“Great Online Advertising Play” owned by John Paulson, and “The Only Smart Way to Profit From Solar” (Hilary Kramer)

By Travis Johnson, Stock Gumshoe, September 1, 2010

I wrote about Hilary Kramer and her new(ish) GameChangers newsletter for the first time just a couple weeks ago — so it’s certainly too early to judge whether her teaser stocks tend to perform as she predicts (that pick, Metalico, is down about 10% from when I wrote about it … but I don’t hold a grudge, of course, and it was a tough August for the broader markets, too).

But we can keep sniffing out here heavily hyped ideas, at least — and making some snarky comments.

So … let’s start with the snarkiness, shall we? Her latest ad takes credit for making her readers a 25% return on shares of Tesla (TSLA), the electric car maker that IPO’d about two months ago. Which would have been a very tricky feat, indeed — she did say in an email on June 29, the day of the IPO, that she advised buying shares of TSLA up to $23.50, which you could have done on the next day if you were quick. June 30 was when the shares shot up briefly to $30 in the post-IPO mania, but the stock also dipped to $23.30 that day … and the following trading day (July 1), if you were a little more patient and had that limit order in for a bit under $23.50, you could have picked up shares even cheaper — maybe as low as $20.27 … or at the very least, for the closing price of $21.97, still well under that “buy up to” price of $23.50.

Here’s how she put it in her email on June 29, after saying that a potential buyout in a year could get the stock to $75 …

“But even if I’m wrong about a take over, and these guys succeed in going it alone (and if anyone can do that, it’s Tesla Chairman Elon Musk), yesterday’s bear-beating performance, and all the buzz around this stock shows that it’s got a real shot at $40, and a quick 70% profit before year-end. That is why I am recommending all investors take a small stake in Tesla (NASDAQ: TSLA) at $23.50/share or less.”

So you buy the stock, let’s be charitable and say that it took you a day or so to get around to reading the email, and you see the volatility so you peg an even lower limit price than she suggested, and you get your shares for, say, $21. You’re pretty excited, right? Looking forward to that “quick 70% profit” as the stock goes to $40 before the end of the year?

Well, then you would have been quite surprised to see that, a couple months later (that is, last night), Kramer sends out another email saying “Sell Tesla Now.”

And it’s not just that she says to sell it now after predicting such great gains in a few months, or dramatic gains in a year … it’s that she says to sell Tesla now (it’s currently trading for just about $20) AND she claims that she’s up 25%, when we know that at no time on the two days after that June 29 email did the stock get as low as it is right now.

So how did she book this 25% profit? Well, she’s still saying, to her credit, that she was urging you to buy at $23.50 or less.

But then she says that …

“I hope you took that advice.

If you did, you bagged a fast 25% gain in just seven weeks.

Today I’m here to tell you it’s time to cut Tesla loose and put those gains to work in my new #1 energy play.”

Huh? How do you go from $23.50 down to $20 and claim a 25% gain? Well, part of the answer to that is in the dates — she’s now saying that she gave you this “buy under $23.50” suggestion seven weeks ago, though that first email I saw from her on this was on the day of the IPO, June 29, and that was nine weeks ago.

And it turns out that if you had ignored her advice at the time, then come back to it two weeks later, you still couldn’t have made 25% from the shares. The only way to book a gain like that on this stock so far would be if you had bought very near the absolute lows, when it dipped a few days after the IPO, and sold it at at least $20. That second week of the trading for this newly public stock, after the July 4 holiday, was when the lows were put in — it got down to $14.98 at one point on July 7. And if we go by closing prices, we could assume that maybe you were very prescient, you saw the big dip coming, and you got your shares at $15.80, the lowest closing price the shares have registered so far.

If you had done that and sold this morning at $20, yes, you could book a 25% gain (that’s a gain of $4.20, which is slightly more than 25% of $15.80 — you could have even paid as much as $16 for the shares and still gotten a 25% return by selling today). Of course, that was also more than her stated “seven weeks ago” R