. And I think the best stock tip services do great analysis so they have a decent chance of beating the market or at least keeping pace with it.

Here are some services I am looking into:

Motley Fool: https://www.fool.com/investing/motley-fool-stock-advisor-on-sale-for-99-a-year.aspx - Since the launch of the Stock Advisor program, the Fool’s stock picks have yielded returns of ~473%, whereas the S&P 500 yielded returns of ~100%.

My Wall St: https://mywallst.com/horizon -13x over the last 10 years vs S&P ~3x

Questions:

1. What do you think of this strategy? Positives/negatives
2. Anyone else following this strategy? Please let me know your experience.
3. Are there any other stock tip services I should check out? Is there a comparison of them anywhere? Can't seem to find one. I would be happy choosing the one that provided the best return over the last 10 years, as long as they provide good research alongside it.
« Last Edit: July 21, 2020, 05:53:39 AM by throwaway_for_biz »

PaulMaxime

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Re: Stock picking tip services
« Reply #1 on: July 21, 2020, 08:16:37 AM »
I'm a fan of the Motley Fool. The services are a great value and they share the philosophy of buying and holding businesses for the long term.

You'll likely get a lot of naysayers on here but I've been very successful investing with them. I've averaged approximately 21% per year for the past 14 years largely following their advice.

It's only $99 per year so not much in the grand scheme of things. Way better than paying someone a percentage of your assets to underperform.

I would recommend listening to some of their podcasts to get an idea what they are about https://www.fool.com/podcasts/
« Last Edit: July 21, 2020, 08:20:59 AM by PaulMaxime »

The_Big_H

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Re: Stock picking tip services
« Reply #2 on: July 21, 2020, 08:39:21 AM »
Are You serious?  Those are utter scams or wastes of times and money and it’s easy to figure out how:

If someone or some organization were actually GOOD at stock picking do you think they would be selling it to retail investors for $99?  That’s a billion dollar skill!  It’s akin to sitting down to a poker table and the sharks are giving you advice.

No, any half decent stock market index beating advice/skill would be mostly kept secret and used to make only the individual/organization that figured it out rich.  Releasing that stock picking advice to a large number of people would negate that advantage.

Professionals who try and maybe sometimes succeed at gaining a market edge use supercomputers with hugely expensive fiber optic connections because the speed of computers and the limitations of freaking light speed are how they gain their edge. You aren’t getting that for $99

Also, maybe assess what this would actually do.
If you are assigning 10% of your net worth to this and somehow you beat the market by 10% consistently (which would be amazing) you have increased your net worth by... wait for it .... 1%. It’s not really worth it unless you go half in or more to actually have an effect

The fact that most people only do this with a small chunk of their account tells me deep down they know this is basically gambling. Which, you know, fine whatever but if I’m gambling (I don’t) Id want to do it near free booze, comped buffets, and strippers, not on a computer screen with a portion of my freedom.



lemonlyman

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Re: Stock picking tip services
« Reply #3 on: July 21, 2020, 09:24:47 AM »
If someone or some organization were actually GOOD at stock picking do you think they would be selling it to retail investors for $99?  That’s a billion dollar skill!  It’s akin to sitting down to a poker table and the sharks are giving you advice.

No, any half decent stock market index beating advice/skill would be mostly kept secret and used to make only the individual/organization that figured it out rich.  Releasing that stock picking advice to a large number of people would negate that advantage.

Professionals who try and maybe sometimes succeed at gaining a market edge use supercomputers with hugely expensive fiber optic connections because the speed of computers and the limitations of freaking light speed are how they gain their edge. You aren’t getting that for $99

None of that is true. He's conflating investing advice (long term) and trading advice (short term) and ignoring the past performances of the services and PaulMaxime. Picking Netflix in the mid 2000s, which The Motley fool did, took many years to prove out. They're selling research for $99. A lot of money can be made selling research while waiting for the companies to execute which is the business model of those services. If their picks did terribly over the past decade, it wouldn't be a very good future business model. Also, if you think a stock will be a juggernaut in 10 years, keeping it a secret from retail investors is a terrible idea; you would want high demand on the stock to both raise the price and stabilize the float over the long term.

I agree that it is a bad idea to just put your money into whatever stocks these services spit out. They're only for ideas, but you still need to do your own research and agree with the main long-term thesis for why those companies are good investments.

throwaway_for_biz

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Re: Stock picking tip services
« Reply #4 on: July 21, 2020, 09:26:35 AM »

If someone or some organization were actually GOOD at stock picking do you think they would be selling it to retail investors for $99?  That’s a billion dollar skill!  It’s akin to sitting down to a poker table and the sharks are giving you advice.

The Motley fool likely sells thousands of subscriptions, they have a huge following. That's not a negligible amount of money. Why would they not do it? It doesn't hinder their strategy, in fact it helps it because they have a following that purchases the same stocks slightly delayed. Unless I am mistaken here, please feel free to correct me if I am wrong.

Are You serious?  Those are utter scams or wastes of times and money and it’s easy to figure out how:

No, any half decent stock market index beating advice/skill would be mostly kept secret and used to make only the individual/organization that figured it out rich.  Releasing that stock picking advice to a large number of people would negate that advantage.

Can you explain how releasing stocking picking advice to a large number of people negates the advantage? I'm genuinely curious as to the logic you are using here.



Professionals who try and maybe sometimes succeed at gaining a market edge use supercomputers with hugely expensive fiber optic connections because the speed of computers and the limitations of freaking light speed are how they gain their edge. You aren’t getting that for $99
I am discussing value investing not day trading. Fibre optic connections are not necessary to value invest. If I am mistaken, again I am all ears.



If you are assigning 10% of your net worth to this and somehow you beat the market by 10% consistently (which would be amazing) you have increased your net worth by... wait for it .... 1%. It’s not really worth it unless you go half in or more to actually have an effect

1% is not to be sniffed at. And if it works it would be easy to put more of my net worth towards this strategy, increasing the return.



The fact that most people only do this with a small chunk of their account tells me deep down they know this is basically gambling. Which, you know, fine whatever but if I’m gambling (I don’t) Id want to do it near free booze, comped buffets, and strippers, not on a computer screen with a portion of my freedom.

Diversification is more likely the reason people do it with a small chunk of their account.

EvenSteven

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Re: Stock picking tip services
« Reply #5 on: July 21, 2020, 09:33:54 AM »
Those are over priced. I send out a stock picking news letter for half the price, and unlike those other ones, I guarantee that I will beat the SP500 price index. If I don't I will pay you the difference.

facepalm

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Re: Stock picking tip services
« Reply #6 on: July 21, 2020, 05:50:32 PM »

Motley Fool: https://www.fool.com/investing/motley-fool-stock-advisor-on-sale-for-99-a-year.aspx - Since the launch of the Stock Advisor program, the Fool’s stock picks have yielded returns of ~473%, whereas the S&P 500 yielded returns of ~100%.

