Fat Prophets - opinions?

[RichKid]

Re: MA's and Fat Prophets- starlight & snake pliskin

Snake pliskin, i think it is a good idea to discuss about Fat prophets recommendations... to get others' opinions. i hold GGN, one of their recommendations. Got them at 33 cents and was glad there are finally some up movement after 2 months. Telstra was a disaster.

how about yourself?

note: would we start a new thread instead?

Hi Kerosam,
I was thinking of starting a new thread and then realised it would be easier to merge this thread with an existing one on fat prophets, so here we are, all the fat prophets discussion in one thread. There's also a thread on the Fat Prophets listed investment company (LIC) called the 'fat fund' in the ASX stock chat forum: https://www.aussiestockforums.com/forums/showthread.php?t=967&highlight=fat+fund.

 

[kerosam]

personally, reading and obtaining recommendations from research companies such as Fat Prophets helped me understand a bit on T/A and F/A and charting.... as a newbie who got no idea of investing or trading, info from these research companies do give me some bit of education and some directions... imho.

anyhow on Fat Fund, did bought them at $1 NTA was then 98 cts, now its about $1.03 or something... sold them to buy some specs. each and every month fat prophets inform holders on new buys and so forth (and their reason for the investment)... FATS was 93 cts few months ago and bounced back to 97 t 98cts range.... yet to see it hit above $1.05.

 

[carpets]

Re: Fat Prophets - Opinions

personally, reading and obtaining recommendations from research companies such as Fat Prophets helped me understand a bit on T/A and F/A and charting.... as a newbie who got no idea of investing or trading, info from these research companies do give me some bit of education and some directions... imho.

Ive been following the fat prophets reports for about a 2 years, and as a relatively new investor in the stock market, their research has been pretty good. I usually buy on most of their recommendations, but have been stung a few times (most recently on MSC). From my limited experiece, (and i think most people will tell you this!) you need to conduct your own research and make your own judgements on whether a stock is worth investing in. Its encouraging to look at some of the success stories from the guys at fat and also to look at their annualised returns on all of the stocks they invest in. Its worth noting they have only been in the red a few times over the entire time they have been putting out their recommendations.
For me, its been a good starter to know what stocks are worth looking at and to have some experienced (or more experienced than me) people give what seem, accurate reports and recommendations.
Carpets.

 

[RichKid]

I'd like to see the fat prophets recommendation history put to the test using the vital stats we use to calculate expectancy etc and see it all as an equity curve with a full system test. If any current subscriber is able to do that that'll be great, I'm sure people like TechA will be happy to help as he loves fiddling with this stuff.

 

[kerosam]

richkid, how do you intend to do that? I can check out their history of buy and sell of stocks, if that's what you mean.

 

[tech/a]

Rich

In "Safe Stratagies for Financial Freedom" by Van Tharp,Barton and Sjuggerud

They explain "How" to trade newletters and stock picking services.
Combine their principals with that of Radges in his book
"Adaptive Analysis" and I believe that any fundamental trader can be very profitable.

 

[Milk Man]

In "Safe Stratagies for Financial Freedom" by Van Tharp,Barton and Sjuggerud

They explain "How" to trade newletters and stock picking services.
Combine their principals with that of Radges in his book
"Adaptive Analysis" and I believe that any fundamental trader can be very profitable.

Ive heard this reffered to as fishing. I wonder if these newsletter punks hold their small cap recommendations before they ramp them in their newsletters. That would be illegal would it not?

That Rivkin's nose must be pretty sore since he picks winners 70% of the time. :

 

[RichKid]

richkid, how do you intend to do that? I can check out their history of buy and sell of stocks, if that's what you mean.

We'd just need the vital stats (ie entry price, date, exit price, capital allocated (fp have criteria by which they measure their performance- ie $2k a pop etc). Start at inception, all the past reports are there. This is only for a dedicated systems tester/student as it'll take time, I'm happy to chip in with manual data entry type stuff as we can just share a spread sheet or something around, I don't have the experience or skills to do it all- we'd best do it offline or by email/pm. It'll take the subscriber time to record all the details (I don't subscribe), maybe we can just do it upto the end of the last financial year or end of this calendar year. The software can then filter the results (eg performance by closed trades only, or performance for financial year or calendar year, maximum drawdown etc)

I was intrigued by what Nick Radge had in his book about how a tip sheet boasted it had 70% accuracy (winners) etc but had no positive expectancy. I'm keen to see how the prophets measure up- it'll probably help subscribers too as they'll know where they stand.

