No. of Recommendations: 13
"Actually, you can open the account with a broker and instruct him to trade as per trusted newsletter." - Denny Schlesinger

That is how I started after retirement in 1994. I subscribed to two newsletters and followed their advice...except I could not afford to buy all of their choices. So, I was back to making some decisions about which of the newletter choices were the best.

I analyzed the newletter's choices a couple of years later and found they were wrong almost as often as they were right. They were better than my broker, but still picked a lot of losers. I was making money, but not that much better than the averages.

During this time I was beginning the study of the markets that led to the BMW Method. I finally began buying stocks that were recommended in the news;etter, but only after the shares reached their low CAGR. My performance soared. This led me to question if the key was the BMW Method or the newsletter's choices? I then tried just buying stocks that were not on the newsletter's lists but were at their own low CAGR.

I attempted to backtest the newsletter selections. The ones that I had bought earlier on their recoomendation that did the best were at or near their low CAGR when I happened to buy. The selections that were above their average CAGR when I bought did not do well at all. I decided that the newsletters added very little value.

I cancelled my newsletters once the truth was known. The newsletters helped a little, but the key was buying low. However, analyzing 10,000 companies to find the few that were at their low CAGR proved daunting.

So, if a newsletter makes an investor more comfortable, I suggest they buy the newsletter. Then, take all the selections from the letter and analyze them by graphing the stock's CAGRs. Buy the ones near the low CAGR. You will be taking the expert's advice that you paid for, but you will also improve your performance because you will buy at the lowest relative price in history. I think you will do far better than buying all of the newsletter's selections at once.

The next thing I tried was the Motley Fool. It was free back then and I used one of their stock picking methods, the Foolish Four, to limit my analysis. The FF was much like the Dogs of the Dow, but it emphasized the dividend more. My twist was to apply the BMW Method after finding the best FF stocks. I eliminated any that were not close to their low CAGR. This is what led me to MO and CAT in 2000 and eliminated EK and JPM. Three years later, I was buying DOW stocks C and JPM when they were suddenly at their low CAGR due to the ENRON mess. But, by then I had stopped using the Foolish Four, newsletter and brokers for my stock selections. I just relied on the BMW Method, but it took me about ten years to wean myself off of my security blankets.

The BMW Method board was the next step. You folks have helped me share my idea and find the best stocks to buy at the same time. I credit this board with NOK, FARO, SDD, and several others. I use your ideas as well as any others that I see on CNBC, or hear people discuss. I do the charts and decide of I want to get into the stock. Ideas are just ideas. I listen to them all...by the analysis is the key. Anyone can give a hot tip, but the price may not be as good at it might be later. The company may be top notch, but it could be over-priced. We need some way to sort out the winners from the future winners. It is all about timing even though the experts say you cannot time the market. I think we have proven that to be false.
Print the post  

Announcements

BMW METHOD EVENTS

The 2009 BMW Method Conference has been cancelled, due to minimum attendance numbers not being met. We hope to continue the annual BMW Method Conference tradition next fall.

Learn about the first four conferences on the BMW Method Website.

The BMW Method FAQ

BMW Method Website
Annual Conference Videos and Other Resources & Services
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement