Stock Doctor

[Boggo]

Thank you Boggo for that helpful response.
The program has superb graphics and seems to be very sophisticated. I have also viewed the videos on the Stock Doctor website.
I have a couple of questions
- I have essentially a blue chip portfolio and for someone who is not planning to do much trading, I guess its value would then be mainly in monitoring the portfolio for potential problem areas. As the cost is say $1600 pa, I am wondering if this is a worthwhile investment in that type of situation.
- I noticed in tinhat's post that he referred to Thompson Reuters Consensus forecasts. Have you found these helpful?
Many thanks

Because I use tech analysis it quite often gets me ahead of the game a bit, IFM being a recent example where I got out but then after the dip got back in (about 20c less than where I exited) based on my indications which just happened ahead of an email from StockDoctor spelling out the potential advantages of their recent news and a new target valuation.

My tech analysis I think eliminates the need for taking notice of consensus reports so I don't really use that.

Without the tech analysis you will get a heads up that all may not be well and that alone can easily save you $1600.

They keep you updated sometimes three times a day with emails especially during reporting season. If you enter your holdings into their online portfolio section then you will get references to your holdings in the daily emails that could highlight any potential negative effects on your positions.

Extract from a recent email, as soon as a review is completed you get another email with the outcome.

 

[tinhat]

As Boggo states, the core value is that they run every ASX listed company through fundamental analysis model to provide it with a financial health rating of distress, marginal, early warning, satisfactory or strong. The interesting this is that this model shows that only 25% of ASX listed companies are satisfactory or strong according to their model and this result has been consistent over time. At its core, this is what the service is about.

The metrics they use to decide if a stock comes in as a growth star stock or a borderline growth star stock means that sometimes a stock will come in after having had a meteoric rise which has made me wonder whether I've missed out on the party. What I have noticed over the years though is that a strong growth company will often see its Lincoln valuation rise from review to review too, so although it might not seem like value according to the Lincoln valuation the price runs ahead and the Lincoln valuation catches up next reporting season. Sometimes stocks come in as a star stock, having met the criteria but at price premium to the fundamental valuation Lincoln gives to the stock.

Stock Doctor doesn't provide you with a strategy or timing. Their model picks up the occasional stock that turns out to be a disaster, such as FGE and BCI, due to events that lie outside their methodology. That said, they do provide more qualitative analysis of company outlook these days and they do provide warnings where the analyst thinks there is risk in the outlook for the company. Speaking with the analysts is very helpful.

One lesson I have learnt is that if Stock Doctor drops a stock, take it as a sell recommendation and sell it. There will be better opportunities for your money. Discipline and strategy are in the hands of the investor. I learnt this the hard way last year with BCI. I was buying after they had dropped it as a star stock in late August. What a fool I turned out to be.

It's a good service. It's worth the money. It does require a more active investment management strategy but this could be a weekly review or monthly review or reporting season review strategy. It doesn't have to be daily.

 

[dchass]

Stock Doctor doesn't provide you with a strategy or timing. Their model picks up the occasional stock that turns out to be a disaster, such as FGE and BCI, due to events that lie outside their methodology. That said, they do provide more qualitative analysis of company outlook these days and they do provide warnings where the analyst thinks there is risk in the outlook for the company. Speaking with the analysts is very helpful

Thank you for your considered and detailed response.

From your posts you have obviously been using Stock Doctor for several years. As a matter of interest, have you noticed whether Stock Doctor has often (or ever) issued concerns or warnings on say any top ASX 100 stocks?

 

[tinhat]

From your posts you have obviously been using Stock Doctor for several years. As a matter of interest, have you noticed whether Stock Doctor has often (or ever) issued concerns or warnings on say any top ASX 100 stocks?

Well, in a sense that is what the financial health model which is at the core of their service does. For example, MQG has had an "early warning" health rating (which places it one step below investment grade) in Stock Doctor since September 2008. They crunch the numbers on every ASX listed stock each reporting season and run it through their model.

If I remember correctly, they use to rely on consensus data for forecast earnings and profits which meant that there would be stocks that were technically star stocks that they felt had high downside risk in their outlook. One example was Iluka. It was a star stock a few years ago but when I spoke with the analyst at the time he raised warnings. These days they provide their own forecasts for star stocks, but at the end of the day, they are relying on the guidance the company provides them for forecasts.

Profit warnings and other downgrades in forecasts get dealt with promptly and if the stock doesn't look like it is going to continue to meet star stock criteria in the future they drop it fairly quickly these days. FLT was one example, they removed it as a start stock last month based on the downgraded guidance given during the AGM. Another is CCL which they threw out as a borderline star stock in May 2013 when they gave a downgraded outlook at their AGM.

They advocate a diversified holding of their star stocks to mitigate against unforeseen disappointments such as FGE or MCE which were both star stocks that crashed.

 

[dchass]

Another is CCL which they threw out as a borderline star stock in May 2013 when they gave a downgraded outlook at their AGM.

That's interesting. My broker recommended buying CCL in Aug 2013, which I did after they had fallen, but they fell a long way from there over the following 6 months. Perhaps that is a good example for me of one of the benefits of Stock Doctor.

