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Author: TMFSelena Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 766  
Subject: Re: Are 20 Stocks Too Many Date: 12/9/2005 7:41 AM
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ab --

<<I think this is fine yet I also think TMF should nave an internal consistency particularly for the benefit of new investors of which there are many here. >>

Gotcha. I'm with you on that -- though it's not as easy as it seems. The truth is that (a) various Fool writers and thinkers, while generally holding similar views on investing, do have differences. We don't always agree on the merits of various specific stocks, and we don't always agree on investing in general, too. (One might like options and shorting, another might avoid those, for example.)

I think that if you're going to be an active, involved investor, it can be hard to keep up with many stocks if your portfolio is loaded with many. But on the other hand, if you hold, say, 50, you may not be studying each one closely, but your risk in each one is a lot smaller than it would be if each holding constituted 10% of your nest egg. So I can see it going either way, I guess.

See -- I've been noticing apparent contradictions since at least 1999: http://www.fool.com/portfolios/rulebreaker/1999/rulebreaker990920.htm

<< The newsletters are very often advertised with headlines promoting theur respective cumulative returns, as they should be as they are in most cases truly outstanding. Yet the only way one could hope to duplicate the advertised returns is to buy each recommendation from that newsletter or else it becomes a matter of luck. >>

Again, I see your point. But I also (and perhaps this is simply due to a lack of imagination on my part) can't really imagine many better ways for us to promote our newsletters' performance. It would, to me, be *more* problematic to, say, just highlight the performance of a few sample stocks that we've recommended: "XXX is up 300% since being recommended! YYY is up 88% in five months."

The average doesn't promise you anything, but it does convey a sense of how well the group of recommendations has done, and helps you decide whether or not you want to pay attention to the newsletter and its recommendations.

<< So, can a new investor concentrate a portfolio and still match Stock Advisor's 50% returns without being lucky?>>

You mean can someone cherry-pick from its recommendations and match its overall average? I'd think not. You'd probably do better or worse than the average.

Selena

P.S. These are all just my personal opinions and perspective, as a long-time Fool. I'm not responding as any official newsletter representative. Just a nosy nellie.
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