For the past 20 years, a newsletter ... called the Hulbert Financial Digest ... has been keeping track of the performance of other newsletters. Of the original ones it monitored, only 17 remain, and, at last count, the model stock portfolios of only three of them beat the market as a whole over that time

Thanks for the link. A few thoughts:

1. The "market beating performance" is worse than 3 of 17. The ones that went out of business [likely] did so because of underperformance, not due to such stellar performance that the publisher decided to stop giving advice.

2. Statistically, some are going to outperform their benchmarks. If I decide to only buy stocks whose names start with a vowel, and you decide consonants, one of us will outperform (maybe only by a little). But, with such an arbitrary plan, it's only random chance.

3. The ones that outperformed...did they outperform enough to recoup the additional costs of active trading or of the newsletter itself? (One wanted me to subscribe for $400 per year!)

4. I recall reading about a scam--The broker calls 100 people and says, "I'm not asking you to invest with me right now...I just want you to watch stock ABC. It's going to go up." Then he calls another 100 people and tells them, "I want you to watch stock ABC. It's going to go down." Then, when ABC goes up OR down, he calls the 100 people to whom he made the correct prediction and to 50 says, "I want you to watch stock XYZ. It's going to go up." To the other 50, "I want you to watch stock XYZ. It's going to go down." After XYZ goes up or down, he's got 50 people who think he knows what he's talking about.

5. Mutual funds also have this characteristic...the ones that outperform are advertised heavily; the ones that underperform get rolled into the high performers. That way, the fund companies can have seven of eight funds that outperformed their benchmarks.
http://boards.fool.com/Message.asp?mid=17732025

6. The guys with the best batting average rarely are the ones hitting the most home runs in a year.