The Year in Teasers

By Travis Johnson, Stock Gumshoe, December 23, 2008

It’s been close to two years now since I started writing about the teasers that investment newsletter publishers send out to entice us to subscribe, and the results aren’t so pretty.

I track the picks that I sniff out, and make those tracking spreadsheets publicly available so that everyone can draw their own conclusions — but as you can imagine, the last six months have turned even the best-sounding stock ideas into ashes.

Those of you who’ve been around these parts for a while also know that I can be a bit pokey with the updating — but as we wind down the year, I wanted to let you know that I just recently added all the November and December picks, so the spreadsheet for this year is complete (unless I happen to come across something that calls out for a writeup between now and New Year’s Day). The tracking data is now easily available from any page on the site, using the “tracking” link at the top (near the search box).

Any surprises? Well, the average pick this year is down about 40%. The average pick from 2007 is down 56%. (Neither number is particularly scientific — it includes every pick made all year, and is not annualized.)

These kinds of markets bring lots of shocking numbers, especially when you’re dealing with “story stocks” and investments that are often highly speculative — the outliers are always what I find most interesting, and of the 400 or so stocks I’ve looked at and written about there are 35 or 40 that are down by at least 90% (and four or five that are down by 99% — none have completely disappeared from the markets yet, I don’t think). On the other end, only about 10% of the picks are up at all, the vast majority would have given you negative returns.

These spreadsheets have always shown a lopsided market, with a handful of great performers and a few handfuls of abysmal ones, but it used to be that the great ones were up by 400% — now the “great” ones are just up, period.

On the positive side, some of the best picks this year were made in the last couple months, as folks started to do some bottom picking during these awful markets and enjoyed the recent rally from the lows. Two of the best picks from the year were made just this month, Silver Standard (highly leveraged to silver, this one moved dramatically when silver shot up) and Nanosphere (a heavily teased nanotech company). They could still fall back quickly, of course, but it’s nice to see a little green on the spreadsheets.

And the best decision of all during the past two years?

Selling out and going to cash, as aQuantive did when they were bought out by Microsoft well over a year ago … that buyout, at a high premium, means that aQuantive is now by far the best performer in Gumshoeland and the only one that has a return of over 100% (can you guess how many of those teaser ads “promised” returns of at least 100%? Yep, pretty much all of them). That pick was made back in April of 2007, so it seems a bit sad that the teasers peaked so early.

And of course, the usual disclaimers: The tracking that I do is of a fictional “impulse investor” who sees the ads that the newsletters send out, gets hot under the collar and buys the stock immediately, and holds on forever. Clearly many newsletters would have performed better than these singled-out teaser picks, and some would have had you sell stocks that were falling. In the history of tracking these picks there have been many, many outstanding performers in the short term — some were up 300-400% for quite a while, so you could certainly have done better than this if you had magically determined the perfect sell point. Of course, you could have often done better by buying an index fund, too.

I hope you’ve all had some sunshine in what turned out to be a dismal economic year, and I hope you’re having a wonderful end-of-year celebration, whether it’s Christmas or Hanukkah or the Solstice or Kwanzaa, or just some time off work and the celebration of family, friends or whatever blessings you may enjoy.

Unless inspiration strikes viciously from the email box, I won’t be writing you again until next year, so let’s all raise a glass to a brighter and more hopeful 2009. Thanks for reading!

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22 Comments on "The Year in Teasers"

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farley 5
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farley 5
December 23, 2008 5:08 pm

Farley’s spreadsheet is updated today. If a stock is not on there, it is either a penny stock or a foreign one not in my database.

DLS
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DLS
December 23, 2008 5:36 pm

Thanks for all you do here Gummie, and have a fab vacation yourself! You’ll be missed in the interim.

George
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George
December 23, 2008 6:37 pm

Travis:

Best wishes for the Holidays and, as the Chinese are so fond of saying, here’s to an “interesting” 2009! Let’s hope that next year’s tracking sheet is a more balanced rendition of reds & greens….

Al
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Al
December 23, 2008 7:41 pm

Hope you enjoy the holiday season. Thanks for all your work with this web site. I enjoy reading your research and your other readers who add their own thoughts. A happy and healthy new year to you and your family.

WALTER O'ROURKE
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December 23, 2008 9:22 pm

ALL THE BEST TO YOU TRAVIS AND TO ALL YOU HOLD DEAR AS WELL. MAY ALL OF YOUR STOCK ZOOM TO NEW HIGHS AND THE TAX MAN GOES ON A LONG VACATION BEFORE YOU HAVE TO PAY HIM PART OF THOSE VAST PROFITS.
REGARDS WALTER

Dick Ribas
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Dick Ribas
December 23, 2008 10:32 pm

Have a wonderful Merry Xmas and Happy New Year to you and your family!!

