1. No category

The Hulbert Financial Digest
May 2013
NEWSLETTERS PROFILED IN THIS ISSUE:
Volume 33, Issue 9
The Buyback Letter
No-Load Fund Selections & Timing
Written and edited
by Mark Hulbert
Turnaround Letter
ASK MARK
HFD EXCLUSIVE
You have emphasized the
importance of using longterm track records when
choosing an adviser—15
years appears to be your
threshold. This long of a
record considerably narrows
the list of advisers, so I’m
interested in whether there’s
any way—absent waiting
for an adviser to compile a
full 15-year record—to get
insight into whether he has
ability.
Does time heal all (financial) wounds?
There is nothing magical about
15-year track records. It’s not
the case, for example, that a
track record encompassing
14½ years is wor thless and
that, once it is extended just 6
more months, that previously
worthless record becomes an
infallible indicator. It’s a matter
of degree rather than kind.
To understand why I
nevertheless suggest focusing on 15-year records, it is
helpful to review the underlying statistics. What I did was
measure, for track records of
a given length, the percentage
of advisers who beat a buyand-hold during all possible
periods of that length since
1980, when I began monitoring
the industry.
I was looking for the time
period for which this percentCONTINUED ON PAGE 2
At some point, of course, this remarkable
stock bull market will come to an end. In
fact, if you believe some of the prominent
worry warts, that day could come sooner
than you think.
What if that end comes just as you have
invested a lump sum? That scary prospect is
keeping many investors from putting more
money into the market. But I am not so
sure that we should let that fear dominate
our decision making. Believe it or not, my
review of the data suggests that your choice of
investment adviser should not be particularly
dependent on when during the market cycle
you choose to begin following him.
This isn’t to say that it makes no difference
whether you get into the market near a top or
a bottom. Yet I nevertheless found that, with
few exceptions, the advisers who would have
made you the most money, had you invested
at previous bull market tops, are the same
ones who would have been the best for you
to begin following had you started following
them at the lows following those peaks.
The HFD study
In particular, I focused on the three most
momentous stock market tops of the last
three decades: August 1987, March 2000,
and October 2007. In each case, I first determined which advisers had performed the
CONTINUED ON PAGE 2
New highs?
In recent weeks, of course, the major U.S.
stock market averages have surged to new
all-time highs.
One benchmark that is still well below its
October 2007 high, however: MSCI’s All
Country World Index—which reflects the
combined market caps of virtually all publicly
traded stocks around the world. It currently
is more than 10% below its previous high (at
least in U.S. dollar terms). The U.S. market
has therefore been leading the world higher.
The HFD is one of a suite of products based on a database containing over 32 years’ worth of investment advisers’ recommendations. Others are Hulbert Interactive (the website that provides 24-7 access to that database) and Hulbert On Markets:
What’s Working Now (a weekly service highlighting noteworthy patterns in recent advisers’ recommendations and returns).
450
MSCI'sAllCountryWorldIndex(inUS$)
400
350
300
250
200
150
31ͲOctͲ07
31ͲOctͲ08
31ͲOctͲ09
31ͲOctͲ10
A service of
31ͲOctͲ11
31ͲOctͲ12
2
HFD
FROM PAGE 1
ASK MARK
Does time heal all (financial) wounds?
CONTINUED FROM PAGE 1
CONTINUED FROM PAGE 1
age stayed the most constant—
on the theory that the number
of advisers with genuine ability
doesn’t vary much over time.
This focus put 1-year track
records in an unfavorable light,
for example. That’s because,
since 1980, there have been
some 1-year periods in which
hardly any monitored advisers
beat a buy-and-hold, and other
1-year periods in which more
than half of them did.
To be sure, 15-year records
did not eliminate all variability
in the percentage of advisers
beating the market. But it was
far less for 15-year records
than for shorter-term records.
My advice: No matter how
long a track record you have
chosen, focus on those advisers
whose risk-adjusted returns
over that period are ahead of
the market. That subset will
contain a higher percentage of
genuinely good advisers than
the subset of those who didn’t
beat the market. Just know
that, to the extent you focus on
shorter-term records, you run
a greater risk of focusing on advisers whose good performance
is due to luck (a “false positive”),
while excluding from consideration other advisers with genuine long-term market-beating
ability (“false negatives”).
best since those highs. I then looked Newsletter
Aug'87peak
Rank(outof31) Annualizedgain
12.0%
1
16.9%
to see how those same advisers had ThePrudentSpeculator
TheInvestmentReporter
11.7%
2
13.0%
performed since the market lows that
InvestmentQualityTrends
10.6%
4
11.5%
were registered from the bottoms of the
NoLoadFundX
10.2%
3
11.7%
bear markets that followed those major FidelityMonitor&Insight
9.7%
6
11.4%
market peaks. The results appear in the
Wilshire5000
8.8%
10.4%
various tables on this page.
th
12 (out of 103).
