" hope not… I have subscribed to a number of MF subscriptions… hope its not just a scam."
Regrettably, yours is a vain hope, as a bit of due diligence will show.
On their banner page, the G BoyZ tout their hypothetical stock-picking performance, saying they have beat the SP500 index by 3x. Specifically, they claim that $10k invested in the picks from their Stock Adviser tip sheet (SA) would have yielded a 461% gain (since its Feb 'p02 inception) vs the gain of 133% for the SP500 index over that same time frame.
Now come the hard facts that prove that claim is a lie. The SP500 cannot be bought, only derivatives that track it, never mind that the index is made up of mostly large-cap stocks --i.e., the stocks of large, mature companies well past their early growth years-- whereas SA bets on small and mid cap growth companies. Hence, their choice of a benchmark --though a common one-- is a deliberate attempt to mislead. If they had wanted to benchmark their performance in a fair manner, they would have chosen indexes that track small or mid-cap stocks. Clearly, their intention is to mislead. However, there are ETFs that track those market sectors, namely, IJT and IWO.
Now, let’s do some simple, very basic math. The claimed inception date for SA is Feb, 2002. Today is April 17, 2022, or 20.21 years later. (Remember that number, because you’ll need it shortly.) Their claimed 461% gain is the same as saying a gain of 4.61. So enter that number into a calculator that will so compound roots. Then, select the key for compound roots and enter the number of years (20.21). Presto, Magico. The answer returned is 1.078549853.
Now, do three more things. Shift the decimal two places to the right, truncate the decimal to two significant places, and slap on a percentage sign, thusly, 7.85%. That number is the IRR for your initial $10k investment in SA. Pretty underwhelming, right? or about what an average junk bond pays.
When you run this same exercise for IJT and IWO over the exact same time frame, you’ll discover that their IRRs were 10.% and 8.71%, respectively. In short, the Motley Fool’s track record is a documentable one of under-performance that will prove to be even worse once the annual fee of $199 is subtracted from gains. (Heck, these days, even I-bonds are offering nearly 10%.)
Lastly, let’s return to the SP500. As said before, it can’t be bought, only derivatives that track it, the most commonly of which is SPY. Since Feb, 2002, what kind of return has it offered? Again, go to Yahoo Finance (or similar) and pull the historical data. From then until now, SPY’s IRR (with divs reinvested) was 9.08%. In other words, the G Boyz can’t even beat their strawman benchmark.
So, what does buying a subscription to Stock Adviser get you? Club membership and guaranteed underperformance compared to just indexing any of the common stock market indexes. so, to one and all, if you think my analysis is flawed, then provide your own, and let’s settle this matter once and for all.
(whose IRR on money put to work has averaged 13.1%/yr over the last 37.5 years and who has never bought anyone’s tip sheets, because all of them are scams that prey on them too lazy to do some basic math and/ or their own investing research.)