There again, CCL is starting to regain momentum again, and as many say about blue chip stocks, perhaps it's not about timing the market as much as time in the market!

 

[So_Cynical]

$1600 for a 12 month subscription...that's a sizable chunk of money.

Cant help but think that if one could afford to pay 1600 annually for this service then you already have money and probably don't need help getting more.

 

[dchass]

$1600 for a 12 month subscription...that's a sizable chunk of money.

Cant help but think that if one could afford to pay 1600 annually for this service then you already have money and probably don't need help getting more.

On the other hand, my paper loss from the CCL purchase was $7,000 in one transaction, which potentially makes Stock Doctor pretty cheap

 

[So_Cynical]

On the other hand, my paper loss from the CCL purchase was $7,000 in one transaction, which potentially makes Stock Doctor pretty cheap

7K loss, so a 50K approx trade? what can i say, that's a third of my entire portfolio.

On the subject of CCL, i have 2 parcels, 10.97 and 9.07 - in profit this week for the first time.

https://www.aussiestockforums.com/forums/showthread.php?t=1280&page=6&p=818892&viewfull=1#post818892

 

[Boggo]

$1600 for a 12 month subscription...that's a sizable chunk of money.

Cant help but think that if one could afford to pay 1600 annually for this service then you already have money and probably don't need help getting more.

I look at it as cheap insurance for my SMSF, there hasn't been a year yet when it has not paid for itself.

 

[dchass]

I look at it as cheap insurance for my SMSF, there hasn't been a year yet when it has not paid for itself.

Yes, this seems to be a good summary assessment of Stock Doctor's benefits.

I am not a user yet but am currently attempting to study the usefulness of the program for my purposes, by evaluating the 14 day trial. It appears that Roger Montgomery's Skaffold is an alternative and Skaffold has it's own thread on this forum which I have perused. As a matter of interest, is anyone aware of a detailed comparative analysis between Stock Doctor and Skaffold?

 

[brianwh]

Have found this thread very interesting. I currently am using their free trial and while I am seeing plenty to like, I have two main problems. Firstly, I imagine most people will come to Stock Doctor with an existing portfolio with little or no spare cash to add to holdings. Thus to adapt an existing portfolio to one based on Stock Doctor recommendations will require a major reshuffle - moving some stocks in and selling others. Not everyone would see this necessarily as a bad thing but I'm not sure I'm up for such a move. This is particularly the case since I can't see the track record of their recommendations to get an idea of how successful they are in identifying better performing stocks. Secondly, many of their recommendations are fully (or over) valued suggesting that much of the gains have already been made.

I have been running a moderately successful equities portfolio as part of my SMSF for some years but have come to the conclusion that I don't have the resources (particularly time) to adequately analyse 15-20 stocks on an ongoing basis so if Stock Doctor (or similar) could do at least some of the work for me, and perhaps better than me, it might be worth the money.

 

[Funda-Struck]

Yo.

Considering a subscription to SD, was gonna ask them a question but thought I might try here first from Stock Doctor users...

Which valuation method is used by stock doctor, is it Discounted Cash flow?
If so, do they allow you to see the cash flow assumptions and discount rate they have used to come up with their figures, and can you throw in your own figures to adjust to your own liking??

Cheers!

 

[ThirtysixD]

Seems like an expensive way to get a robo-advisor?

With an account of 100k it would be the same as paying 1.5% in fees.

 

[So_Cynical]

Seems like an expensive way to get a robo-advisor?

With an account of 100k it would be the same as paying 1.5% in fees.

For a portfolio of 500K it might seem reasonable, but then it's 500K that usually hasn't just appeared from nowhere, once people have money they seem to be prepared to part with some of it in some strange wealth preservation/expansion exercise.

 

[lauriejay]

Trying the 10 day membership now too.
Hopefully it bears some fruit.
The yearly subscription seems steep for someone who's new to trading.

 

[tippergreen]

Trying the 10 day membership now too.
Hopefully it bears some fruit.
The yearly subscription seems steep for someone who's new to trading.

Well, after paying $1500 for the annual subscription and sticking with purely star stocks, I've lost 8% of my life savings, wasted $1500 on this meme service, and missed out on a guaranteed 4% I would have made if I'd just left my money in an online high-interest savings account. The only reason I didn't make even heavier losses is because I sold out of a couple of positions early. How the overall market can be positive or flat with my entire portfolio plummeting just baffles me; considering these securities are apparently a result of sound fundamentals analysis. Perhaps I'm just really, really unlucky. But this will be my one and final foray into the securities market; my SD subscription is up in 8 days and I can't think of a rational reason to renew it.

 

[Wysiwyg]

How the overall market can be positive or flat with my entire portfolio plummeting just baffles me; considering these securities are apparently a result of sound fundamentals analysis. Perhaps I'm just really, really unlucky.

The All. Ords. last peaked in April 2015 and many stocks have been stuck in a long term sickly range so you could be buying at the top of a market up swing. It would be interesting to know when the star stocks are announced, like at the top of an upswing or at apparent under value. Everyone's portfolio goes underwater at some stage.