Start by taking a close look at Table
1 to the right, which lists the 5 monitored
advisers with the best track records since the Investing at the 2007 bull market high
August 1987 bull market high. (Their returns Table 3 below shows the top 5 performers
since then are listed in the second column.) since the October 2007 bull market high. Not
The Table also shows how those same advis- as much time has passed since the ensuing
ers have performed since the post-1987-Crash bear market, so it’s not surprising that the piclow (the right-most column in the table).
ture painted by the data in this table is slightly
The crucial column in this Table, from different than what emerges from Tables 1
my point of view, is the penultimate one: It and 2. Still, among the top 5 for performance
shows how these five advisers were ranked since the October 2007 high, the worst that
any of them is ranked for returns since
the March 2009 low is 47th (out of 141
Table2.Top5performerssincetheMarch2000peak
Annualizedgainsince
PerformancesinceOct'02low
monitored advisers). On average, these
Newsletter
Mar'00peak
Rank(outof103) Annualizedgain
top 5 for performance since the 2007
TheTurnaroundLetter
11.6%
8
15.3%
high
are ranked in 17th place for returns
TheInvestmentReporter
11.6%
7
15.3%
since the 2009 low. That’s remarkable.
OutstandingInvestments
11.5%
10
14.3%
Subscribers interested in submitting a
question to be answered in this space,
or in being interviewed about their experiences with investment newsletters
should send an e-mail to Mark directly
at [email protected].
2
Table1.Top5performerssincetheAugust1987peak
Annualizedgainsince
SoundAdvice
ThePrudentSpeculator
11.4%
10.2%
12
11
14.0%
14.1%
PerformancesinceDec'87low
Investment lessons
The investment lesson I draw from
these tables: Your choice of adviser to
for performance from the post-Crash low. follow for many years into the future should
Notice that each of these top performers from be independent of whether you think a bull
the pre-Crash peak is also at or very near the market top or a bear market low is imminent.
top of the ranking for performance since the And that should provide a certain amount of
post-Crash low.
solace. Your focus can shift from worrying
This is why I think many investors are plac- about when the bull market will end to picking
ing too much importance on where we are in an adviser to follow through thick and thin.
the market cycle. Even if they knew the
Table3.Top5performerssincetheOctober2007peak
answer, they still should be choosing the
PerformancesinceMar'09low
Annualizedgainsince
same adviser regardless.
Newsletter
Oct'07peak
Rank(outof141) Annualizedgain
A broadly similar conclusion emerges ForbesSpecialSituationSurvey
10.9%
17
27.4%
10.3%
4
34.2%
from Table 2, which focuses on the top MotleyFoolInsideValue
10.1%
3
38.1%
5 performers since the March 2000 bull LindeEquityReport
UtilityForecaster
9.6%
47
20.8%
market peak. The worst rank that any of MotleyFoolStockAdvisor
9.5%
12
30.2%
those top 5 has for performance since
3.4%
23.6%
the October 2002 bear market low is Wilshire5000
Wilshire5000
2.9%
9.4%
HFD
Hulbert Gold Newsletter Sentiment Index
These are times that try contrarians
souls! The sentiment conditions in the
gold market have, for several months
now, been a textbook illustration of
what contrarians associate with a
major market bottom. So far, at least,
the gold market has not responded
accordingly.
Consider the average recommended
gold market exposure level among a
subset of short-term gold market timers monitored by the Hulbert Financial
Digest (as measured by the Hulbert
Gold Newsletter Sentiment Index, or
HGNSI). This average currently stands
at minus 37.5%, which is tied for being
an all-time low for the HGNSI over its
three-decade history. The only other
time when such a low level was just a
month ago, in mid April.
Contrarians, of course, consider it to
be bullish whenever excessive levels of
pessimism and despair prevail in the
marketplace. Bull markets, after all, like
to climb walls of worry, and there is a
very strong wall right now.
The fly in the ointment is that a strong
wall of worry has existed for several
months now, and the market hasn’t
rallied. In late March, for example, the
HGNSI stood at minus 12.5%, low
enough to suggest to contrarians that
the gold market’s next major move was
more likely to be up than down. Yet
in the three weeks thereafter, gold fell
more than $200 per ounce.
