Better luck next time Jim McCamant:
(see bold)
Money Talk: Investors can now find out how good stock experts are
Web site: Next time you hear a pundit give a tip, you'll be able to check his or her record. MONEY & MORE
Hank Ezell - Staff
Sunday, March 4, 2001
The woods is full of expert stock pickers. Unfortunately, so are the magazines, the airwaves and the Internet.
Hundreds of wise men and women are out there telling us ''Ten Stocks to Buy Now,'' ''Five Mutual Funds for the New Year'' and endless ways to get rich.
We know, of course, that some of those pundits are worth listening to. We also know that some of them have indeed gotten rich, perhaps from their own investments and perhaps from yakking at us about getting rich.
Now it's possible to find out, at least in a rough way, how good all those smooth talkers really are.
The next time you're tempted to buy a stock touted by a media-enhanced expert, mosey over to www.validea.com and look into the record of your expert.
The Web site is a database covering hundreds of stockbrokers and media figures. Each one has touted a number of stocks through investment magazines, TV channels such as CNBC, or well-known investor Web sites.
Validea aims to record each recommendation, then track how the stock does in following weeks and months.
All those results are combined, yielding average return figures for each expert.
You can ask, for example, for a roster of top-performing experts over the last 12 months. Validea will also display each expert's most recent stock selections, his most successful picks and his biggest turkeys.
The Web site is not perfect. Hundreds of stock pickers are included, but some very good ones are not.
You won't find Rudolph Kluiber, manager of State Street Research Aurora C fund, for example. Over the last five years, the fund has averaged an annual total return of nearly 28 percent, according to Morningstar. But he is not recorded on validea, perhaps because he has not announced any stock selections on the 30 media outlets tracked by that Web site.
That brings up another shortcoming: Validea covers only recommendations that show up in those nationally known media. Any other big winners --- or losers --- will not be reflected in validea.
Edwin Walczak reported a five-year average annual return of 16.8 percent for shareholders in the Vontobel U.S. Value fund. But his record on validea is only 7.9 percent.
Still, the Web site has its uses.
You can weed out great investors in high-risk fields, if you're scared of dot-com stocks, for example. Or you can get an early warning about stock touts who have downright terrible records. It's a good idea to look at results over every time period validea covers.
You can keep up with the most recent recommendations made by any of the experts. You can register for reports on new stock picks by your chosen specialists. There's also a daily update of new stock picks from all the experts.
Through a link to zacks.com, you can build your own stock screens, using dozens of variables.
It's a fool's game, but you can start tracking how recommended stocks performed in the week after they were named. That might help locate experts who really shake up prices. But you're aiming toward a get-rich-quick investment scheme, and that is almost always a mistake.
Validea ranks publications, as well as individual brokers and media stars.
Last week the top online resources, based on full-year returns from their stock selections, were www.individualinvestor.com, MSN MoneyCentral (www.investor.com) and www.barrons.com.
Among magazines, the top three are Individual Investor, Money and Fortune. As with individual experts, each media listing includes most recent picks, big winners and most appalling losers.
Now for the big question: Who are the best individual stock pickers?
Based on one-year returns, the leader is Dan K. Scovel, a semiconductor analyst at Needham & Co. His most recent selection was Cypress Semiconductor on Feb. 8.
His stocks appreciated 308.4 percent in the first year after he named them, says validea.com.
First runner-up was James McCamant, editor-at-large of the Medical Technology Stock Letter. His most recent pick was Axys Pharmaceuticals.
How about the truly big names?
Peter Lynch is in the database, but he's unrated because he hasn't recommended enough stocks in the national media.
His most recent selections date back to March 2000, according to validea.
The same holds for Warren Buffett. His only recorded recommendation was Wm. Wrigley Jr. Co., in September 1999.
So what's it all worth? If you're a short-term trader, you can keep track of the very latest touts from the very best-known experts.
If you take a longer view, validea is a good place to start. But it's like New York City --- you wouldn't want to live there.
GURUS: THEIR TRACK RECORDS
ABBY JOSEPH COHEN
One-year performance: 38.8 percent
Occupation: Goldman Sachs analyst
Most recent picks:
Coach Inc.
Amdocs Ltd.
Applied Materials
Ecolab
Metlife
Published in Barron's Jan. 20
MARY FARRELL
One-year performance: 16.1 percent
Occupation: Investment strategist at Paine Webber
Most recent picks:
Cisco Systems
JDS Uniphase
Bank of New York
Citigroup
Announced on "Wall Street Week," Feb. 23
JOHN B. NEFF
One-year performance: 15.6 percent
Occupation: Retired, longtime manager of Vanguard's Windsor Fund
Most recent picks:
Ultramar Diamond Shamrock
M/I Schottenstein Homes
Arrow Electronics
Delta Air Lines
Announced on CNBC, Feb. 23
THE MOST-TALKED-ABOUT STOCKS
In the past week, these stocks got the most mentions from the stock pickers:
Microsoft: 11 positive, three negative
Cisco Systems: 10 positive
EMC Corp.: Seven positive
Brocade Communications: Four positive, two negative
IBM: Six positive
ON THE WEB
An alternative stock-screening mechanism is at: www.quicken.com/investments/stocks/search/
For rankings of stock brokerages, rather than individual brokers, go to: www.gomez.com
--From the Atlanta Journal-Constitution
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