After reading TMF’s pitch for TDOC (linked below), I was going to title this post “The Questionable Ethics of Talking One’s Book”. Instead, I’m going to cut to the chase.
TMF loves to pitch “small and mid-cap growth stocks” that supposedly have “explosive growth” but nearly invariably end up losing their buyers money, as post after post from their subscribers to Stock Adviser attest. The reports from those subscribers often go like this. “On advice of TMF, I bought such and such. Now I’m losing money. What should I do?” Or else the buyers of those losing stocks ask a question, “What you do think of such and such?” Invariably, they are told to “sit tight” and “hold for 3-5 years”.
Have you ever wondered where that 3-5 year holding-period comes from? Come on, think about it. If the company whose stock TMF is pitching is currently unprofitable and is NOT forecast by its industry analysts to become profitable over the next three years, then --of course-- if the stock is bought NOW, the waiting-period for hoped for --BUT NOT ASSURED-- profitability has to be at least last 3-5 years.
Here’s some relevant quotes from the article. (Comments in bracket are my own).
"She [the idiot running the ARK funds] has been trying to catch a falling scalpel, and it obviously isn’t working… This is a grim reminder that “buy high, buy more lower” isn’t exactly a winning strategy. Sometimes buying the dip is just a case of snapping turtles all the way down… She’s been trying to catch a falling scalpel, and it obviously isn’t working… analysts don’t see Teladoc turning a profit until 2025 at the earliest.
Rick Munarriz [the article’s writer] has positions in Teladoc Health. The Motley Fool has positions in and recommends Teladoc Health.
So, here’s how Stock Adviser works. Each month, two new stocks are recommended. The stocks all have the same profile: a decent-enough balance sheet and a forecast of higher than average growth. But --most likely-- the company is presently unprofitable, and it is not forecast to become so over the next three years. That’s all the facts you need to know to set up a scan at FinViz (or similar) to find such stocks yourself without having to wait 30 days to be spoon fed two of them. Whether you’d want to buy such stocks is a whole 'nother matter. But you now know how to front-run their flagship newsletter.
Arindam
https://www.fool.com/investing/2022/04/29/cathie-wood-is-buy…