Not surprisingly, the gold market’s recent response to otherwise very bullish
sentiment conditions is unprecedented,
at least in my three decades of tracking
market timers’ behavior.
Might this all mean that the gold market will rise even more strongly, once it
does finally begin to mount a significant
$2,000
80%
$1,900
60%
$1,800
40%
$1,700
20%
$1,600
0%
$1,500
-20%
$1,400
HGNSI (left axis)
Gold bullion (right axis)
-40%
12/31/10
$1,300
04/05/11
07/08/11
10/10/11
1/12/2012
rally? That certainly stands to reason,
since the current bearishness among
the gold timers means there is a lot of
sideline cash ready to jump back in and
propel the market higher.
But a review of the last three decades
doesn’t provide unambiguous support
for this hope. Just take what happened
in late April and early May, when gold
rallied some $100 in fairly short order.
You’d have thought that this was a strong
enough rally to lure a lot of that sideline
cash back into the market, and thereby
support even higher prices. But that
didn’t happen: As of press time, gold has
forfeited the bulk of that $100 increase.
Summary of other Hulbert
sentiment indices
• Broad stock market—The Hulbert
Stock Newsletter Sentiment Index
(HSNSI) stands at 70.6%, one of its highest levels in years. The HSNSI’s average
level over the last 12 months was 41.5%.
• NASDAQ Stock Market—The Hulbert NASDAQ Newsletter Sentiment
04/17/12
7/19/2012
10/19/2012
1/25/2013
4/30/2013
Index (HNNSI) stands at 93.8%, also
one of its highest levels in years. The
These are times that try contrarians
souls! The sentiment conditions in
the gold market have, for several
months now, been a textbook illustration of what contrarians associate with a major market bottom.
So far, at least, the gold market has
not responded accordingly.
HNNSI’s average level over the last 12
months was 41.8%.
• Bonds—The Hulbert Bond Newsletter Sentiment Index (HBNSI) stands
at 28.4%, after having gotten as high as
49.5% in early May. The index’s average
level over the last 12 months is 11.4%.
If you don‘t want to wait until subsequent
HFD issues for sentiment updates, you can
subscribe to daily or weekly updates. The cost
depends on the frequency of updates and how
many of the HFD’s four sentiment indexes you
desire. Contact John Kimble for more information: [email protected]
3
4
HFD
N E W S L E T T E R A N A LY S I S
The Buyback Letter
MARK’S COMMENTARY:
$10,000,000
The Buyback Letter is an attempt
to exploit one of the academicallyrecognized exceptions to the Efficient
Market Hypothesis (EMH). The EMH
has been the reigning orthodoxy for decades in university finance departments
and graduate schools, holding that the
markets are so efficient that they cannot
be consistently beaten over time. The
anomaly that is the foundation of The
Buyback Letter: Companies that buy
back shares of their stock in the open
market have, on average at least over the
past couple of decades, outperformed
companies that have not.
In The Buyback Letter, editor David
Fried attempts to do even better than
the results that have emerged from academic studies. “I’m in search of even
bigger game,” he writes. For example,
in research he has conducted, Fried
has found that he can improve on the
average performance of buyback stocks
if he concentrates on those that are in
the “value” category (which means, for
example, they have relatively low priceto-book ratios).
No explicit market timing
Fried rarely attempts any explicit stock
market timing. In fact his website states
explicitly, “we are not market timers.”
And, for the most part, his model portfolios have remained fully invested.
One exception came in mid-2007.
That’s when Fried decided to allocate a
significant percentage of his portfolios to
cash for a short period of time.
The HFD began monitoring The
Buyback Letter at the beginning of 1997.
READ MORE AT
http://on.mktw.net/15MVECa
Wilshire 5000 Total Market Index
Represented by vertical bars
(Series shifted so that the index
equals $100,000 at the point the HFD
began following newsletter)
$1,000,000
$100,000
The Buyback Letter
Average of portfolios)
Represented by line
$10,000
12/92 12/93 12/94 12/95 12/96 12/97 12/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12
PERFORMANCE (THROUGH 4/30/13)
Lifetime*
1 yr
3 yrs
5 yrs
+26.9 +53.6(15.4)
+17.0 +43.1(12.7)
+48.2(8.2)
+31.4(5.6)
8 yrs
10 yrs
15 yrs
% GAIN/LOSS**
Letter’s Average
Wilshire 5000
+530.0(11.9)
+202.1( 7.0)
+82.2(7.8) +186.9(11.1) +284.1( 9.4)
+69.7(6.8) +129.2( 8.6) +100.8( 4.8)
ADJUSTED FOR RISK***
Letter’s Average
Wilshire 5000
+0.18
+0.10
+0.54
+0.47
+0.33
+0.25
+0.15
+0.11
+0.13
+0.11
+0.20
+0.15
+0.14
+0.06
*Over entire period tracked by HFD. **Annualized equivalents are shown in parentheses.
