ETF Momentum Signal
for May 2016 (Final)
Second Place ETF
Third Place ETF
|Gross Compound Annual Growth Rates
(Since August 2006)
|Top 1 ETF||Top 2 ETFs|
|Top 3 ETFs||SPY|
Last Updated: December 23, 2010 • Posted in Individual Gurus
Several readers have suggested a review of the advice of Martin Weiss, chairman of The Weiss Group, Inc., which operates Weiss Research, Inc. and Money and Markets. Dr. Weiss previously published a “12-Month Trading History of Premium Services” for “various premium services delivered mostly via email, providing investors with research and recommendations for trading stocks, mutual funds and options.” As of 1/9/09, there were 20 such services. This trading history is no longer available. The trades listed for these services are based on “copies of the broker confirmation statements of some subscribers.” Using data for the 530 trades listed across these 20 services as of 1/9/09, we conclude that:
The 530 trades listed cover those closed roughly over the period November 2007 through November 2008, but there are a few trades outside these bounds. In preparing the trade data for analysis, we make the following assumptions:
We note that the descriptions of trade histories include the statement: “The following are the results on closed trades for this service reflecting the most recent 12-month period. Information on open trades is excluded, but is available to current paid subscribers…” A true picture of overall trading performance should include the status of open trades. There can be a tendency to keep losing trades open in hope of reversals, causing a bow wave of losing positions.
Trades across the 20 services involve individual stocks, exchange-traded funds (ETF), equity options and index options. Trade durations vary widely, as does the number of trades listed per service. Since some services have very few trades, we evaluate performance in aggregate rather than by service.
The following table provides performance statistics for all 530 trades and for stocks/ETFs and options subsets. Note that:
As noted above, these results are for closed trades only. Adding open trades might improve or degrade average returns.
Benchmarking these returns is difficult because of the large number of trades, the different asset types traded, the widely varying trade durations and the different dates spanned by these durations. From the end of October 2007 through the end of November 2008, the average return per calendar day for the S&P 500 index is about -0.11%.
In summary, the performance of Martin Weiss’ premium services in aggregate over the past year is unimpressive.
For related information, see the Securities and Exchange Commission Administrative Proceeding File No. 3-12341 of June 2006. The SEC asserts that, during the period September 2001 through December 2004 (at least):
Section B.14: “…[M]any subscribers who followed each Weiss Research trading recommendation – as Weiss Research encouraged its subscribers to do – experienced overall returns that were substantially lower than Weiss Research’s profit examples and most actually lost money. Although Weiss Research disclosed to subscribers that losses are possible, it did not include information on specific losing trades or disclose that, for the most part, its premium services newsletters had not been profitable for subscribers.” [Italics added.]
Section B.15: “Weiss Research maintained internal performance records which noted every trade Weiss Research recommended and the hypothetical profit or loss an investor would have experienced if he or she had followed Weiss Research’s recommendations. Weiss Research did not make these performance records available to subscribers or potential subscribers. These performance records demonstrate that, during the relevant time period, subscribers to most of Weiss Research’s premium services, who followed Weiss Research’s recommendations without deviation, would have lost money. Subscribers to the few profitable services would have realized overall gains that were well below the profits from individual trades represented in Weiss Research’s advertisements.” [Italics added.]
Note also per Peter Brimelow in MarketWatch (12/23/10): “The Terrible Ten for 2010: Martin Weiss’ Safe Money Report, Martin D. Weiss: -6.0%…”
See Guru Grades for links to evaluations of the commentaries and advice of other investing experts.
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