My Wall St: https://mywallst.com/horizon -13x over the last 10 years vs S&P ~3x


Both of those returns sound too rosily optimistic. I'm betting they don't include the picks that went nowhere or lost money.

Also, there has been a ton of research done that suggests that active management does not outperform a broad based index (like the S&P). So those numbers are doubly fishy.

« Last Edit: July 21, 2020, 05:52:47 PM by facepalm »

Buffaloski Boris

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Re: Stock picking tip services
« Reply #7 on: July 21, 2020, 07:55:54 PM »
Here’s a free alternative: pick a company that does a good job of investing in your view. The ones that are of any size are required to release information regarding what they’re invested in to the SEC. The filing is called a 13f.  You can access those for free or use a service that aggregates the info. There are your tips. Naturally do your research and decide if those stocks/ holdings  make sense for you.

The_Big_H

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Re: Stock picking tip services
« Reply #8 on: July 21, 2020, 10:07:29 PM »

If someone or some organization were actually GOOD at stock picking do you think they would be selling it to retail investors for $99?  That’s a billion dollar skill!  It’s akin to sitting down to a poker table and the sharks are giving you advice.

The Motley fool likely sells thousands of subscriptions, they have a huge following. That's not a negligible amount of money. Why would they not do it? It doesn't hinder their strategy, in fact it helps it because they have a following that purchases the same stocks slightly delayed. Unless I am mistaken here, please feel free to correct me if I am wrong.

Are You serious?  Those are utter scams or wastes of times and money and it’s easy to figure out how:

No, any half decent stock market index beating advice/skill would be mostly kept secret and used to make only the individual/organization that figured it out rich.  Releasing that stock picking advice to a large number of people would negate that advantage.

Can you explain how releasing stocking picking advice to a large number of people negates the advantage? I'm genuinely curious as to the logic you are using here.



Professionals who try and maybe sometimes succeed at gaining a market edge use supercomputers with hugely expensive fiber optic connections because the speed of computers and the limitations of freaking light speed are how they gain their edge. You aren’t getting that for $99
I am discussing value investing not day trading. Fibre optic connections are not necessary to value invest. If I am mistaken, again I am all ears.



If you are assigning 10% of your net worth to this and somehow you beat the market by 10% consistently (which would be amazing) you have increased your net worth by... wait for it .... 1%. It’s not really worth it unless you go half in or more to actually have an effect

1% is not to be sniffed at. And if it works it would be easy to put more of my net worth towards this strategy, increasing the return.



The fact that most people only do this with a small chunk of their account tells me deep down they know this is basically gambling. Which, you know, fine whatever but if I’m gambling (I don’t) Id want to do it near free booze, comped buffets, and strippers, not on a computer screen with a portion of my freedom.

Diversification is more likely the reason people do it with a small chunk of their account.

Your sentence I bolded... Exactly how it could be a scam. How convenient to establish a way to ensure your stock positions will go up.  Go tell a bunch of other people to go buy having convinced them you are some sort of stock market sooth sayer.

 My point still stands though that long term market beating success is the type of skill that, if I possessed I would use to solely make myself warren buffet  rich And Not publish it for $99 a pop.  $1000 a decade and selling it to 10,000 people over a decade is what $10M... pocket change versus what one could make with true market beating skills. This strikes me as one of those “how to flip real estate seminars for $499” type things.  I would NOT go publishing my picks so as to keep some one from finding out my recipe for determining a good stock and they go and publish it for me and go running up the stock price faster before I get around to getting into it.

I also do not believe any of the cited numbers about their alleged ability to beat the market so well. Only if they actually published their entire stock pick history and exact methodology of calculating their theoretical return (amount bought for each recommendation, do you ever sell, dividends?). There are enough ways to fudge or massage or goose numbers here to make yourself look good “show your work”. That old adage “if it’s too good to be true”.   How nice of them to mention the stocks they pick that Blew up in price.  You know they can’t be perfect what dogs have they picked?

I question how setting aside 10-20% of one’s net worth and investing in individual stocks is somehow diversifying. That sounds like the exact opposite of diversifying versus staying 100% in broad market index funds  which holds all stocks so by holding a bunch more of a few stocks you are undiversifying



The supercomputer an fiber optic example I’m trying to point out the level of sophistication  professional traders and Wall Street types have to use to try and gain an edge on the market. From my perspective it is utter hubris for an amateur retail investor to think they are qualified to play the game. Short term or long term.





PaulMaxime

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Re: Stock picking tip services
« Reply #9 on: July 21, 2020, 10:13:15 PM »

Motley Fool: https://www.fool.com/investing/motley-fool-stock-advisor-on-sale-for-99-a-year.aspx - Since the launch of the Stock Advisor program, the Fool’s stock picks have yielded returns of ~473%, whereas the S&P 500 yielded returns of ~100%.

My Wall St: https://mywallst.com/horizon -13x over the last 10 years vs S&P ~3x


Both of those returns sound too rosily optimistic. I'm betting they don't include the picks that went nowhere or lost money.

Also, there has been a ton of research done that suggests that active management does not outperform a broad based index (like the S&P). So those numbers are doubly fishy.

Actually at least for the Motley Fool they track their performance over time and all their picks are available for all winners and losers since inception. They also don't front run any picks. Some of their services are portfolio services where they buy a portfolio of stocks and none of those buy until the've give members a chance.

As far as returns, there are lots of reasons why professional managers can't outperform way beyond just the investments they pick. 

This article by a former fund manager is instructive: https://www.nasdaq.com/articles/i-know-why-mutual-funds-fail-perform-2017-06-19

It's probably true that many subscribers to TMF services fail to perform as well as the TMF stock picks because of bad investing behavior and other reasons.

Personally I've done very well with their advice over the past 14 years. Personally I'm way above the market returns.

MustacheAndaHalf

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Re: Stock picking tip services
« Reply #10 on: July 22, 2020, 02:31:05 AM »
Motley Fool has been around for more than 20 years, so I don't think they are a scam.  They might be wrong, as they were years ago with "dogs of the dow", but after some embarassment (well, they do wear fool's caps), they kept going.  So I think they really are a stock picking service/newsletter, and that they have had some successes over time.  I haven't paid for their newsletter, but sometimes see their published articles.

I would divide their $99/year fee by the assets you plan to invest relying on their advice.  Someone investing $10,000 would be paying 1% of assets per year to get the newsletter.  The greater your assets for stock picking, the more reasonable the cost of the newsletter.  Also, you should be paying $0/trade to buy stock.  Vanguard, Schwab and Fidelity all offer stock purchase/sales for free.

js82

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Re: Stock picking tip services
« Reply #11 on: July 22, 2020, 05:02:18 AM »

Motley Fool: https://www.fool.com/investing/motley-fool-stock-advisor-on-sale-for-99-a-year.aspx - Since the launch of the Stock Advisor program, the Fool’s stock picks have yielded returns of ~473%, whereas the S&P 500 yielded returns of ~100%.

