dave@cylixd.UUCP (Dave Kirby) (08/29/85)
The July 15 issue of Barron's had an article rating the 5-year
performance of various market letter writers. For those of you
who missed the article, here is a summary of the results.
The results were taken for the period June 30, 1980 through
June 28, 1985. The Dow Jones Industrial Average gained 100.8% over
that period. Here's how various market letters' recommendations did:
The best performers:
GAIN NAME
---- ----
+257% Prudent Speculator
+241% Dines Letter (growth stock portfolio)
+206% Growth Stock Outlook
+178% Green's Commodity Market Comments
+172% Professional Investor (AMEX only)
+146% Zweig Forecast
+132% Outlook (Income portfolio)
+139% Market Logic (Master portfolio)
The worst performers:
GAIN NAME
---- ----
+20% Dow Theory Letters
+16% United Business (Growth portfolio)
+13% Professional Tape Reader
+12% Hein Investment Letter
(-.3%) Howard Ruff's Financial Success Report
(-12%) Dines Letter (moderate risk portfolio)
(-29%) Holt Investment Advisory
(-45%) Joseph Granville's Market Letter
NOTES:
Several letters that ranked in the middle were omitted. See
original article for these.
The Dines Letter ranked among the best and also among the worst,
depending on which of their portfolios you followed.
The Prudent Speculator, which posted the greatest gain, makes
very infrequent trade recommendations. Apparently, though, when
they make one, it's a whopper.
The Zweig Forecast is the only one which did not have at least
one losing year among the five. The Zweig forecast has always
shown a gain, though sometimes the gain was miniscule. Zweig trades
VERY frequently.
Joe Granville was by far the worst of the performers. His On-
balance-volume theory, once spectacularly successful, appears to
be outdated. In 1982, just before the big bull market, he was
predicting a 1929-style crash. He continued to stubbornly hold to
this prediction all the way to the top of the bull market, and still
believes it is "just around the corner." He had his readers sell
stocks short in 1982 and 1983, and lost 29% the first year and
25% the next. He took out an ad in Barron's in 1983 to proclaim,
"1983 will be a major bubble which historians will later call a
CRASH!" I personally have subscribed to this guy, and he has a bad
habit of not being willing to admit he's wrong. For instance, he
will continue to predict a crash as the Dow goes up 100, 200, 300
points, having his readers sell short at each new high. Then, when
the Dow corrects and drops 50 points or so, he victoriously
proclaims: "See, I told you there would be a crash! Alert readers
were able to profit from our advance knowledge of the downturn."