***Average monthly % performance per unit of risk. The higher the number, the better.
PORTFOLIO ANALYSIS—4/30/13 (AVERAGE OF ALL PORTFOLIOS)
Composition: Long: 71.5%; Cash: 28.5%
Number Of Securities Held: 6
Avg. Holding Period of Current Positions: 310 days
Volatility vs Wilshire last 12 Months: 35% more
Over entire period followed: 4% less
Largest 12-Month Loss: -40.8% (vs. -43.3% for Wilshire)
David Fried
15415 Sunset Blvd. Suite 200-D
Pacific Palisades, CA 90272
1-888-289-2225
www.buybackletter.com
[email protected]
Subscription: $195/year
Frequency: Monthly
Hotline? Yes
Manages money? Yes
Investment focus: Stocks
HFD data since: 12/31/1996
Since then, the newsletter’s portfolios on
average have produced an 11.9% annualized return, in contrast to 7.0% for the
Wilshire 5000 Total Market Index. Not
only have the letter’s portfolios outperformed a buy-and-hold, they have done
so with slightly less risk than the overall
market (4% less, as you can see from the
table above). That’s a winning combination, which explains why the newsletter
also beats the Wilshire 5000 index by a
healthy margin on a risk-adjusted basis.
Fried also publishes an investment
newsletter entitled The Buyback Premium Portfolio, which the HFD began
monitoring on 1/1/2001. Since then it
has produced a 3.2% annualized gain,
in contrast to a 4.4% annualized gain for
the Wilshire 5000 and a 9.8% annualized gain for The Buyback Letter.
HFD
N E W S L E T T E R A N A LY S I S
No-Load Mut. Fund Selections & Timing
MARK’S COMMENTARY:
$10,000,000
This newsletter focuses on both fund
selection as well as market timing in
the stock, gold and bond markets.
Editor Stephen McKee’s investment
philosophy appears to be based primarily (though not exclusively) on technical
analysis.
Wilshire 5000 Total Market Index
Represented by vertical bars
(Series shifted so that the index
equals $100,000 at the point the HFD
began following newsletter)
$1,000,000
$100,000
No-Load Mutual Fund Selections & Timing Newsletter
(Average of portfolios)
Represented by line
Several model portfolios
McKee currently maintains four model
portfolios of mutual funds. Two have
existed for the entire period the HFD
has tracked the letter (since January
1990): A “Balanced” portfolio that
trades among domestic and international stock and bond funds as well as
precious metals funds; and a “Growth”
portfolio that focuses primarily on the
equity markets.
Subsequently, McKee inaugurated
three more model portfolios, and the
HFD’s data for them commences in
January 1993: an “Aggressive Growth”
portfolio (which differs from his longerlived “Growth” portfolio in that he allows this newer portfolio to take larger
bets on a particular fund or style); an
“Income” portfolio; and an “Aggressive
Income” portfolio (which has since been
discontinued).
McKee also used to offer a sixth
portfolio that focused on sector timing. Though this was discontinued in
late 2003, its performance, along with
the other now-defunct portfolio, are
included in what the HFD reports for
the newsletter’s average.
Conservative approach
All four of McKee’s current portfolios
READ MORE AT
http://on.mktw.net/181HFpt
$10,000
12/87 12/88 12/89 12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97 12/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12
PERFORMANCE (THROUGH 4/30/13)
Lifetime*
1 yr
3 yrs
5 yrs
+5.3 +19.7(6.2)
+17.0 +43.1(12.7)
+38.4(6.7)
+31.4(5.6)
8 yrs
10 yrs
15 yrs
% GAIN/LOSS**
Letter’s Average
Wilshire 5000
+551.7( 8.4)
+662.3( 9.1)
+67.2(6.6) +90.6(6.7) +141.2( 6.0)
+69.7(6.8) +129.2( 8.6) +100.8( 4.8)
ADJUSTED FOR RISK***
Letter’s Average
Wilshire 5000
+0.22
+0.13
+0.56
+0.47
+0.32
+0.25
+0.26
+0.11
+0.25
+0.11
+0.27
+0.15
+0.19
+0.06
*Over entire period tracked by HFD. **Annualized equivalents are shown in parentheses.
