Thank you for your thoughtful article. It was indeed a high quality article and you were very respectful. You did not take the cheap but easy shot of listing a table of all the individual newsletter authors. Apart from providing useful data your article had some important investing wisdom. It’s important for everyone and in particular new investors to be reminded that investing is mostly a game of luck.
On March 1, 2022 Seeking Alpha published the returns they found for all 47 ideas. It was published one day after they rejected my article, and also one day after this article was published. Their returns have been computed over a different period. In their article the end date was probably 31 December 2021 while I use a full year as investment period for reasons mentioned above.
Normally I get a notification when they publish such an article. Usually I get a notification from the SA article system and another one when they publish a chat message to let all Marketplace authors know. No notifications this time. Normally, such an article appears in the list of articles of every Marketplace author who contributed to the article. That increases the number of pageviews and comments on such an article much, since then followers of all these authors can see it in their feed. I do not see it in my list of articles and I do not see it in the list of articles of a couple of other authors. So, this year SA has not given much exposure to the best ideas of the 14 Marketplace authors who submitted their best idea.
They did not do any significant analysis or commented on any of last year's ideas, it was just a list of the returns of the best performing ideas of last year's 47 best ideas.
That does not change my motivation for excluding his idea. Similarly the crypto idea performed even much better than I though, 199%. Again, it does not change my reasons for excluding this idea.
For 2022 only 14 authors submitted their idea, in the same SA article. I had to assign a category to my best idea for 2022 (Value) when I submitted it to SA. However, I could not find any mention of any categories in this new article.
I would say Nano One Materials (NNMOF), Upstart (UPST) and Digital Turbine (APPS) are growth ideas. There are also two "energy/commodity" ideas but I think they can also be considered value ideas. Smart Sand (SND) has horrible earnings metrics but trades at a low P/B, and there is a turnaround point of view that is typical for many value stocks. Laredo Petroleum (LPI) is very profitable. Two best ideas are leveraged growth ETFs, that should be excluded when analyzing average returns next year. I consider the other 7 best ideas all value ideas.
you conclude that "So, best ideas from Marketplace authors can be very good, but only on a statistical basis."
How do you come to this conclusion? The return was not better than that of the S&P500. I think this statement would only be true if one could determine ex ante which are the best ideas.
If you look at the percentage the average return was high. Indeed it was not better than the S&P 500. But I suppose it was a better mix than the S&P 500. Though it was not difficult to get high returns during the last 12 months (just invest in the S&P 500) I think most investors got lower returns.
Thank you for your thoughtful article. It was indeed a high quality article and you were very respectful. You did not take the cheap but easy shot of listing a table of all the individual newsletter authors. Apart from providing useful data your article had some important investing wisdom. It’s important for everyone and in particular new investors to be reminded that investing is mostly a game of luck.
On March 1, 2022 Seeking Alpha published the returns they found for all 47 ideas. It was published one day after they rejected my article, and also one day after this article was published. Their returns have been computed over a different period. In their article the end date was probably 31 December 2021 while I use a full year as investment period for reasons mentioned above.
https://seekingalpha.com/article/4491792-2022-marketplace-top-ideas-and-2021-results (probably behind paywall)
Normally I get a notification when they publish such an article. Usually I get a notification from the SA article system and another one when they publish a chat message to let all Marketplace authors know. No notifications this time. Normally, such an article appears in the list of articles of every Marketplace author who contributed to the article. That increases the number of pageviews and comments on such an article much, since then followers of all these authors can see it in their feed. I do not see it in my list of articles and I do not see it in the list of articles of a couple of other authors. So, this year SA has not given much exposure to the best ideas of the 14 Marketplace authors who submitted their best idea.
They did not do any significant analysis or commented on any of last year's ideas, it was just a list of the returns of the best performing ideas of last year's 47 best ideas.
Apparently the warrant ALSEW performed worse than I thought, only 127%. See also http://finance.dalycity.com/camedia.dalycity/quote/historical?Year=2022&Symbol=ASLEW&Range=12&Month=1
That does not change my motivation for excluding his idea. Similarly the crypto idea performed even much better than I though, 199%. Again, it does not change my reasons for excluding this idea.
For 2022 only 14 authors submitted their idea, in the same SA article. I had to assign a category to my best idea for 2022 (Value) when I submitted it to SA. However, I could not find any mention of any categories in this new article.
I would say Nano One Materials (NNMOF), Upstart (UPST) and Digital Turbine (APPS) are growth ideas. There are also two "energy/commodity" ideas but I think they can also be considered value ideas. Smart Sand (SND) has horrible earnings metrics but trades at a low P/B, and there is a turnaround point of view that is typical for many value stocks. Laredo Petroleum (LPI) is very profitable. Two best ideas are leveraged growth ETFs, that should be excluded when analyzing average returns next year. I consider the other 7 best ideas all value ideas.
you conclude that "So, best ideas from Marketplace authors can be very good, but only on a statistical basis."
How do you come to this conclusion? The return was not better than that of the S&P500. I think this statement would only be true if one could determine ex ante which are the best ideas.
If you look at the percentage the average return was high. Indeed it was not better than the S&P 500. But I suppose it was a better mix than the S&P 500. Though it was not difficult to get high returns during the last 12 months (just invest in the S&P 500) I think most investors got lower returns.