Tech,
Thanks, I've also noted Guppy's suggestions in his books, I'm keener on Nick's views but would use a tip sheet as the universe to focus on before filtering out some to find low-risk set ups. Most tip sheets have the same stocks anyhow.

 

[kerosam]

richkid,

i'll see what i can do... i just want to make sure that the info provided will not be unfair to prophets subscribers and the prophets themselves. will probably do it thru email....

note: might take a while.

 

[tech/a]

Tech,
I'm keener on Nick's views but would use a tip sheet as the universe to focus on before filtering out some to find low-risk set ups. Most tip sheets have the same stocks anyhow.

You can use the first 55 pages of Nicks book (The Holy grail of the book in my view) when trading ANY trading methodology even selections from investment newsletters.

 

[RichKid]

I wonder if these newsletter punks hold their small cap recommendations before they ramp them in their newsletters. That would be illegal would it not?

The prophets do have list of them (they list the stocks) it's in the disclosure section but they don't say when they bought or sold or anything else- guess we're just suckers.

 

[RichKid]

richkid,

i'll see what i can do... i just want to make sure that the info provided will not be unfair to prophets subscribers and the prophets themselves. will probably do it thru email....

note: might take a while.

It sure will be time consuming but then you'll know how to better manage their picks- you're just applying the mgmt/mathematical analysis methods mentioned by Nick in his book (as Tech says) but we need to do the stats first.
I don't think we should have it public either (ie details of recs) as it would clearly be unfair to paying subscribers. Just figures would help with maybe equity charts, if at all.

PM if you need help and I'll chip in via email. Glad you have experience in testing etc so you'll know what to do. Keen to see how they measure up as they have one of the leading 'headline' percentage returns in the tipping sector, and they are not cheap.

 

[Dan_]

Here's a brief summary of some of the Fat Boys picks thanks to E*Trade

I checked this before and there were a lot of negatives prior to this summary.

I just dumped into excel and tidied it up a little

 

[mlennox]

mega if your short on time divise a purely technical trading strategy based around say 5 indicators will cost you 30mins a night, ive made over 40% since august trading a system like this, short position times 1day to a week

 

[RichKid]

Here's a brief summary of some of the Fat Boys picks thanks to E*Trade

I checked this before and there were a lot of negatives prior to this summary.

I just dumped into excel and tidied it up a little

Thanks Dan, very interesting, obviously it'll take a lot of work to fully analyse their work...I'm sure they've got figures themselves locked away somewhere.

 

[michael_selway]

Here's a brief summary of some of the Fat Boys picks thanks to E*Trade

I checked this before and there were a lot of negatives prior to this summary.

I just dumped into excel and tidied it up a little

Hi thanks, do u have the lastest version?

also what does it mean by "greyhound/cattledog/labrador"?

Thanks

MS

 

[RichKid]

Hi thanks, do u have the lastest version?

also what does it mean by "greyhound/cattledog/labrador"?

Thanks

MS

The fp site has explanations in the free section.

 

[kerosam]

I've picked their top 3 and bottom 3 (in returns). I've also omitted those companies that went broke. Not in any order:

Company Buy Sell

MSC $0.154 $ 0.029
TMS $0.75 $0.085
SBM $0.22 $0.045

MCC $1.25 $6.60
AHD $2.04 $4.33
CTX $2.15 $8.72

They have a new mining and resource section. If you are a subscriber, check it out.

 

[bunyip]

Fat Profits policy of buying in gloom and selling in boom might be OK for a long term investor, but its not a sound policy for an active trader. Depends on what you want to be.....trader or investor. There's a big difference between the two.

