I think one important reason why you have had such good returns is that you are able to ignore other people’s opinions and remain confident in your own judgments.
The point I was trying to make was not about my returns but my puzzlement at what Schwab rates as good since 0 of my 24 mostly MF picks (which generally beat the market), and only 4 out of 50 of Townrich’s mostly MF picks, got rated above C, D, or F. What are they looking for? It’s clearly not good performance. Maybe it’s just safety.
I don’t see myself at all as ignoring other people’s opinions. I read most of the posts on 27 MF stock boards for information. I read other newsletters and lots of Seeking Alpha articles. I am an avid searcher for information and opinions. I admit that I do try to evaluate for myself and decide independently of what the crowd is saying. I do tend to buy when the market has fallen and all the talking heads are saying “Sell! Sell!”
I recognize that ignoring what others have said can hurt me badly. For example when I didn’t pay attention when Starrob warned against the little Chinese stocks, which subsequently turned out to be fraudulent.
I’ve also seen others get badly hurt by not listening to advice. For a classic example on the WPRT board, see below. If you’re not interested in WPRT one way or the other, it’s probably not worth reading.
Example: About 9 months ago, when WPRT was about $29.50, I pointed out that WPRT was losing so much money, that with the gross gross margins it has on its engines it would have to quintuple its revenue to even break even, much less make a profit. (It had $30 million in revenue for the quarter and lost $32 million, implying $62 million of expenses. Gross margins of 27%. Even giving them gross margins of 33%, a doubling of revenue, $30 million more, would only have eaten up $10 million of that $30 million loss, etc. And that’s not even allowing for increasing operating expenses to cover that doubling of revenue.)
I said that, in my opinion, there was no way they could make a profit in years. I suggested PSIX as an alternative that also made natural gas engines, and was rapidly growing.
A few people listened, but the vast majority were furious at me for pointing out how huge WPRT’s losses were compared to their revenue, and how, by simple arithmetic, they couldn’t make a profit in any reasonable time. Even one or two TMFers: “Wait until the 3rd quarter (of 2013)! You don’t understand that we here at MF are in it for the long term! If Tom and David recommended it I’m staying in it [and you are an idiot for criticizing it]! If Tom and David recommended it, it would be sacrilege for me to use my own brain to evaluate it! ,Etc”. I was accused of being snarky, a short (I’ve never had the courage to short anything), immoral, gloating, etc. I quit posting on the board.
No attempt was made by anyone to answer the above figures about the losses and the need to quintuple revenues to break even. Nine months later in a tremendously good market, the price has dropped to $16.30, down 45%!
Still big losses. Stopped production of their primary engine. Closed factories. Laid off workers. Diluted the shares. But the people on the board are still taking comfort in that MF SA still has it listed as a buy. Who knows? WPRT might be a buy at $16. But not for me.
By the way, PSIX is now up almost 130% in those nine months or so.