***Average monthly % performance per unit of risk. The higher the number, the better.
PORTFOLIO ANALYSIS—4/30/13 (AVERAGE OF ALL PORTFOLIOS)
Composition: Long: 55.3%; Cash: 44.7%
Number Of Securities Held: 7
Avg. Holding Period of Current Positions: 216 days
Volatility vs Wilshire last 12 Months: 74% less
Over entire period followed: 58% less
Largest 12-Month Loss: -13.1% (vs. -43.3% for Wilshire)
Stephen L. McKee
P.O. Box 830396
Richardson, TX 75083
1-800-800-6563
www.investmentst.com
[email protected]
Subscription: $180/year
Frequency: Monthly
Hotline? Yes
Manages money? No
Focus: Mutual funds
HFD data since: 12/31/1989
have incurred less volatility (or risk) than
the stock market as a whole. In fact, the
riskiest has been McKee’s “Aggressive
Growth” portfolio, which despite being
the riskiest, has been 39% less risky than
the Wilshire 5000 Total Market Index.
Given this below-market risk, and
the stock market’s tendency over the
long-term to rise, one would expect
the newsletter’s average portfolio to lag
the Wilshire 5000 Total Market Index
over the long term. In fact, however, the
newsletter has nevertheless come close
to equaling the market’s return—gaining
8.4% (annualized) since the beginning
of 1990 vs. 9.1% for the overall stock
market. Once this performance is adjusted for this low risk, the newsletter is
well ahead of the Wilshire 5000 Total
Market Index.
5
6
HFD
N E W S L E T T E R A N A LY S I S
The Turnaround Letter
MARK’S COMMENTARY:
$10,000,000
As its title suggests, The Turnaround
Letter focuses on companies that editor George Putnam believes will soon
recover from a previous period of bad
news and depressed prices. His focus
sometimes leads to recommending
stocks that are in bankruptcy proceedings. Indeed, Putnam maintains
a comprehensive database on public
companies that currently are in, or are
emerging from, bankruptcy.
Putnam segregates his newsletter’s
recommendations into three categories:
“Small-Cap,” “Mid-Cap” and “LargeCap.” In each issue, he provides buyhold-sell advice for each of his open
recommendations that have yet to be
closed out. Because he does not advise
subscribers on the proper division of
their equity portfolios between stocks
and cash, the HFD constructs each of
these three portfolios so that they are
kept fully invested at all times in the
securities that Putnam rates a “buy,”
and divided equally among all such
positions.
Prior to September 2004, Putnam
segregated his newsletter’s recommendations into three different categories:
“Aggressive,” “Moderate Risk,” and
“Conservative.” The HFD treats the
newsletter’s three current categories
(“Small-Cap,” “Mid-Cap,” and “LargeCap”) as successors to those three discontinued ones.
Very high risk
As might be expected, portfolios fully
invested in “turnaround” situations will
tend to be much more volatile, or risky,
READ MORE AT
http://on.mktw.net/YW6Vgg
Wilshire 5000 Total Market Index
Represented by vertical bars
(Series shifted so that the index
equals $100,000 at the point the HFD
began following newsletter)
$1,000,000
$100,000
The Turnaround Letter
(Average of portfolios)
Represented by line
1980 results reflect last 6
months of the
year only
$10,000
6/80 6/81 6/82 6/83 6/84 6/85 6/86 6/87 6/88 6/89 6/90 6/91 6/92 6/93 6/94 6/95 6/96 6/97 6/98 6/99 6/00 6/01 6/02 6/03 6/04 6/05 6/06 6/07 6/08 6/09 6/10 6/11 6/12
PERFORMANCE (THROUGH 4/30/13)
Lifetime*
1 yr
3 yrs
5 yrs
+32.4 +45.2(13.2)
+17.0 +43.1(12.7)
+50.4(8.5)
+31.4(5.6)
8 yrs
10 yrs
15 yrs
% GAIN/LOSS**
Letter’s Average +1,831.7( 12.4)
Wilshire 5000
+1,061.3( 10.2)
+95.6(8.7) +245.6(13.2) +303.5( 9.7)
+69.7(6.8) +129.2( 8.6) +100.8( 4.8)
ADJUSTED FOR RISK***
Letter’s Average
Wilshire 5000
+0.13
+0.14
+0.65
+0.47
+0.20
+0.25
+0.12
+0.11
+0.11
+0.11
+0.16
+0.15
+0.12
+0.06
*Over entire period tracked by HFD. **Annualized equivalents are shown in parentheses.