My Wall St: https://mywallst.com/horizon -13x over the last 10 years vs S&P ~3x


Both of those returns sound too rosily optimistic. I'm betting they don't include the picks that went nowhere or lost money.

Also, there has been a ton of research done that suggests that active management does not outperform a broad based index (like the S&P). So those numbers are doubly fishy.

I'd want to see the full list of component stocks that went into generating those returns to see whether it was general outperformance or the product of 1 or 2 fortunate picks of superstar stocks.

One of the general truths from investing in the style that the OP suggests, is that a small fraction of stocks will generate an overwhelmingly large fraction of your returns, while many of the others will underperform the market.  If you bought AMD(up 25x) or nVidia(20x) 5 years ago, or Netflix 8 years ago(60x) you'd be sitting pretty pretty now even if the rest of your portfolio did very little.

Kudos to the people that called it early with some of these stocks, but without seeing a full portfolio it's hard to assess whether they were generally successful at picking stocks or simply got lucky once or twice on picks that skyrocketed.

Quote
Actually at least for the Motley Fool they track their performance over time and all their picks are available for all winners and losers since inception. They also don't front run any picks. Some of their services are portfolio services where they buy a portfolio of stocks and none of those buy until the've give members a chance.

This is important, for the reasons listed above.  Transparency on how the service generated their purported returns lets one read up and decide for oneself.

PaulMaxime

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Re: Stock picking tip services
« Reply #12 on: July 22, 2020, 10:14:53 PM »

One of the general truths from investing in the style that the OP suggests, is that a small fraction of stocks will generate an overwhelmingly large fraction of your returns, while many of the others will underperform the market.  If you bought AMD(up 25x) or nVidia(20x) 5 years ago, or Netflix 8 years ago(60x) you'd be sitting pretty pretty now even if the rest of your portfolio did very little.

Kudos to the people that called it early with some of these stocks, but without seeing a full portfolio it's hard to assess whether they were generally successful at picking stocks or simply got lucky once or twice on picks that skyrocketed.


So as individual stock investors we fully expect to have a small number of positions make up the vast majority of our returns. This is why it's important to let your winners run and even to add more money to them over time. Don't "rebalance" too soon.

This has been my experience. A small percentage of my picks have generated the majority of my returns. I think that doesn't negate the performance at all. It's just how the markets work.

The interesting thing is that nobody expects to be right most of the time. You just need to move the needle a little and you can capture outsized returns.

So one thing that's cool is that TMF has a public stock picking "game" called CAPS. I have a page there:
https://caps.fool.com/player/dolonaltekar.aspx

If you want to explore that site more you'd need to create a free account.

Here are the CAPS pages for Tom and David Gardner the two founders. https://caps.fool.com/player/tmftomgardner.aspx https://caps.fool.com/player/tmfspiffypop.aspx

Now it looks like Tom hasn't updated his page for a long time but David is very active in his. Both of them have accuracy in the 60+% range so 60 percent of their picks have beaten the market. Tom without touching his for years.

"Accuracy" in this case is the percentage of stock picks that have beat the market. So I'm at about 48%. The stocks here mostly represent my portfolio, except the ones that I've thumbs downed (I don't short stocks) and it also doesn't reflect the fact that some companies like TSLA, AAPL, AMZN, MELI have more money invested and therefore over contribute to my returns. Oh and I've held AAPL since 1999 and I only added it to CAPS in 2011 so I don't get credit for all of the returns. You can't backdate.


Kem

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Re: Stock picking tip services
« Reply #13 on: July 23, 2020, 10:05:48 AM »
Good friend of mine, stood up in my wedding as best man and I in his, began stock picking as his primary investment using the Fool’s service starting around 2005.  He places 20% of every paycheck into this and does not pull money out of the taxable brokerage.  As an engineer, he began at a salary of around 70K and that has gone linear to just shy of 120K over the last 15 years.  At these levels he can only snag maybe 20-30% of the suggested picks. 

I began investing some monthly chump change in 2007 (just up to 401k match of 3%), but did not begin in earnest until 2012 into S&P 500 and later VTI.  My salary has not been as consistent or as high as his. My 8 years of overall significant contributions are but a fraction of what he has put in over 15 years.   

How do I know this?  Last fall I stepped back from working for a nearly 4 month reset.  He, being a lifetime frugal gent, asked how I could do such a thing knowing I had not made as much as him and spent many years previously living a much more expensive lifestyle, so we sat down over a few evenings and compiled years’ worth of statements.

My investment account value is higher than his own.

Dig into the Fool and you’ll see that they cherry pick return metrics.  Sure, 1-2 of the picks have outperformance.  But the other 19-20 have flattened, fizzled, or dissipated.

Like Jim Cramer or Tim Sykes (or thousands of others), they can spin their material to sound sound and it is entertaining indeed.  Some of the advise may at times even skirt on sage.   

I for one will pull out some toasty nuts, have a good laugh at the flung snake oil, and enjoy my Coast to FI following the advise of Boogle & Collins.


5% of my cash contributions do go into a gambling pool for a few stocks THAT I PICK in a tax sheltered account (I've had up to 10, currently I have 2).  This is my only expensive lifestyle entertainment.  If these single names fizzle, then no harm.  If they do well then I remove half the gains at certain trigger points and these gains go into VTI for good.
« Last Edit: July 23, 2020, 10:09:08 AM by Kem »

J Boogie

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Re: Stock picking tip services
« Reply #14 on: July 23, 2020, 01:04:40 PM »
Those are over priced. I send out a stock picking news letter for half the price, and unlike those other ones, I guarantee that I will beat the SP500 price index. If I don't I will pay you the difference.

Given the liability of your guarantee, what is your max AUM? Or, rather, assets under recommendation.

Not that I'm a high NW individual, but I'm just curious as I imagine this guarantee could potentially be very expensive for you.


The_Big_H

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Re: Stock picking tip services
« Reply #15 on: July 23, 2020, 07:52:33 PM »
Motley Fool has been around for more than 20 years, so I don't think they are a scam.  They might be wrong, as they were years ago with "dogs of the dow", but after some embarassment (well, they do wear fool's caps), they kept going.  So I think they really are a stock picking service/newsletter, and that they have had some successes over time.  I haven't paid for their newsletter, but sometimes see their published articles.

I would divide their $99/year fee by the assets you plan to invest relying on their advice.  Someone investing $10,000 would be paying 1% of assets per year to get the newsletter.  The greater your assets for stock picking, the more reasonable the cost of the newsletter.  Also, you should be paying $0/trade to buy stock.  Vanguard, Schwab and Fidelity all offer stock purchase/sales for free.

20 years?  Madoff was around longer. And that dude who always predicts a stock market crash every year he’s been around for 20 years too.  They’ve just managed to find enough bait to keep fishing for 20 years. 

By the way. Why is it that virtually every FIRE website or blog author discusses mostly using index funds, notice none of them mention using a stock picking newsletter as a strategy.

