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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."

I think the newsletters should promote their average returns. Touting individual stock picks that did exceptionally well is a cheap trick and should be avoided, agreed.

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.

Here I don't quite agree. I think the average does indeed promise you something, the expectation of similar returns, why make such a big deal over it in the ad otherwise?

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.

Exactly, and you couldn't predict better or worse. But, I want to average 50%/year so I therefore should buy each recommendation to match the newsletter return. Then I end up owning dozens and eventually hundreds of stocks, which again, may be fine, but it isn't portfolio concentration. I have no problem with The Fool being "investors writing for investors," in fact I like it, but nevertheless I see this big inconsistency. For example, look at this quote from the Stock Advisor (

"How many stocks should I own?
We want you to build a diversified portfolio that helps you maximize profits and minimize risks. You want to own enough stocks so that a few bad surprises won't ruin your returns, but not so many that your great selections are cast adrift in a sea of also-rans. As a rule, we recommend holding anywhere from eight to 15 stocks..."

If I take the above recommendation, I can't expect to match the advertised return of the newsletter unless I'm lucky. So do I concentrate or buy 'em all? That's just my observation.


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