 

[So_Cynical]

How the overall market can be positive or flat with my entire portfolio plummeting just baffles me; considering these securities are apparently a result of sound fundamentals analysis. Perhaps I'm just really, really unlucky.

Fair to say you haven't been lucky so lets go with unlucky super bad timing for star type stocks, 12 months ago they were very popular as bond/income proxy's, now not so...timing is really very very important, December last year was a great entry for many stocks (Mining - Coal - Oil - Gold) the type of stocks that dont get stars.

 

[tinhat]

I've lost 8% of my life savings, wasted $1500 on this meme service, and missed out on a guaranteed 4% I would have made if I'd just left my money in an online high-interest savings account.
View attachment 69040

If you owned an investment property, say an apartment in Sydney or Melbourne and the going price of similar apartments fell by 8% in one year would you sell? Investing in stocks is not for everyone. Very few people who stick with share investing would set a stop-loss at 8%. Many long term investors are sitting on dividend yields that exceed 8%. I don't even look at the market price of the CBA shares sitting in my portfolio. Why do I care what the market price is?

A lot of the Lincoln star growth stocks are mid-caps which are coming off some amazing runs post-GST, for example TPM, VOC. They don't pick or forecast sector or market cycles. They are bottom up. Some of their start stocks remain unloved for years before the market catches on, for example Iinet and TPG. Some don't live up to the promise and crash and burn. That's the risk of investing in the stock market.

I use their service. I use the fundamental analysis. I pay attention to their start stocks and their analysis. I make use of their analysts for insights. At its core, their fundamental analysis model consistently identifies about 25% of all listed stocks as investment grade on a bottom up basis. From that universe they then run these companies through another model of analysis which essentially screens for growth potential (and more recently, in the case of their income stocks, for sustainable dividend yields at or above market average yield).

Their stock doctor system is a great way to research companies too. If mention of a company peaks my interest I can go to Stock Doctor and look through years and years of the historical data for key financial measures all tabulated.

Of course they seek to outperform the market but there will be times when they underperform the market as their bottom up fundamental analysis results in mix of large, mid and small caps making up their star stocks in comparison to the composition and weighting of the major indices.

 

[systematic]

If this was the Beginner's forum my reply would be much kinder. But it's not, so here are my observations...

Well, after paying $1500 for the annual subscription and sticking with purely star stocks, I've lost 8% of my life savings, wasted $1500 on this meme service, and missed out on a guaranteed 4% I would have made if I'd just left my money in an online high-interest savings account.

- You've been at it for 16 months. So you have the patience of a child (or a typical investor).

- You're comparing a loss in equities over 16 months to what you could have made in fixed-interest over that time period. If you've ever even looked at something like an All Ords chart or whatever, you'd be well aware that the market fluctuates and doesn't dish out a fixed-rate. Say, what?

The only reason I didn't make even heavier losses is because I sold out of a couple of positions early.

...You're unable to stick to a system. Selling positions early could hurt you on another occasion.

How the overall market can be positive or flat with my entire portfolio plummeting just baffles me;

...Plummeting? Are you serious? My portfolio (admittedly no doubt more volatile than many would be happy to invest in) could (and does) fluctuate that amount in a day! Often in seemingly the opposite direction to whatever the market is doing (not quite correct, but that's how it often feels)

Perhaps I'm just really, really unlucky.

...You really haven't looked at a basic chart of the All Ords, have you? It's not that you're really, really unlucky. You may or may not be invested in a good system (I have no idea re: stock doctor) to begin with - but it doesn't really matter. You could be given a 'winning system' and it wouldn't make a difference. You'd still lose and claim bad luck. A good investment strategy will try the patience of a saint.

But this will be my one and final foray into the securities market

...It may well be, and might be a good thing in your case! One positive is that you are admitting you can't handle it, and that's a good thing. You should be able to sleep at night, and honestly - if only fixed-interest will do that for you, that's fine. Better than losing money in the market through bad decisions. Knowing yourself, is half the battle in investing. I'm serious about this. My brother, despite me explaining much over the years, has only ever made one stock trade in his life - when someone might have put him onto something (I worked in the mining industry back then) and it turned out a ten-bagger. He lives really well, has a very good career and productive life - and only invests in fixed-interest (to my knowledge, that hasn't changed). If I mull over it, I can despair about how well he could do / could have done considering his starting capital was waaay better than mine. But, he sleeps at night and has a great life - who could complain?
Just a story to share that I'm not actually having a go. We're all different, and knowing who you are in investing is, as I said, half the battle. If you do know who you are (like my brother) - that's a good thing. But know that you will be (just like my brother - who could probably have added a zero to his wealth by now) missing out on opportunity. It's up to you whether that's okay.

I can't think of a rational reason to renew it.

...Me neither! For two reasons. 1) All of the above, and 2) You are obviously not comfortable that this Stock Doctor system is a winning one to begin with (by the sound of it).

All the best with whatever way you go in the future.