EvenSteven

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Re: Stock picking tip services
« Reply #16 on: July 23, 2020, 07:57:46 PM »
Those are over priced. I send out a stock picking news letter for half the price, and unlike those other ones, I guarantee that I will beat the SP500 price index. If I don't I will pay you the difference.

Given the liability of your guarantee, what is your max AUM? Or, rather, assets under recommendation.

Not that I'm a high NW individual, but I'm just curious as I imagine this guarantee could potentially be very expensive for you.

No limits for AUM. I have automated my service. I start out with the analysis section, where my algorithm takes three random headlines from yahoo! finance. Then comes the recommendation section where it says "buy a low cost SP500 index fund."

Poof, my recommendations are guaranteed beat the SP500 price index by ~2% per year, I get $50 per month per subscriber, and the subscriber is probably better off than trying to pick stocks based on stock picking emails! Wins all around.

J Boogie

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Re: Stock picking tip services
« Reply #17 on: July 24, 2020, 09:55:47 AM »
Those are over priced. I send out a stock picking news letter for half the price, and unlike those other ones, I guarantee that I will beat the SP500 price index. If I don't I will pay you the difference.

Given the liability of your guarantee, what is your max AUM? Or, rather, assets under recommendation.

Not that I'm a high NW individual, but I'm just curious as I imagine this guarantee could potentially be very expensive for you.

No limits for AUM. I have automated my service. I start out with the analysis section, where my algorithm takes three random headlines from yahoo! finance. Then comes the recommendation section where it says "buy a low cost SP500 index fund."

Poof, my recommendations are guaranteed beat the SP500 price index by ~2% per year, I get $50 per month per subscriber, and the subscriber is probably better off than trying to pick stocks based on stock picking emails! Wins all around.

It sounds like you're joking, or I don't understand where the 2% alpha comes from.

I also don't understand how anyone would continue subscribing after seeing the recommendation the second time.

EvenSteven

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Re: Stock picking tip services
« Reply #18 on: July 24, 2020, 10:37:20 AM »
I was making a joke about how there are many different ways that the stock picking and active management industry are dishonest, and report their stock picking results dishonestly.

Notice I mentioned that I will beat the SP500 price index, not the SP500 index. The price index does not include dividends, so by investing in a regular SP500 index fund you will beat the price index by the amount equal to the dividend.

J Boogie

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Re: Stock picking tip services
« Reply #19 on: July 24, 2020, 12:36:34 PM »
I was making a joke about how there are many different ways that the stock picking and active management industry are dishonest, and report their stock picking results dishonestly.

Notice I mentioned that I will beat the SP500 price index, not the SP500 index. The price index does not include dividends, so by investing in a regular SP500 index fund you will beat the price index by the amount equal to the dividend.

Roger that. Whoooooosh, that one flew over my head. Not a bad joke but I totally thought you had a newsletter after your first post lol.

EvenSteven

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Re: Stock picking tip services
« Reply #20 on: July 24, 2020, 01:06:30 PM »
I was making a joke about how there are many different ways that the stock picking and active management industry are dishonest, and report their stock picking results dishonestly.

Notice I mentioned that I will beat the SP500 price index, not the SP500 index. The price index does not include dividends, so by investing in a regular SP500 index fund you will beat the price index by the amount equal to the dividend.

Roger that. Whoooooosh, that one flew over my head. Not a bad joke but I totally thought you had a newsletter after your first post lol.

My real life delivery is extremely dry, and text on the internet only exacerbates it.

MustacheAndaHalf

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Re: Stock picking tip services
« Reply #21 on: July 25, 2020, 10:25:05 AM »
Motley Fool has been around for more than 20 years, so I don't think they are a scam.  They might be wrong, as they were years ago with "dogs of the dow", but after some embarassment (well, they do wear fool's caps), they kept going.  So I think they really are a stock picking service/newsletter, and that they have had some successes over time.  I haven't paid for their newsletter, but sometimes see their published articles.

I would divide their $99/year fee by the assets you plan to invest relying on their advice.  Someone investing $10,000 would be paying 1% of assets per year to get the newsletter.  The greater your assets for stock picking, the more reasonable the cost of the newsletter.  Also, you should be paying $0/trade to buy stock.  Vanguard, Schwab and Fidelity all offer stock purchase/sales for free.

20 years?  Madoff was around longer. And that dude who always predicts a stock market crash every year he’s been around for 20 years too.  They’ve just managed to find enough bait to keep fishing for 20 years. 

By the way. Why is it that virtually every FIRE website or blog author discusses mostly using index funds, notice none of them mention using a stock picking newsletter as a strategy.
Agree with mostly using index funds.  The OP said "setting aside a portion of my net worth".

I mentioned 20 years because most scams don't last very long, but your comparison has a flaw: "where is your money?"

With Madoff, his company took all of your money, and Madoff told nobody how he invested it.
A stock picking newsletter like Motley Fool's tells you which stocks to buy, but doesn't touch your money.  You have to buy the stock yourself, on your own.

lemonlyman

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Re: Stock picking tip services
« Reply #22 on: July 27, 2020, 09:11:59 AM »
By the way. Why is it that virtually every FIRE website or blog author discusses mostly using index funds, notice none of them mention using a stock picking newsletter as a strategy.

Either it's generally good advice or they aren't aware there's a Motley Fool affiliate program.

PaulMaxime

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Re: Stock picking tip services
« Reply #23 on: July 27, 2020, 01:37:32 PM »
By the way. Why is it that virtually every FIRE website or blog author discusses mostly using index funds, notice none of them mention using a stock picking newsletter as a strategy.

Either it's generally good advice or they aren't aware there's a Motley Fool affiliate program.

I think for most people who don't have any interest in investing and aren't interested in turning it into a hobby, indexing is way better than the alternatives of paying a broker or advisor a percentage of your assets to place you in underperforming mutual funds. Places like Edward Jones come to mind. You are going to outperform the vast number of these folks with literally no work on your part. Pretty good deal.

Personally all this business and investing is fun for me and I'm really interested in learning how things work and spending more of my time on it. I probably have a higher risk tolerance than most, so I'm willing to spend time and money learning and take a chance that I can do better than that. So far it's worked out for me really well.

There are some friends of mine who know I'm into investing and for most of them I tell them to set up a portfolio of index funds (usually VTI and BND or something equivalent in whatever asset allocation makes them comfortable), add to them regularly and rebalance annually. Rarely I'll even broach the topic of individual stocks because it's a different type of thing.

I firmly believe that with interest and good advice and the right mentality an individual investor can beat the market. We actually have a lot of advantages over those "highly paid" professionals out there. I've linked to articles and discussed this before in other posts. But you have to be willing to do the work and you are definitely taking a chance that you will not perform as you hope.