***Average monthly % performance per unit of risk. The higher the number, the better.
PORTFOLIO ANALYSIS—4/30/13 (AVERAGE OF ALL PORTFOLIOS)
Composition: Long: 100%
Number Of Securities Held: 18
Avg. Holding Period of Current Positions: 902 days
Volatility vs Wilshire last 12 Months: 30% more
Over entire period followed: 69% more
Largest 12-Month Loss: -59.8% (vs. -43.3% for Wilshire)
George Putnam, III
1212 Hancock St., Suite LL-15
Quincy, MA 02169
800-468-3810
www.turnaroundletter.com
[email protected]
Subscription: $195/year
Frequency: Monthly
Hotline? No
Manages money? Yes
Investment focus: Stocks
HFD data since: 12/31/1987
than the stock market as a whole. This
newsletter’s portfolios are no exception.
Even its “Large-Cap” portfolio, which is
the most conservative of the newsletter’s
three, has been 46% more volatile than
the Wilshire 5000 Total Market index.
The letter’s “Mid-Cap” portfolio has
been 87% riskier, and its “Small-Cap”
portfolio has been particularly speculative, incurring 153% more volatility, or
risk.
Despite the high risk, this newsletter
nevertheless has managed to beat the
stock market—thereby beating the odds
that high-risk strategies will eventually
stumble badly. Since the beginning of
1988, the newsletter’s portfolios on
average have gained 12.4% annualized,
in contrast to the Wilshire 5000 index’s
10.2%.
HFD
Scoreboard for Mutual Fund Newsletters
The rankings below show which mutual fund newsletters (or fund portfolios from non-mutual-fund newsletters)
have performed the best. A newsletter’s ranking is based on an average of its fund portfolios in the event it recommends several. These scoreboards follow the same format as those on page 8.
15 YEARS (27 newsletters tracked)
see more at http://bit.ly/aIKqn1
RISK-ADJUSTED RANKING
RANK
UNADJUSTED
RATING NEWSLETTER
1
0.19
2
0.15
3
0.14
4
0.13
5
0.12
6
0.11
7
0.11
BENCHMARKS
0.06
0.00
RISK
No-Load Mutual Fund Sel. & Timing
34.8
Bob Brinker’s Marketimer
76.4
InvesTech Research Portfolio Strategy
65.7
No-Load FundX
104.3
Investors Intelligence
52.8
Independent Adviser for Vanguard Invs. 83.5
Moneyletter
87.8
6.0%
8.3%
7.5%
9.1%
5.7%
6.9%
7.1%
Wilshire 5000 Total Return
T-Bill Portfolio
4.8%
2.4%
100.0
3.5
10 YEARS (41 newsletters tracked)
0.27
0.25
0.24
0.22
0.21
0.20
0.18
RANK
DATA BEGAN
14
2
4
1
17
8
6
1990
1987
1986
1980
1987
1992
1987
RISK
UNADJUSTED
GAIN
RANK
No-Load Mutual Fund Sel. & Timing
InvesTech Research Portfolio Strategy
Sector Navigator
Fidelity Navigator
Closed-End Country Fund Report*
No-Load Navigator
Personal Finance
35.6
79.8
68.6
60.6
156.3
61.1
81.6
6.7%
11.8%
10.1%
8.4%
16.9%
7.8%
9.0%
Wilshire 5000 Total Return
T-Bill Portfolio
100.0
3.4
8.6%
1.6%
DATA BEGAN
26
2
6
16
1
21
11
1990
1986
2003
2002
1994
2002
1989
BENCHMARKS
0.15
0.00
5 YEARS (53 newsletters tracked)
see more at http://bit.ly/d2YrFp
RISK-ADJUSTED RANKING
RANK
RATING NEWSLETTER
1
2
3
4
5
6
7
0.30
0.26
0.26
0.19
0.18
0.17
0.16
RISK
National Trendlines
No-Load Mutual Fund Sel. & Timing
Brinker Fixed Income Advisor
Fosback’s Fund Forecaster
Sector Navigator
InvesTech Research Portfolio Strategy
The Mutual Fund Strategist
UNADJUSTED
GAIN
RANK
13.0
37.2
37.8
67.5
64.4
77.3
51.6
2.9%
6.7%
6.7%
8.4%
7.4%
7.9%
5.4%
100.0
0.7
5.6%
0.3%
DATA BEGAN
32
5
6
1
4
2
11
1994
1990
2005
2003
2003
1986
1985
BENCHMARKS
0.11
0.00
Wilshire 5000 Total Return
T-Bill Portfolio
* Newsletter hasn’t published since 2004, though not formally discontinued.
Market exposure among market timers
The following reports the average percentage market exposure as of 4/30/13 among market timers
in the stock, gold and bond markets. Please note:
Each market’s reading is independent of the others;
there is no expectation that they add up to 100%.
