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As someone who has tried to answer questions from new subscribers to the Hidden Gems service, I find I've come across many of the same questions time after time. I've tried to compile a list of the questions--in no particular order--that seem to crop up regularly. If you think of any more, add them to the thread and we can update it regularly. Include, if you can, a link to an "authoritative" response on the question, or make your post the authoritative answer.


Q. When is the next issue of Hidden Gems going to be released?

The newsletter is released at 12:00 noon EST on the fourth Thursday of each month.

Q. Why is Hidden Gems released in the middle of the day?

The newsletter used to be released at the end of the day, after the market closed, to give everyone time to read and digest the information that was presented. However, it was found that because the market is very "illiquid" at that time, there was huge pent-up demand at the market open, and Hidden Gems recommendations would have a much larger price "pop" than they do now. The release time was changed to midday because the market was more liquid. Tom Gardner has also noted that most small-cap newsletters release their recommendations midday, undoubtedly because of that reason.

Q. When is the next mid-month update going to be released?

The mid-month update is released on the second Thursday of each month. You can find all of the updates here:

Q. Why are Hidden Gems tracked against the S&P 500 and not against a small cap index?

The Fool has long maintained that if you're leery of stepping into individual securities, indexing might be better. Its 13-Steps to Investing has always maintained the S&P 500 is perhaps the best alternative for new investors, even as they note the existence of other indexes, including the various iterations of the Russell 2000:

"Index fund," until not that long ago, meant the Vanguard S&P 500 product almost by default. We still believe that this individual fund, and its cousin, the Spider, are the best long-term products for index investors.

Thus, if you're going to invest in stocks, then you ought to at least beat the market. And the "market" is generally considered to be the S&P 500. Here's one of Tom Gardner's many answers to this oft-asked question:

Q. Well, how has Hidden Gems performed against other indexes?

Quite well, thank you. Fool FoulWeather compiled a scorecard recently that compared the Hidden Gems recommendations against a variety of indexes. There's not an index that has done nearly as well. You can see the results here:

Q. Why are Hidden Gems tracked in the Scorecard from the time they are announced? No one can buy in at those prices.

Tracking a stock from the time it was announced happens to be the industry standard. A stock is found, recommended and presented to subscribers. From that point on we track its progress. It simply makes sense to begin tracking its performance from the time of the announcement.

Many Fools wait days, weeks, even months before buying a Hidden Gem recommendation. There is no way the Scorecard can effectively track all of these buy points. But the Scorecard's performance numbers are unimportant. What matters most is your numbers. How is your portfolio doing? Track your performance against the market. That's what counts.

Q. Is there any alternative Scorecards keeping track of Hidden Gems performance at another time frame?

Why, yes there is! Fool Klingsor4 has been regularly updating the performance of Hidden Gems using a modified Scorecard that tracks performance based on the closing price the day of the announcement. Results are still impressive.

Q. How many Hidden Gems should I own?

That's a question that could fill a graduate thesis paper--and probably has! There's the idea that you should have a small, focused portfolio of only a handful of stocks that you can track and assess. There's the idea that a Fool can have anywhere from 10-20 stocks and still achieve market-beating returns. And then there's the school of thought that says a widely diversified portfolio consisting of dozens of companies, can achieve outstanding returns because no one stock represents a significant portion of your portfolio.

Tom Gardner, after years of investing, has finally landed in the latter camp. He believes that the diversification achieved from owning many companies, the reduced volatility realized, and the learning experiences encountered, outweigh any negatives such a strategy may create.

Consider that you will have 24 Hidden Gems offered to you and 36 Watch List stocks. 60 different companies to choose from over the course of just one year!

Q. I'm a new subscriber. Should I buy past recommendations or wait for the new ones to come out?

There are many ways you can invest in Hidden Gems. You could look over the past recommendations, find those that you like and are still trading close to their recommended price; or you could just invest in the new ones as they come out; or, as a third way, you can use a combination of the above.

A recent mid-month update explored how Tom Gardner and some Hidden Gem staffers handle this question. Look, also, for the link in there to the board "HG: When to Buy Hidden Gems."

Q. I've read that Tom Gardner has recommended taking "one-third" positions in a company. What does that mean?

If you normally invest $1000 in a stock, put $333 into it instead. Then, if you like the stock's "story," put in another $333. Finally, if the price gets beaten up a little or is discounted for any number of reasons but you still believe in the long-term value, fill in with the remainder of your investment pool.

Q. How do I format my posts so that I can italicize or boldface words in a post? For that matter, are there other simple ways to format tables, bullets, and the like?

Using just a handful of formatting techniques can help make certain ideas or thoughts stand out. A few simple techniques are all you need:

Q. I use Excel to make spreadsheets and would like to show my work without having to re-type everything. Is there a simple way to import Excel data into a post?

Yes there is. Fool TheGreatRadish created a nifty little program that enables you to import your Excel data quickly and easily. You can download the program from his site. Just click on "Exports and Imports" then on "ExportText."

Q. Does Tom Gardner own the Hidden Gems he recommends?

No, but not because of a lack of faith in the picks. Rather, Tom has said that he does not want to be in a position of having to sell a stock he's recommended for reasons that have nothing to do with the stock's value. People have to sell stock for many reasons--a down payment for a house, tuition for the kids, a new Maserati. These have nothing to do with whether or not the stock is still a "good" stock to own. If Tom were in that position, and it became known (as it would, since the Fool has a strict disclosure policy) that he had sold a personal holding but hadn't recommended a sale to subscribers, it would present a conflict that he would rather avoid.

So Tom, even though he would probably love to be able to own FARO, Middleby, Transact and the others, he abides by his decision not to take a position in any company he recommends. Here's a thread that discusses the issue:

Q. I've just joined Hidden Gems and am very excited. What should I do first?

The first thing to do is probably slow down! Tom Gardner has given some excellent advice on what to do when you join: read Peter Lynch's "One Up on Wall Street;" read the back issues of Hidden Gems, which contain some great investing lessons; ask questions on these boards; and, finally, "get some skin in the game." Actually go out and buy a Hidden Gems recommendation and use your time and enthusiasm to learn as much as you can about investing.

Q. I've looked at charts for the day Hidden Gems were recommended. It seems that they started jumping up before the announcement time. Is someone buying on insider information?

Looks can be deceiving. It's undoubtedly a problem with the chart you're using. What you need to do is to go to a site like and view the minute-by-minute prices where you'll see that the price spikes immediately after 12:00 noon. On a number of sites, the time period is longer and the only way to show the two data points is by connecting them with a line so that it appears the stock started moving early, but in reality it did not.
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