The_Big_H

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Re: Stock picking tip services
« Reply #24 on: July 27, 2020, 10:09:22 PM »
Motley Fool has been around for more than 20 years, so I don't think they are a scam.  They might be wrong, as they were years ago with "dogs of the dow", but after some embarassment (well, they do wear fool's caps), they kept going.  So I think they really are a stock picking service/newsletter, and that they have had some successes over time.  I haven't paid for their newsletter, but sometimes see their published articles.

I would divide their $99/year fee by the assets you plan to invest relying on their advice.  Someone investing $10,000 would be paying 1% of assets per year to get the newsletter.  The greater your assets for stock picking, the more reasonable the cost of the newsletter.  Also, you should be paying $0/trade to buy stock.  Vanguard, Schwab and Fidelity all offer stock purchase/sales for free.

20 years?  Madoff was around longer. And that dude who always predicts a stock market crash every year he’s been around for 20 years too.  They’ve just managed to find enough bait to keep fishing for 20 years. 

By the way. Why is it that virtually every FIRE website or blog author discusses mostly using index funds, notice none of them mention using a stock picking newsletter as a strategy.
Agree with mostly using index funds.  The OP said "setting aside a portion of my net worth".

I mentioned 20 years because most scams don't last very long, but your comparison has a flaw: "where is your money?"

With Madoff, his company took all of your money, and Madoff told nobody how he invested it.
A stock picking newsletter like Motley Fool's tells you which stocks to buy, but doesn't touch your money.  You have to buy the stock yourself, on your own.


The issue I still see with "a portion of my net worth" is if you really believe in yourself and your ability to beat the market, why only do it for 10% of your portfolio?  You get to final jeopardy and you are confident you know the category so you bet 10% your money??   Because to have a prayer of "beating" the market you need to read/research/follow/track FULL time or more (the professionals do this).  You need to read every quarterly report and know the CEO's name and history, and know how every competitor is doing too.   I don't get why one would put that level of time in for only peanuts versus you know just making money at a job in which you ARE ALREADY an expert and just investing that in index funds... a lot less stress. 

Isn't the whole point of being and becoming FIRE with mustachian mentality to lead a simple life and not spend endless hours chasing a buck (either through working 30 years or spending hundreds of hours researching companies), rather set and forget?

PaulMaxime

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Re: Stock picking tip services
« Reply #25 on: July 27, 2020, 11:56:49 PM »

The issue I still see with "a portion of my net worth" is if you really believe in yourself and your ability to beat the market, why only do it for 10% of your portfolio?  You get to final jeopardy and you are confident you know the category so you bet 10% your money??   Because to have a prayer of "beating" the market you need to read/research/follow/track FULL time or more (the professionals do this).  You need to read every quarterly report and know the CEO's name and history, and know how every competitor is doing too.   I don't get why one would put that level of time in for only peanuts versus you know just making money at a job in which you ARE ALREADY an expert and just investing that in index funds... a lot less stress. 

Isn't the whole point of being and becoming FIRE with mustachian mentality to lead a simple life and not spend endless hours chasing a buck (either through working 30 years or spending hundreds of hours researching companies), rather set and forget?

I think Fire can be whatever you want it to be. I never thought that MMM was opposed to spending effort where it paid off. Strenuous life and all that.

I can get behind trying with a portion and seeing how things go. That's the path that I took but now I'm almost totally individual equities

I have beaten the market quite handily on average over the past 14 years (21+% per year) and I don't do it full time. You really have a misguided idea of what investing outside index funds is like.

If you are a buy and hold investor you do need to keep track of what your companies are doing - checking annual reports and such, listening to a couple conference calls. Some investments I rarely check in on - these are the ones that are solid and have performed for years like Apple and MasterCard. Others need more attention like Tesla, and Zoom. I'm not looking to trade these every minute. I've held most of my investments for years and plan on holding them generally forever if possible. Sometimes I sell something and buy something else but it's not that often.

It's interesting. And Fun. But sure it can be a lot of effort. That's why I offload a lot of the research by paying someone to help me with it. Works great. You can also find good forums where people analyze companies together and share the work. Works great too. My wife invests by following one of the Motley Fool portfolio services. She's been beating the market handily and she almost never even looks at her account except when they issue a new buy alert (quarterly I think)

The_Big_H

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Re: Stock picking tip services
« Reply #26 on: July 30, 2020, 01:07:12 AM »

The issue I still see with "a portion of my net worth" is if you really believe in yourself and your ability to beat the market, why only do it for 10% of your portfolio?  You get to final jeopardy and you are confident you know the category so you bet 10% your money??   Because to have a prayer of "beating" the market you need to read/research/follow/track FULL time or more (the professionals do this).  You need to read every quarterly report and know the CEO's name and history, and know how every competitor is doing too.   I don't get why one would put that level of time in for only peanuts versus you know just making money at a job in which you ARE ALREADY an expert and just investing that in index funds... a lot less stress. 

Isn't the whole point of being and becoming FIRE with mustachian mentality to lead a simple life and not spend endless hours chasing a buck (either through working 30 years or spending hundreds of hours researching companies), rather set and forget?

I think Fire can be whatever you want it to be. I never thought that MMM was opposed to spending effort where it paid off. Strenuous life and all that.

I can get behind trying with a portion and seeing how things go. That's the path that I took but now I'm almost totally individual equities

I have beaten the market quite handily on average over the past 14 years (21+% per year) and I don't do it full time. You really have a misguided idea of what investing outside index funds is like.

If you are a buy and hold investor you do need to keep track of what your companies are doing - checking annual reports and such, listening to a couple conference calls. Some investments I rarely check in on - these are the ones that are solid and have performed for years like Apple and MasterCard. Others need more attention like Tesla, and Zoom. I'm not looking to trade these every minute. I've held most of my investments for years and plan on holding them generally forever if possible. Sometimes I sell something and buy something else but it's not that often.

It's interesting. And Fun. But sure it can be a lot of effort. That's why I offload a lot of the research by paying someone to help me with it. Works great. You can also find good forums where people analyze companies together and share the work. Works great too. My wife invests by following one of the Motley Fool portfolio services. She's been beating the market handily and she almost never even looks at her account except when they issue a new buy alert (quarterly I think)

I don’t intend to be mean about this...
But I straight up don’t believe your claimed return figure.  Not trying to imply dishonesty but I know enough about math to know that return figures are very easily manipulated just based on how they are calculated (geometric mean, IRR, turns out it’s not easy to calculate such a simple number when you got money coming in and dividends paid and stuff bought and sold all at irregular times in the account).  You cannot just compare one “rate of return” number to the other that be like saying something is “5 long”.  Five what?  Feet, meters?

IMO the only way to truly measure one’s performance is to setup an excel which maps out every time New Money entered into your brokerage account and the exact date it did so (from your brokerage records).  You then load the closing price in excel of VFIAX for each day of the range you are looking at and map how many shares you could have purchased had your, on each of those “New Money” days, just bought VFIAX. You also use calculate the increase in shares each quarter from dividends thrown off. This is to capture reinvestment of dividends. If you have “pull money out” days  at any time from the account assume it’s like you at selling VFIAX at the price that day.

