Unbelievable (Stock Letter Edition)
Mark Hulbert, the funny guy who makes a life out of ranking stock- and newsletters and distributes a sentiment index, has a rather weird story today on “marketwatch.com.
He started measuring the performance of the tipletters in 1980 (June 30th).
And he has a NEW NUMBER ONE!!! 
In first place for risk-adjusted performance is now “Growth Stock Outlook”, edited by Charles Allmon. (whatever risk-adjusted means)
Growth stocks? READ ON
Allmon has been almost completely out of stocks for more than 20 (!!!) years. It was in late 1986, in fact, that he became convinced that stocks were becoming overpriced, a belief that in turn led him to sell almost all of the stocks in his newsletter model portfolio and put the proceeds in cash.
With only one or two exceptions, his model portfolio has remained primarily in cash ever since. It currently owns just three stocks that collectively total 11% of total portfolio value, for example; the other 89% is parked in a money market fund. … Did I read GROWTH STOCKS?
The Dow was below 2,000 (!!!) when Allmon built up his high cash position. Given the strength of the ensuing bull market, his overabundance of caution would seemingly have buried him in a hole so deep he could never emerge.
He nevertheless has dug himself out, courtesy of the interest earned on his large money market position, the returns on his few remaining stock holdings, and the power of compounding.
Allmon shows no signs that he might return anytime soon to the bullish camp. In his latest newsletter, he writes that “our country appears to be on the brink of the biggest financial firestorm in our 220-year history.” Expressing little confidence that the government will get us out of this mess, he adds that “the trick now is to avoid being scalded in a sea of nonsense.
Ok … IMHO … that means:
- All stock letters are not worth anything as they are not able to earn you money.
- The market is closer to a bottom than we might think as all investment approaches have failed.
- If you stay disciplined, you can win with “any” approach.
- Never give up as everybody will have “his 15 minutes” of being in the spotlight.
Take care and have a nice weekend!
PS … I should start a tipletter 
Tags: Allmon, Hulbert, performance, stupidity
