I like the work of Dan Ferris, I’ve seen him present at a few conferences over the years, and have read plenty of his free commentaries (and teaser ads), and his ideas, while not particularly sexy, are well-researched and interesting.
That doesn’t mean they’re always successful, of course — I’ve written about several stocks he has teased in order to tempt new subscribers to Extreme Value, some of them have been great long-term values and others have been duds (I don’t know what his average return is, of course, since he doesn’t publish it and I’m not a subscriber). I also don’t know which of the past stocks that were weak for a long time might still be in his portfolio — his pitch for Nam Tai Property (NTP) as a “penny real estate” play back in 2014, for example, looked terrible for three years and then perked up and started rising in value over the past six months or so.
And the most aggressive stock teasing that has come out of Ferris’ service over the past five years or so has been for Altius Minerals (ALS.TO, ATUSF), which he has touted many times as an undervalued asset owner and potentially the next great royalty play… it hasn’t worked very well, despite the fact that I agree with him and have held Altius for many years. It was a Ferris teaser that first turned me on to Altius back at $5 or so in February, 2009, when everyone was quite certain that the financial world was coming to an end — and holding from that point forward would have resulted in 72% gains, which sounds OK until you compare it to the 234% gains you would have had from buying an S&P 500 index ETF at that point (my performance has been worse than that, because I’ve bought more along the way, including recently).
So there’s your caveat — I often like Ferris’ reasoning, sometimes I agree with him on stock ideas, but he can certainly be wrong (and sometimes “early,” which is seen as the same thing as “wrong” in our “what’s going to go up in the next six weeks” investment culture).
And most of the time, the hard sell for Ferris’ Extreme Value seems to me to overstate the near-term potential — which is not so uncommon, given that teaser ads always have to have a “hot” deadline and a near-term catalyst to catch your attention (even if, in some ads, the catalyst is only in the ad copywriter’s imagination), but it’s worth noting because Ferris ads typically include the same “get rich quick” frenetic language as most heavily-promoted newsletters, even though, when you look a little deeper, the real pitch is for long-term returns.
This time there is actually a deadline and a potential catalyst, and it is based on something real — a regulatory change in the health care industry. Here’s how the ad gets our attention:
“We’ve waited 7 years for this.
“The Stansberry analyst who recommended three of our all-time best-performing stocks is stepping forward with his newest big opportunity.
“It’s a little-known situation in t