You do all that and at the end you’ll have how many shares of VFIAX you could have had times the current price of VFIAX and compare that to your brokerage account balance (you could plot a month by month tracking of both to see performance over time)

Extra credit if one turned a profit compared to the VFIAX baseline and divide the difference by the number of hours spent having to research and pick stocks to get an effective $wage

On its surface That kind of ability (3 fold performance over the s&p) you should be a billionaire hedge fund manager being up 21% a year. Have you been actively investing for exactly 14 years by the way?


waltworks

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Re: Stock picking tip services
« Reply #27 on: July 30, 2020, 07:46:21 AM »
Yeah, at 21% a year, you'd have something like 14 times your initial investment, assuming no new money added. Okay.

It's obviously mathematically *possible*, but unfortunately for Paul, the internet is full of people making outrageous claims like that. At least he's not trying to sell a newsletter, I suppose?

Paul, if you want full credit, start tracking your trades/performance now, in real time (ie, tell us what you have, what you buy, what you sell) and in 5-10 years you're still winning, I'll freely admit you have an amazing gift. In the meantime, I'll keep calling out what I feel are unlikely (to put it mildly) claims of stock picking brilliance so newbs don't lose all their money trading.

-W

MustacheAndaHalf

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Re: Stock picking tip services
« Reply #28 on: July 30, 2020, 08:26:41 AM »
Just to combine the thread's earlier topic with the more recent discussion, Motley Fool has an interview where tracking performance is the theme.
https://www.fool.com/investing/2019/05/08/whats-the-best-way-to-track-stock-returns.aspx

I recall Vanguard has a Portfolio Watch tool that lets you exclude cash added to the portfolio, so you can see the purely investment based performance.

PaulMaxime

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Re: Stock picking tip services
« Reply #29 on: July 30, 2020, 09:39:40 AM »

I don’t intend to be mean about this...
But I straight up don’t believe your claimed return figure.  Not trying to imply dishonesty but I know enough about math to know that return figures are very easily manipulated just based on how they are calculated (geometric mean, IRR, turns out it’s not easy to calculate such a simple number when you got money coming in and dividends paid and stuff bought and sold all at irregular times in the account).  You cannot just compare one “rate of return” number to the other that be like saying something is “5 long”.  Five what?  Feet, meters?

On its surface That kind of ability (3 fold performance over the s&p) you should be a billionaire hedge fund manager being up 21% a year. Have you been actively investing for exactly 14 years by the way?

So it's not my personal genius. It's a bit of experience and good investing behavior on my part but also me following advice from my Motley Fool subscription. I'm not a genius stock picker. There's certainly an element of luck involved as well.

So I use Time Weighted Return to come up with that number. TWR ignores cash flows which makes it a better way to compute performance for comparing two different investments. To be clear I've put a lot of money into the market in recent years because of cash from my private company - large bonuses in 2015 and tender offers for private shares in 2017 and 2018 so that money hasn't had 14 years to grow.

The reason it's 14 years is because when I decided to set up this tracking spreadsheet (i use Numbers on my Mac) that was as far back as my brokerage statements go.

Besides TWR I also use a cash flow method - as I add money to the account(s) I also assume that I buy shares in SPY in equal amounts and compare the balances for both methods. I have 6 different accounts (2 taxable brokerage, IRA, Roth IRA, Inherited IRA, 401K) included in this spreadsheet and all tracked separately and together.

So, I've previously posted the link to my Motley Fool CAPS which is a game that allows you to pick stocks and be compared to the market and other players. It's imperfect since it doesn't allow position sizes but it's a view into my portfolio. I can't backdate it. Also I bought many of these stocks long before I signed up for CAPS so my score (like on AAPL which I've held since 1999) won't be fully correct.

I've attached my TWR returns from my spreadsheet compared to the S&P 500 Total Return index (which includes dividends). This year has been especially good for my portfolio, I'm up 54% this year alone (compared to 0.71% for the S&P 500 TR) so without this year it would be a bit lower than 21%.
« Last Edit: July 30, 2020, 10:17:14 AM by PaulMaxime »

PaulMaxime

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Re: Stock picking tip services
« Reply #30 on: July 30, 2020, 09:51:23 AM »
Yeah, at 21% a year, you'd have something like 14 times your initial investment, assuming no new money added. Okay.

It's obviously mathematically *possible*, but unfortunately for Paul, the internet is full of people making outrageous claims like that. At least he's not trying to sell a newsletter, I suppose?

Paul, if you want full credit, start tracking your trades/performance now, in real time (ie, tell us what you have, what you buy, what you sell) and in 5-10 years you're still winning, I'll freely admit you have an amazing gift. In the meantime, I'll keep calling out what I feel are unlikely (to put it mildly) claims of stock picking brilliance so newbs don't lose all their money trading.

-W

Not going to happen but if you look upthread there's a link to my CAPS page which basically tracks my portfolio with a few caveats: I don't short stocks, CAPS doesn't have positions sizes, and many of my positions are older than what's there.

The_Big_H

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Re: Stock picking tip services
« Reply #31 on: July 30, 2020, 11:51:28 AM »
It’s just a little too convenient that your data only tracks 14 years yet you have been investing for over 20. To truly say you have “reliably and predictably” beat the market it needs to be from day 1 and be ALL investments. Because if you are making a true 21% a year with many of those years its only a fraction of your overall portfolio it’s not that much better than an index fund.

I’ll stand behind that I really think the only way to truly objectively assess if your overall performance has beat the “just index it” strategy is a spread sheet as I described above, it’s much more exact because you can run a very precise “scenario A” (what you did) vs “scenario B” (if I had just bought VFIAX)

By the way another fact hidden here is that active traders tend to hold their money in MM/cash waiting for “the next pick”. Versus the indexer is set and forget every paycheck buy VFIAX. That wouldn’t even be caught in my spreadsheet.

You are telling us that you both did not invest evenly Over this time period AND you are using a method that cancels out how the money entered over time.  So it’s basocally a theoretical number and not a reflection on if the money sitting in your accounts now would truly be several times larger than had you blindly done VFIAX.

I understand why you would not want to share that kind of data to a stranger on the internet. 
If I came across some free time and a decade or two of history of those fool stock buy alerts I might be tempted to setup a comparison excel.

Certainly if I was going to commit to buying this newsletter and actually stick to buying only the picks it suggests when they suggest them then I Would highly advise doing that spreadsheet. 

In much the same way i would only believe a gambler if they had a spreadsheet like this that actually showed wins since day 1 I will never believe an active stock investor unless that type of rigorous analysis was done.

