Richard Geist of Richard Geist's Strategic Investing was down 28.9% in the same period, largely from betting too much on one stock that turned out to be a huge loser, Geist says. Solv-Ex, which made up about 20% of his portfolio, fell from a high of $19.50 to 62.5 cents last year.
Hulbert's Bottom Five for:
Eleven months Richard Geist's Strategic Investing, 28.9%; Natural Contrarian, 31.2%; ODDS Oex Fax Hotline, 32.8%; Ground Floor, 45.4%; Futures Hotline/Mutual Fund Timer, 76.3%.
Advisers never at loss for excuses for getting trampled in bull market
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New York When you're No. 1, you hire a skywriter to announce the news. When you're in last place, though, you bury the evidence and keep your mouth shut. Unless your bad standing gets found out. Then, you denounce the judge of your work.
A publication called The Hulbert Financial Digest, which puts out a monthly ranking of the best performers among investment newsletters, is such a judge. And its editor, Mark Hulbert, gets denounced regularly.
The Hulbert digest typically emphasizes the most talented investment advisers.
But the public is exposed to the advertising pitches of letter writers good and bad. So Bloomberg News goes each year to Hulbert for a rundown of the bottom rankers who blew it over periods of one, five and 10 years.
It is an exercise that never fails to result in long-winded attacks on the publication and its editor.
For the shortest time period (the 11 months that ended Nov. 30), losers say they were hit hard for a range of reasons.
Yale Hirsch of Ground Floor says that carnage among natural resources stocks sent his returns down 45.4% while the Wilshire 5000 index a broad measure of stocks large and small gained 28%.
Richard Geist of Richard Geist's Strategic Investing was down 28.9% in the same period, largely from betting too much on one stock that turned out to be a huge loser, Geist says. Solv-Ex, which made up about 20% of his portfolio, fell from a high of $19.50 to 62.5 cents last year.
Other 11-month losers included one who says he landed on the five-worst list because of the way Hulbert calculates commissions.
Donald Fishback, whose ODDS Oex Fax Hotline was down 32.8% by Hulbert's calculations, admits 1997 was not a great year for his letter. That's because "rising volatility works against me, and that's what we've had this year," he explains.
By Fishback's account, though, his returns would have been down only 3.5% in the first 11 months of 1997 had Hulbert used more realistic commission charges. He and Hulbert "are in the process of trying to resolve" their dispute, Fishback says.
Hulbert's commission "charges" have been the stuff of many disputes over the years. Stock traders have accused him of under-calculating options commissions; options traders have countered that stock traders get too much of a break.
Bernard Schaeffer, editor of Option Advisor, is on two of the five-worst lists, down an annualized 8.9% over five years (the Wilshire 5000 was up 19.3%) and 8.2% over 10 years ending Nov. 30 (the Wilshire was up 18.2%).
He says Hulbert subtracts 3% for commissions from each options trade, and that's too much.
"Even if he reduced it to 2%, both the numbers would be positive," he says.
Others on the blooper list this year take their lumps and admit to bad markets or bad decisions.
"It's been a really miserable five years," says Michael Murphy of Overpriced Stock Service, which specializes in finding stocks whose prices will decline.
Murphy's short sellers' portfolio lost an annualized 35.8% over the past five bull-market years, Hulbert says. But another Murphy newsletter that specializes in long stock recommendations is in the top five for a 14-year period, Hulbert confirms.
Despite his uncomfortable spot on the five-year "worst" list, Murphy is willing to say Hulbert is a fair operator who has helped push the investment newsletter industry to become more honest about performance. Others on the stinky list, though, sound suspicious and sometimes bitter about Hulbert.
"There was a time four or five years ago when I decided to trade commodities for a six-month period" and lost badly, says P.Q. Wall, whose P.Q. Wall Forecast is down 15.3% annually in Hulbert's five-year calculations.
That one period, Wall says, continues to drag down his long-term performance unfairly, and subscribers who followed the advice on his telephone hot line "tripled or quadrupled their money" this year.
Joseph Granville of The Granville Market Letter, down an annual rate of 25.4% over five years and 5.0% over 10, says, "I'm always going to look bad in Hulbert's book" because his seasoned letter has been rated by Hulbert since 1980, thus exposing him to more potential down periods in Granville's view.
(Why that wouldn't mean more exposure to up periods, too, can be left to the imagination of the investor).
James Dines, editor of the Dines Letter (down 4.6% a year over 10 years) says Hulbert's numbers are wrong but refuses to provide his own performance number.
"The truth is, there might be legal action, so I'm not going to put my numbers on the table," he says.
Hulbert's methods "are considered crackpot by the newsletter industry," he adds, an allegation that does not even win unanimous support among those who did worst in the most recent periods.
(Hulbert's view: The criticisms are sufficiently weak to persuade him his critics are "grasping at straws.")
Hulbert's Bottom Five for:
Eleven months Richard Geist's Strategic Investing, 28.9%; Natural Contrarian, 31.2%; ODDS Oex Fax Hotline, 32.8%; Ground Floor, 45.4%; Futures Hotline/Mutual Fund Timer, 76.3%.
Five years (annualized) Option Advisor, 8.9%; P.Q. Wall Forecast, 15.3%; The Granville Market Letter, 25.4%; Overpriced Stock Service, 35.8%; Futures Hotline/Mutual Fund Timer, 68.5%.
Ten years (annualized) Growth Fund Guide, +2.9%; Professional Tape Reader, +0.3%; The Dines Letter, 4.6%; The Granville Market Letter, 5.0%; Option Advisor, 8.2%.
(Copyright 1998) |