GREEN number indicates the average among those
who have beaten a buy-and-hold over the last ten
years on a risk-adjusted basis.
BLUE number indicates the average among all
timers the HFD follows.
STOCKS 90%
GOLD
Hulbert Interactive
The online research tool that provides 24hour access to the HFD’s database containing 32+ years’ worth of performance data,
along with the stock and fund picks from
hundreds of newsletters.
Visit: http://bit.ly/bf47dI
Individual Newsletter Profiles
Performance profiles of the nearly 200
newsletters the HFD tracks are now included
in a subscription to Hulbert Interactive.
About HFD
see more at http://bit.ly/aN2Tov
RISK-ADJUSTED RANKING
RANK
RATING NEWSLETTER
1
2
3
4
5
6
7
GAIN
Other Ways of
Accessing HFD Data
65%
n/a
0%
BONDS 100%
60%
READ MORE AT
http://bit.ly/9tjHYp
The Hulbert Financial Digest (ISSN:
10424261) is published monthly by The
Hulbert Financial Digest Inc., 8001
Braddock Road #107, Springfield, VA
22151. The HFD is a service of Marketwatch, Inc. An introductory subscription (for first-time subscribers only, via
e-mail) is $59; the regular price is $89
per year.
Subscription-related questions
should be directed to 1-888-HULBERT
or, via e-mail, to “orders@marketwatch.
com”
Mark Hulbert, Editor; John Kimble,
Chief Portfolio Analyst; Ruthanne
Teates, Portfolio Analyst; James Sterns,
Portfolio Analyst; Alycia Lutz, Portfolio Analyst. (Copyright © 2013 by The
Hulbert Financial Digest, Inc.) The HFD
is based on information and research
believed to be reliable, but its accuracy
cannot be guaranteed. The HFD, its editors, and its writers cannot be responsible for errors and omissions.
The HFD’s purpose is to provide
objective performance data on various
investment strategies. The HFD is not
affiliated with any of the investment
newsletters it rates; nor does the HFD
endorse the use of its name in advertising. The HFD cautions readers to be
skeptical of editors’ characterizations of
their HFD ratings, as we cannot police
such use.
To keep subscription rates low, the
HFD periodically rents its mailing list.
Telephone marketing is strictly prohibited. Any subscriber who wishes his/
her name not be rented should contact
us. This rental is administered by an
outside firm, and the HFD plays no role
in approving or disapproving a request
for rental or the content of promotional
material. Subscribers therefore should
not interpret any direct mail advertising—including those to HFD readers or
those that refer to advertisers’ HFD ratings—as enjoying an HFD endorsement.
7
MOST POPULAR STOCKS
Overall Performance Scoreboard
CURRENTLY OWNED BY MOST LETTERS
The rankings below show which newsletters that the HFD follows have performed the best, on both a total return and
a risk-adjusted basis, over various lengths of time through April 30, 2013. (Page 7 contains a special ranking of just
mutual fund letters and portfolios.) A letter’s ranking is based on an average of its several portfolios in the event it
recommends more than one (including any the letters may have discontinued). You can find 15- and 25-year rankings
at http://bit.ly/lZOfxl and http://on.mktw.net/YJXm1N, respectively.