If you put hundreds of hours into active stock investing you owe it to yourself to put in the 10 hours to really rigorously prove you are ahead of a “passice VFIAX buyer” and the back out how much you are ahead along with an estimation of hours spent (to see the cost per hour your time)
« Last Edit: July 30, 2020, 11:59:17 AM by The_Big_H »

PaulMaxime

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Re: Stock picking tip services
« Reply #32 on: July 30, 2020, 01:35:28 PM »
It’s just a little too convenient that your data only tracks 14 years yet you have been investing for over 20. To truly say you have “reliably and predictably” beat the market it needs to be from day 1 and be ALL investments. Because if you are making a true 21% a year with many of those years its only a fraction of your overall portfolio it’s not that much better than an index fund.

I’ll stand behind that I really think the only way to truly objectively assess if your overall performance has beat the “just index it” strategy is a spread sheet as I described above, it’s much more exact because you can run a very precise “scenario A” (what you did) vs “scenario B” (if I had just bought VFIAX)

By the way another fact hidden here is that active traders tend to hold their money in MM/cash waiting for “the next pick”. Versus the indexer is set and forget every paycheck buy VFIAX. That wouldn’t even be caught in my spreadsheet.

You are telling us that you both did not invest evenly Over this time period AND you are using a method that cancels out how the money entered over time.  So it’s basocally a theoretical number and not a reflection on if the money sitting in your accounts now would truly be several times larger than had you blindly done VFIAX.

I understand why you would not want to share that kind of data to a stranger on the internet. 
If I came across some free time and a decade or two of history of those fool stock buy alerts I might be tempted to setup a comparison excel.

Certainly if I was going to commit to buying this newsletter and actually stick to buying only the picks it suggests when they suggest them then I Would highly advise doing that spreadsheet. 

In much the same way i would only believe a gambler if they had a spreadsheet like this that actually showed wins since day 1 I will never believe an active stock investor unless that type of rigorous analysis was done.

If you put hundreds of hours into active stock investing you owe it to yourself to put in the 10 hours to really rigorously prove you are ahead of a “passice VFIAX buyer” and the back out how much you are ahead along with an estimation of hours spent (to see the cost per hour your time)

Apparently you haven't heard of Time Weighted return. It's the standard for how to compare two investments while removing cash flow as a consideration. https://en.wikipedia.org/wiki/Time-weighted_return

This isn't that complicated. If I have two portfolios and one returns a constant X% and one returns Y% and I add the same amount of money each year into both the dollars invested at the end of the time period will have less time to grow than the earlier dollars. I've attached a spreadsheet below that shows what the difference in value between 10 and 21% per year is with the same dollar investment in each per year. in this case at the end of 14 years the difference is 30K vs 77K. Of course returns and invested dollars are not constant and so end values will be different. In my case I end up with 2.2x the cash in my portfolio as opposed to 2.5x in the example because more of my additions are towards the end.

Sorry that I don't have more data than that. The 21% is for the past 14 years because I started my spreadsheet several years ago and my brokerage account statements only went back to 2007.

And I do track my performance against an equal investment in SPY. That's what the right side column represents in that spreadsheet I posted. I know for a fact that I've substantially beaten the market because I've simulated exactly the situation you describe. 54% this year vs less than 1% for SPY. That's not cash flow.

And this is 100% of my publicly traded investment portfolio. I do have a small private equity investment and my private company's stock which doesn't count here. My 401K is in index funds and it's the laggard of the group by far.

waltworks

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Re: Stock picking tip services
« Reply #33 on: July 30, 2020, 01:46:10 PM »
Bro, the well has been poisoned by your wild-claims predecessors. Nobody will believe you unless you start tracking trades in real time and do it for a period of many years.

Sorry.

-W

PaulMaxime

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Re: Stock picking tip services
« Reply #34 on: July 30, 2020, 01:57:05 PM »
Bro, the well has been poisoned by your wild-claims predecessors. Nobody will believe you unless you start tracking trades in real time and do it for a period of many years.

Sorry.

-W

Don't care, sorry. It is what it is. I'm just saying that the OP should try it. Waiting years for me to "prove it" is not productive for anyone. You can look at my CAPS page previously linked to see stock picking performance over time.

waltworks

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Re: Stock picking tip services
« Reply #35 on: July 30, 2020, 02:31:31 PM »
And that, plus $5, will buy you a coffee.

OP, don't do it.

-W

PaulMaxime

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Re: Stock picking tip services
« Reply #36 on: July 30, 2020, 11:10:25 PM »
Bro, the well has been poisoned by your wild-claims predecessors. Nobody will believe you unless you start tracking trades in real time and do it for a period of many years.

Sorry.

-W

Don't care, sorry. It is what it is. I'm just saying that the OP should try it. Waiting years for me to "prove it" is not productive for anyone. You can look at my CAPS page previously linked to see stock picking performance over time.

I suspect that no matter what I came up with - a list of all transactions in my account since I started investing and all my balances you'd find some other reason to downplay my results.

I'm a lucky person, i get that. But why not try to do better with something. It seems to me that MMM is all about optimization. I've been able to do better than the indexes over many years and think others can too. What's the harm in them trying to be better?

If it doesn't work out they can always go back to indexing. For most people that's probably the right answer anyway but I'm not satisfied with just getting a "C" on my exam or just doing average.

It hasn't taken me that much effort to make this happen. Others can benefit.

Is there ANYTHING I could have said that would have made you change your mind? I don't think so.

MustacheAndaHalf

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Re: Stock picking tip services
« Reply #37 on: July 31, 2020, 12:43:45 AM »
I've attached my TWR returns from my spreadsheet compared to the S&P 500 Total Return index (which includes dividends). This year has been especially good for my portfolio, I'm up 54% this year alone (compared to 0.71% for the S&P 500 TR) so without this year it would be a bit lower than 21%.
Thanks for posting your track record.  It's interesting and detailed, which I rarely see posted.  I'd say it's more likely you're telling the truth than trying to brag, but that's just my view.

Normally I'd expect a higher risk approach could beat the market some of the time, but then post dramatic losses at a critical time.  So that's why your 2008 performance interests me - you only gave up -5.7% performance against the stock market.  So I'm curious about how you beat the market by a wide margin in 2007 and 2009, but didn't give up much ground in the worst year in decades.


Nobody will believe you unless you start tracking trades in real time and do it for a period of many years.
You don't represent everyone.  Claiming "nobody will believe you" speaks for people you don't represent.

And I'd like to point out something interesting: most people who passively index do not post their returns!  Except for a few threads I've created, I haven't seen trades tracked as they are made.  So really, even passive indexers haven't proven their point by this criteria.  For example, have you posted your trades in real time?

waltworks

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Re: Stock picking tip services
« Reply #38 on: July 31, 2020, 01:51:44 AM »
Not at all, as I said, if you post, right now, what your holdings are, and then you follow up in real time with what you sell/buy, we can all track exactly what happens. I'd be happy to believe that. 

The thing is, you're making *outrageous* claims. Like, best performance sustained over significant time I've ever heard of outside of people who got a few shares of one stock that went to the moon and weren't following any particular strategy or even paying attention (we'd all agree those people just got lucky, right?)

