Stock Gumshoe — Monthly Review

Well, I’ve now been sleuthing out these companies publicly, and tracking the performance of these advertising emails, for long enough to take a little look back and see if anything interesting has happened to these firms. The most widely hyped pick of the last week, for Porter Stansberry’s London natural resources bank, is probably too recent to do a fair look at (see below), but we can examine some others.

I figure I’ll try to do this every month or so — take a look at the outliers and see if anything stands out.

So what can we say about the companies that have been sleuthed out in this space so far?

Well, there have been five really dramatic movers — way down or way up.

The big winners so far? No surprise, they’re in mining and defense, with Force Protection (FRPT), Lynas (LYSCF), and Rusina (RSNAF) all big gainers of near 100% (or more) since the ads teasing the companies started coming from their respective newsletter advisors. Interestingly, those two mining companies are both Australian — though only one of them mines there. And Force Protection gets a little bit of an unfair advantage here because the email I sleuthed out for them was way after the fact — it came out back in November, so they’ve had more time to gain. Just a reminder that this comparison is not annualized or anything, and is anything but fair.

The big losers? Well, you can’t go down more than 100% … but how about falling 60%? That’s pretty bad, and that’s what happened to Atherogenix (AGIX) almost immediately after we sleuthed out the ad on that one (if you remember, this was a company that was supposed to immediately CLIMB by hundreds of percent … pesky FDA!). Seems that “stent in a pill” strategy maybe isn’t the guaranteed blockbuster the newsletter was promising.

The other big faller has been Solomon Technologies (SOLM), which was supposed to have ironclad patents on hybrid cars and was expected, according to the teaser ad, to deliver 1,000% returns over time. It’ll have to be closer to 2,000% now, since it’s dropped 40% since the email touts came out to tease this one.

Other than that, I’m actually surprised at how many of these very volatile stocks, especially the tiny junior miners and others of their ilk, have actually performed reasonably close to the overall market over the past month or so — lots of up or down by 5-15% or so, but nothing terribly dramatic from most of them.

Though it might also be useful to think about the most popular of these posts, which also have been the ones that I expect are most aggressively advertised … how have they done so far for the folks who read the ad, signed up for the service, and bought shares that day?

It’s mixed — here are the most popular posts so far, and the returns of their matching stock:

Africa’s $10 Billion Secret — Geovic Mining — down 5%

Lake Superior’s $2.6 Trillion Secret — Polymet Mining and Duluth Minerals — Polymet up 25%, Duluth up 9%

New American Super Brand — Whole Foods — down 5%

The Coming Great Wyoming Flood
— Big Cat Energy — down 27%

The Kingpin Drug Stock: 3000-6000% Profits …
— up 12% (still a ways to go there, eh?)

The Company that’s Turning Water into Profits — PICO Holdings — unchanged, though it’s been less than two weeks so perhaps that’s not fair.

Hot Uranium Stock to Buy Now — Unor — down 6% (it’s only been two weeks for this one, too)

And one that’s really too recent to count? The post on Jack Morgan’s Single Best Investment for 2007 from Porter Stansberry has been hugely popular, but it’s less than a week old. So far, their pick, Ambrian, is already up close to 20%. Not a bad start.

So that’s just a quick breakdown of the world of investment newsletter teasers over the past month or so as I’ve gotten this service up and running. There are probably more interesting ways to look at the data that’s being collected in the Gumshoe spreadsheet (linked from the sidebar if you ever want to see the live, updated version) — maybe I should examine which of the “normal” companies have done best (ie, Whole Foods, Radio Shack, White Mountains) and see how that compares with the uranium and cobalt miners … or maybe, as the list grows, I should try to sort it by newsletter and see if any of them develop a consistent record for their teaser stocks. Let me know if you’ve got ideas.

And as always, don’t take this too seriously if you’re examining the newsletters — this may not reflect at all on the ability of the advisor to develop a good portfolio, though it certainly reflects on their ability to cherry pick their best short term idea (I’m sure none of them want to be picking Atherogenix as a gem to get you in the door, then have to answer your emails when it flops three days later).

Thanks for reading, contributing, and sending in your stock spam — all much appreciated. If you’ve got ideas for the Gumshoe going forward, let them fly here. Happy Investing.

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May 1, 2007 7:55 pm

I enjoyed reading yr post.

I assume that sorting by newsletters is the best way to track the publishers