Dick R

jerome plewa
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jerome plewa
December 23, 2008 10:58 pm

merry christmas and happy new year jerome

Rollemagain
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Rollemagain
December 23, 2008 11:51 pm

Merry Christmas Gumshoe and thanks. Wishing you, me and all your readers a prosperous 2009.

allen l smith
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allen l smith
December 24, 2008 1:26 am

Thank You, Don’t take any “Wooden Nickels”. Merry Christmas and Happy New Year.

Henry Chakoian
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December 24, 2008 6:43 am

Travis, you provide a great antidote to all the BS sent out everyday by promoters. I appreciate you and will sign up for 09 as a subscriber.A point of perspective. My family is aware that I am an active investor. They ask me how I’m doing in this market.
I tell them I am in great shape. Of course their inheritance has taken a big haircut, but that’s their problem. I’m fine. Let’s both rest up and get ready for next years fray.

destry
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destry
December 24, 2008 7:58 am

Thank you, Travis.
I like what you’ve done with the web site…It looks “some ole good”.
This year has been about as satisfying as trying nail jelly to a tree…
I’m an optomist, yet I do believe it’s going to get real nasty from here on out…
That’s why I, for one, find the “Stock Gumshoe”, so satisfying.
Good, smart people…Intelligent thought. Something for all of us.
Well Done, Travis…I’m proud of you!

Rick
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Rick
December 24, 2008 9:34 am

I sense a reluctance to completely LET GO and enjoy your vacation. You will be terribly missed but I would feel better knowing that you are enjoying yourself and your family without the stress.

gary
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gary
December 24, 2008 10:25 am

Travis,
My best to you and yours this holiday season. You are providing a great service.

gary

Julia
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Julia
December 24, 2008 1:30 pm

That’s right, Travis, don’t make us come over there and unplug your computer; recharge and come back to us in ’09 ready for a new era!

Happy Holidays to you and yours,

Julia

Richard Ripley
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Richard Ripley
December 24, 2008 2:30 pm

Travis,
Thank you for the service you provide to us as I had learned tremendously about stocks as perceived by Gummies and their inputs. Enjoy your vacation and as we say to you from my language: Ia manuia le kerisimasi (Mrrey Xams & hpapy New Yaer)…look forward to read you in 2009.
R Ripley

Tom K.
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Tom K.
December 24, 2008 7:38 pm

Merry Christmas and Happy New Year to you and your family, Travis. Enjoy your time off…..you have certainly earned it. Thanks for all you do for us average investors.

EYoung
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EYoung
December 24, 2008 10:25 pm

Day late, Dollar Short, The Sentiments ALWAYS in favor~! Blessings to you and yours, Gumshoe, and I agree with Rick, Julia and the rest of the posters – Unplug that computer, and take a VERY WELL DESERVED vacation~!,,, The markets will be just as screwy when you get back, and we’ll work on righting them then,,, You deserve the “down-time”, Kind Sir,,, and your family deserves YOU!
Blessings, and a Merry Christmas to all.
EYoung

Michael Quinn
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Michael Quinn
December 25, 2008 1:27 pm

I wish you the best of health, happiness and prosperity in the coming new year. I do appreciate all your gumshoe efforts.

Derf
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Derf
December 26, 2008 1:55 pm

Has anyone else noticed the number of investor guru teasers in the mailbox has decreased and the tone of those that do arrive is much more subdued?

Wait until the market starts going up again (it will happen someday). We’ll start hearing about those beloved 10 baggers once more.

Bart
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Bart
December 30, 2008 2:34 pm

Have a wonderful and prosperous New Year. You are my favorite stock analyst on the Web – or elsewhere, for that matter – brilliant, articulate, and solid as a mountain of silver. And – no small thing – always entertaining. Your work is much appreciated.

TV Guy
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TV Guy
December 31, 2008 3:51 pm

Hey Travis….you’ve assembled a MOST IMPRESSIVE list of de-bunked teasers…and equally important…you have brought together a unique, level-headed group of people on the FORUM, who, in addition to yourself, are a wealth of solid information.

All the very best to you and your family !
The TV Guy

Gravity Switch
Admin
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December 23, 2008 5:17 pm

You’re quick! As always, many thanks.

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