You're claiming to be a Lebron-James-of-investing sort of person, in an anonymous forum with zero actual evidence. Worse, you're advocating that inexperienced novices try their hand at this, when we have voluminous evidence that's a bad idea over large sample sizes.

-W

habanero

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Re: Stock picking tip services
« Reply #39 on: July 31, 2020, 04:18:32 AM »
I read a story in the local business press this year about a private investor who for a full year had traded on all the recommendations from a specific brokerage house on the same day as the recommendation came out to buy or sell. Domestic equties only. Pretty small portfolio, like a handful at names they hold at any given time, no shorting, derivatives or anything funky. I don't remember the exact figures, but the point was that his returns were WAY lower, like 15-20% or so lower) than the brokerage house's own claim as to what their portfolio had returned over the year.

The main explanations given were transaction costs (trade fees very low, but bid/offer can be a bit in illiquid stocks) and the claim that the brokerage house cherrypicks the prices at which they enter and exit trades which can mage a significant difference on days with volatility.

lemonlyman

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Re: Stock picking tip services
« Reply #40 on: July 31, 2020, 09:09:32 AM »
PaulMaxime has been consistent in what he's said since coming onto the forum. Just go read his post history. For 5 years, he's consistently mentioned Motley Fool and several outperforming long term holdings (including, credibly, Apple which is worth 3x compared to 5 years ago.). I think it's unlikely he's lied consistently for the past 5 years. Nothing to gain with forum anonymity other than sharing experience and opinion, which everyone here does.

waltworks, and many pseudo-investing experts here, believe beating the index is impossible. Likewise, many "financial experts" have also said early retirement was impossible. The truth is there is no one way to accumulate capital. You can find undervalued assets or assets with exceptional potential in stocks, real estate, entrepreneurship, etc. with knowledge, skill, experience, vision, and yes, a little luck. Indexing is a perfectly legitimate strategy to accumulate capital, but it's bizarre to believe it's the highest performing way. Weird how there's so many people who've experienced the impossible...
« Last Edit: July 31, 2020, 09:16:10 AM by lemonlyman »

PaulMaxime

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Re: Stock picking tip services
« Reply #41 on: July 31, 2020, 09:38:03 AM »
PaulMaxime has been consistent in what he's said since coming onto the forum. Just go read his post history. For 5 years, he's consistently mentioned Motley Fool and several outperforming long term holdings (including, credibly, Apple which is worth 3x compared to 5 years ago.). I think it's unlikely he's lied consistently for the past 5 years. Nothing to gain with forum anonymity other than sharing experience and opinion, which everyone here does.

waltworks, and many pseudo-investing experts here, believe beating the index is impossible. Likewise, many "financial experts" have also said early retirement was impossible. The truth is there is no one way to accumulate capital. You can find undervalued assets or assets with exceptional potential in stocks, real estate, entrepreneurship, etc. with knowledge, skill, experience, vision, and yes, a little luck. Indexing is a perfectly legitimate strategy to accumulate capital, but it's bizarre to believe it's the highest performing way. Weird how there's so many people who've experienced the impossible...

Thanks for this. I just went back and looked over my post history because I was curious what I've been saying. Indeed many of the same messages I posted back in 2015 would apply to this thread.

Just trying to help. I'm opposed to dogmatic thinking wherever I find it. Even my own. Strong opinions, held loosely.

Like I say in my forum signature: "When my information changes, I alter my conclusions. What do you do, sir?" - John Maynard Keynes


The_Big_H

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Re: Stock picking tip services
« Reply #42 on: July 31, 2020, 11:04:28 AM »
Bro, the well has been poisoned by your wild-claims predecessors. Nobody will believe you unless you start tracking trades in real time and do it for a period of many years.

Sorry.

-W

Don't care, sorry. It is what it is. I'm just saying that the OP should try it. Waiting years for me to "prove it" is not productive for anyone. You can look at my CAPS page previously linked to see stock picking performance over time.

I suspect that no matter what I came up with - a list of all transactions in my account since I started investing and all my balances you'd find some other reason to downplay my results.

I'm a lucky person, i get that. But why not try to do better with something. It seems to me that MMM is all about optimization. I've been able to do better than the indexes over many years and think others can too. What's the harm in them trying to be better?

If it doesn't work out they can always go back to indexing. For most people that's probably the right answer anyway but I'm not satisfied with just getting a "C" on my exam or just doing average.

It hasn't taken me that much effort to make this happen. Others can benefit.

Is there ANYTHING I could have said that would have made you change your mind? I don't think so.

My mind would be changed that yes you are a great investor if there was sufficient data rigorously showing such (death by excel, your billion dollar hedge fund). But 14 years there is still an outside chance you could have been just lucky this whole time.  30-60 years would really solidify this. Yes that is kind of an outrageous period of time but that is the point of indexing is it should work for a lifetime. The trouble with your approach is you do have a much larger risk of real failure / major portfolio damage in year 15-30.  The indexer is far less likely to lose his shirt if they index properly.

I don’t agree with your characterization of proper indexing as a “C” or average.
Getting 7% inflation adjusted return from a life time of indexing is absolutely an “A” compared to the average American investor... Mostly because people struggle to index properly or fancy themselves a “sophisticated investor” (ie same reason why condoms are 99% effective if used properly, but 60-70% in practice because people suck at “properly”)

theoverlook

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Re: Stock picking tip services
« Reply #43 on: August 03, 2020, 10:00:16 AM »
Paul specifically said he uses the Motley Fool stock picking service. He has not claimed any genius, just followed publicly available (for a fee) advice. Picking on his methodology or claiming he's making it up seem farcical when the motley fool picks are public.

PaulMaxime

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Re: Stock picking tip services
« Reply #44 on: August 03, 2020, 04:43:34 PM »
Paul specifically said he uses the Motley Fool stock picking service. He has not claimed any genius, just followed publicly available (for a fee) advice. Picking on his methodology or claiming he's making it up seem farcical when the motley fool picks are public.

I've posted a lot of info here which backs up my "claims". I don't really understand why my integrity is being questioned. I'm merely stating a fact about my personal experience with using a service and investing outside of what is the norm here in MMM world. There are others on here who don't just do indexing - lots of threads about Options or investing in this or that stock.

Will everyone who takes my "advice" have exactly the same results as I do? No way. It's an individual road that you will be traveling at this point. Could you do worse or better than me. You probably will do one of those. Will you beat indexing? It's highly possible considering I'm no special genius.

One more thing: All of us on this forum have probably gotten crap from people about FIRE. "You can't do that" "you must be lucky to be able to save" "I bet you are hiding extra income" "you must have gotten a big inheritance" etc.

Question the conventional wisdom and the complainypants folks start in.

Oh, As of this afternoon I'm now up 63.3% for the year.
« Last Edit: August 03, 2020, 04:46:09 PM by PaulMaxime »