Regardless of how bright the future prospects of a stock might be, as an active trader I can't think of a worse strategy than buying a stock that's drifting aimlessly, going nowhere, or worse still heading south. And then hanging on and hoping, (for God knows how long) that it's price is going to turn around and start giving me a decent return on my investment.
Similarly, I can't think of a worse strategy than selling a stock because its booming. If its trending strongly in the right direction, the prudent policy is to ride the trend as long as it continues (which is usually much longer than most people think it will be), and keep moving your trailing stop progressively higher so as to lock in increasing amounts of profit.
Limiting your losses and letting your profits run are two of the most profit- enhancing tactics that traders can use. This strategy virtually ensures that your average winner will be substantially larger than your average loser, yet few traders stick to this commonsense policy. Most of them do it the other way around......they take big losses but grab small profits too quickly before they have a chance to turn into big profits.

Some people subscribe to trading recommendation style newsletters in the belief that they themselves don't have the time to do the analysis.
But how much time does it really take to run a scan with your charting software to find strongly trending stocks that are currently retracing for a few days. Such stocks supply you with a list of candidates to put on a 'red alert' watchlist, so that you can buy them as they finish their retracement and resume their uptrend.
This type of analysis can be done on a couple of hundred stocks in about half an hour a day. Or in about an hour once a week, if you work from weekly charts. And its easy to learn how to do it......there are heaps of books available to show you how.

Fat Profits and trading newsletters in general get the thumbs down from me.
Learn how to do the analysis yourself, get yourself the right software to help you do it......its not hard to outperform the newsletters if you put a bit of time and effort into learning your craft. And it doesn't have to be a time consuming activity either.

Bunyip

 

[bunyip]

Mega.....You wrote:

"Researching stocks takes a lot of time and it prevents me from doing other things."

I agree - researching stocks is time consuming.
But there's a simple solution to your problem.....don't do any research. There's no need to - tens of thousands of traders and investors have already done the research for you, and their findings are reflected in the trend of the stock.

AMP fell from $13 to $3 between March 2002 and August 2003. Shortly after it's downtrend began it was patently obvious, even to someone of little experience in chart reading, that the stock was heading south east on the chart.......a downtrend.
Why was it downtrending? Because traders and investors were quitting the stock en masse.
Why would they do that? Because tens of thousands of them had researched the company and found out that it was in trouble, and it's future prospects were none too bright.
In which case, you could have made money from the AMP downtrend by selling the stock short, or buying put options.
Or if you owned the stock, you could have bailed out long before it's value was decimated.
The point is that you could have got quite an accurate summary of the fundamentals of AMP without spending one minute of your time doing fundamental research. Just look at the chart.....all the information you needed was graphically displayed for you.

Look at the current price action of AMP. Nice uptrend in place, particularly when viewed on the weekly chart.
Why is it uptrending? Because tens of thousands of investors, having done their research, have formed the opinion that the stock has good fundamentals. No need for you to research AMP to profit from it - the research has already been done for you. If an uptrending stock shows temporary weakness by pulling back for a few days as profit takers bail out,
and then the uptrend resumes as buyers come back in, it presents you with an ideal opportunity to hitch a ride on the trend and make some money.

The same sort of simple analysis and trading strategy can be applied to any liquid stock that starts uptrending or downtrending strongly.
WPL is a good example.....uptrend began in early 2003. Three years later, the stock is more than four times it's 2003 value.
Once you saw WPL heading steadily north east on the chart, making higher peaks and higher troughs, did you really need to spend hours or days of your time doing fundamental research on it?
Thousands of investors had already researched it for you and their findings were very positive, otherwise why would they be piling into the stock and pushing it higher week after week?

A common fallacy among stock market players is that if you want to profit from the market, you have to read the financial papers, company reports, brokers newsletters etc to keep yourself up to date with the latest developments in the economy and within individual companies.
Its simply not correct.....I've been trading the markets for 10 years or so and for the last eight of those years I haven't read a financial publication, a brokers newsletter or a company report.
The most reliable information is in the charts. Learn how to interpret them, learn how to identify trends, learn how to recognise retracements, watch for the trend to resume following the retracement.
You won't need to spend your time doing boring company research, and you won't need to hand your hard earned money over to Fat Profits either.

If you want some good books on how to identify trends and how to hitch a ride on them, I'd suggest.....

"Dave Landry On Swing Trading" by Dave Landry

"Secrets For Profiting In Bull And Bear Markets" by Stan Weinstein

The trading methods expoused by both these men are simple to learn, easy to implement, and require very little time input from the trader or investor.

Bunyip.