20 YEARS (51 newsletters tracked)
see more at http://bit.ly/9Zd8Jv
RISK-ADJUSTED RANKING
RANK
1
2
3
4
5
6
7
UNADJUSTED
RATING NEWSLETTER
0.24
0.18
0.18
0.17
0.17
0.17
0.16
No-Load Mutual Fund Sel. & Timing
The Investment Reporter
Bob Brinker’s Marketimer
The Prudent Speculator
Utility Forecaster
No-Load FundX
Independent Adviser for Vanguard Invs
RISK
GAIN
39.9
115.7
78.7
174.5
71.4
104.4
83.3
8.1%
13.4%
10.1%
16.5%
9.1%
11.5%
9.6%
100.0
3.8
8.9%
3.0%
RANK
20
2
5
1
10
3
7
DATA BEGAN
1990
1984
1987
1980
1993
1980
1992
15
Apple (AAPL)(25)
1 5 10 Microsoft (MSFT)(20)
15
Intel (INTC)(17)
5 10 Pfizer (PFE)(17)
1 5 10 AT&T (T)(15)
1 5 10 Johnson & Johnson (JNJ)(15)
1 5 Chevron (CVX)(14)
Plains All Amer. Pipeline (PAA)(14)
5 10 Cisco (CSCO)(13)
1 5 10 IBM (IBM)(13)
1
See more at http://bit.ly/a4ABl6
BENCHMARKS
0.13
0.00
Wilshire 5000 Total Return
T-Bill Portfolio
10 YEARS (109 newsletters tracked)
RANK
1
2
3
4
5
6
7
UNADJUSTED
RATING NEWSLETTER
0.35
0.27
0.26
0.24
0.24
0.23
0.22
LEAST POPULAR STOCKS
RISK
GAIN
Utility Forecaster
No-Load Mutual Fund Sel. & Timing
InvesTech Research Portfolio Strategy
Sector Navigator
The Successful Investor
Global Investing
The Oxford Club
59.5
35.6
75.0
68.6
125.8
126.7
91.9
12.6%
6.7%
11.7%
10.1%
16.4%
16.0%
12.0%
Wilshire 5000 Total Return
T-Bill Portfolio
100.0
3.4
8.6%
1.6%
RANK
13
65
19
26
3
4
16
DATA BEGAN
1993
1990
1984
2003
2002
1994
1995
BENCHMARKS
0.15
0.00
5 YEARS (139 newsletters tracked)
1
2
3
4
5
6
7
See more at http://bit.ly/bXNvKj
RISK
GAIN
National Trendlines
Utility Forecaster
No-Load Mutual Fund Sel. & Timing
Brinker Fixed Income Advisor
Motley Fool Inside Value
The Value Line Convertibles Survey
Morningstar Dividend Investor
13.0
56.6
37.2
37.8
110.9
60.1
79.8
2.9%
10.5%
6.7%
6.7%
14.5%
8.2%
10.2%
Wilshire 5000 Total Return
T-Bill Portfolio
100.0
0.7
5.6%
0.3%
RANK
71
10
28
29
1
19
11
CURRENTLY OWNED BY MOST LETTERS
DATA BEGAN
1994
1993
1990
2005
2004
1986
2005
BENCHMARKS
0.11
0.00
MOST POPULAR FUNDS
UNADJUSTED
RATING NEWSLETTER
0.30
0.28
0.26
0.26
0.21
0.21
0.20
10 Apogee Enterprises(APOG)(3)
Celgene (CELG)(3)
EMC Corp (EMC)(3)
5 10 Halliburton (HAL)(3)
1
IBM (IBM)(3)
iShares Russell 2K (IWM)(3)
1
Johnson & Johnson (JNJ)(3)
1
Microsoft (MSFT)(3)
Unitedhealth Group (UNH)(3)
5
see more at http://bit.ly/d6ePRz
RISK-ADJUSTED RANKING
RANK
MOST SHORTED, OR MOST DOWNGRADED, OVER LAST MONTH
see more at http://bit.ly/9YMaDe
RISK-ADJUSTED RANKING
Qualcomm (QCOM)(13)
Wal-Mart (WMT)(13)
1 10 Vang. Div. Growth (VDIGX)(9)
5 Doubleline TR Bond (DLTNX)(8)
1 5 Fid. Spartan High Income (SPHIX)(8)
1 5 Vang. GNMA (VFIIX)(8)
5
Vang. IT Inv. Grade (VFICX)(8)
1 5 Vang. ST Inv. Grade (VFSTX)(8)
5 10 Vang. Total Stock Market (VTSMX)(8)
10 Wasatch Int’l Growth (WAIGX)(8)
Vang. Index 500 (VFINX)(7)
1 5 Vang. Inflation Prot. Bond (VIPSX)(7)
Vang. REIT Index (VGSIX)(7)
Glossary
See more at http://bit.ly/9VaaFR
Risk-Adjusted Rank—This reports what the letter’s rank
would be if all were ranked on a risk-adjusted basis.
risk level above 100 means the letter was riskier than
the Wilshire 5000. A lower number is preferable.
Risk-Adjusted Rating—Monthly performance per unit
of risk, calculated using the Sharpe Ratio. Other things
being equal, a higher number here is preferable.
Unadjusted Gain—The newsletter’s total return (annualized), before adjusting for risk.
1
Unadjusted Rank—The newsletter’s rank when ranked
on basis of performance before risk adjustment.
5
Ranks in top ten among those letters
beating market over trailing 1 year
Ranks in top ten among those letters
Data Began—The year HFD began monitoring this
newsletter’s performance.
10
beating market over the last 5 years
Ranks in top ten among those letters
Risk—Risk, as measured by volatility. All letters’ risk
levels are normalized so that the risk level of the
Wilshire 5000 Total Market Index becomes 100. Thus, a
KEY
beating market over the last 10 years