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Author: LeKitKat Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Feste Award Winner! Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 21596  
Subject: Re: David Gardner Date: 10/25/2012 9:59 PM
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Recommendations: 45
I don't think this is tales told out of school

DG is beating the S&P at SA by 81% and is up over the decade or so 107.4%. So doubled his money over 10 or 11 years. Don't know the inception off hand.

What happens with his stuff is a lot of stocks outperform incredibly-- Disney 2397%, Amazon 1356%, Priceline 252.9%.

There are many re-recommendations at different price points that also count towards the final tally. Disney appears a few times as does Activision and Netflix.

There are around 124 recommendations--some repeats. Around 45 of those are in the red--not a bad percentage track record. The misses are big at as much as 94% losses.

The problem is this is not a portfolio and there are no position sizes It's just a list of ideas. The good ideas are huge. The losses equally as bad but not as many of those as wins.

The other problem I have seen over the years with these two ideas per month newsletters is that the subscribers often overweight the losers and have no internal controls or discrimination that allows them to separate the ideas that are really good from those that are doomed to fail. I have seen a few subscribers absolutely ruined by trying to follow the ideas every month. I am equally certain a fair number manage to go overweight in the winners and come out well.

DG has an uncanny talent for seeing the possibilities for growth mainly in things consumers want. There is a paucity of industrials, financials, and energy. He is a consumer oriented wunderkind.

The problem I have had over the years is believing the stories as they are presented to subscribers. The Fool requires every idea to be presented as if it is a sure thing and the best idea they have seen --at least for the month. The research is always packed with enthusiasm and Foolishness and little balance. The risk section is usually short and not detailed. So over the years I have adopted a skepticism for all the research that really isn't warranted. Still trying to figure out a way to sort the wheat from the chaff.

The most successful subscribers are those who can believe the stories in the research and fearlessly buy and get lucky enough to get bigger exposure to the winners than the losers. I do believe there is a fair amount of luck involved for the subscribers that have no tools to research the ideas by themselves and make an independent decision.

I failed to buy Disney and Amazon and Apple and am seriously working to lower my threshold of skepticism of a good story that may be true.

Since I try to own fewer than 40 stocks, buying all 124 recs is not an option and that makes picking the right one more difficult as it does fo all subscribers that don't buy every rec.
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