The chart is from IBD’s website. Looks pretty impressive, right?
But now do this. Plot the ETF that tracks the IBD 50 against that same benchmark with a 5-year lookback where the black line is FFTY and the purple is the SPX.
IBD’s claims are a scam? You decide.
Arindam,
I don’t follow IBD nor Marketsplurge (yes, I spelled that wrong-I still prefer the old Marketsmith name) but I have used Leaderboard. I have also followed FFTY for information and equity ideas. The most glaring issue to me with your statement is that it is comparing apples to kiwis from what I was exposed too.
First of all, I stopped Leaderboard because I went in with the impression that it would make suggestions and give recommendations several times a week or so. Actually, they make recommendations, add-ons, remove stocks and alter positions in a dizzying fashion. Even just position reductions. They are very active in management, at least during my exposure to them. That’s why I posted weeks ago asking about how often they trade…they seem to churn and burn. But that is also Leaderboard, not MS nor IBD. Actually, does IBD have a true portfolio or just positional evaluations?
FFTY, on the other hand is more methodical and slow. Especially as a larger fund, they can’t turn on a dime nor do they try to. They are managed but not nearly with the changes I saw on Leaderboard. But again, I didn’t own them, just checked them periodically for stock ideas. From my exposure, their positions didn’t seem to alter rapidly nor frequently.
May be way off base, but I don’t think it’s an accurate comparison. An interesting relative one, but not sure you can make critical detailed comparison.
Lakedog
I should clarify my point a bit. I believe that active management, including adjusting position size, holdings, etc does matter. Active management can improve your success. If you followed the recommendations or suggestions as laid out by IBD/MS/LB/etc to the letter, I suspect you could have really good success. But I think it would be hard to do as an individual, at least this individual. I like more life.
The IBD chart may be a retrospective graphing should one be so able to do all those skiboat recommendations. FFTY is a container freighter. We all have seen how well they turn…
Lakedog
Charlie how does the ETF get it’s data? The IBD 50 doesn’t stay static so how does it track the moves they make on a weekly basis?
Andy
ETF PERFORMANCE & BENCHMARK HISTORY (%) Quarterly Monthly
| YTD | 1 Year | 3 Year | 5 Year | Inception | |
|---|---|---|---|---|---|
| Fund NAV | 13.42% | 17.67% | -13.21% | -3.09% | 1.55% |
| Fund Closing Price | 13.42% | 17.69% | -13.24% | -3.08% | 1.55% |
| IBD® 50 Index | 13.77% | 17.70% | -12.63% | -2.47% | - |
| S&P 500 Index | 10.56% | 29.88% | 11.49% | 15.05% | 12.92% |
Data as of 3/31/2024. The Fund incepted on 4/8/2015. Performance quoted represents past performance, which is no guarantee of future results. Investment returns and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted. Returns less than one year are cumulative. One cannot invest directly in an index. The fund began tracking the IBD® 50 Index on Nov 20, 2017. The index incepted on 10/27/2017.
Andy,
A quick glance at the prospectus didn’t reveal how often the fund updates its holdings. But that wasn’t my intent in making the post. Like other tipster services, such as our dear forum hosts, all of them can easily be shown to be lying about their past performance, and no one --per the SEC-- should believe their implied promises about future performance.
I like O’Neil and think he’s a decent chartist. But there’s a world of diff between he can/could achieve trading for his own account and what a would-be follower might achieve. Also, this question has to be asked of all the tipping services. "If your method is so good, why aren’t you just trading for your own account instead of running a subscription service?"
If financial advice is truly good, then it’d be worth paying for, perhaps. But when the results of the advice can be shown to be worse than just buying a broad market index, investors should realize they are being scammed and run the other way.
Charlie
Charlie,
All good things to note but if you are putting an etf upgainst the IBD 50 shouldn’t it buy when a company makes it onto the IBD 50 and sell when they drop off? If they hold it for a month after it already has dropped off it could have fallen to 0. Also in a down turn in the market wouldn’t IBD have been out of the market at that time? Also, The IBD 50 isn’t a portfolio that I know of, it is more of an idea list for people to pick from, much like the IBD 20. I know IBD does have portfolio services but I haven’t looked at them. I use them more like the services you subscribe to.
Andy
Andy,
You make good points, the chief of which is this. Each investor has his or her own means, needs, skills, purposes, and goals, and what one person finds useful another might not.
I, for one, am never at a loss for find investing/ trading possibilities. The opposite is the case. The possibilities are endless, as Peter Lynch used to demonstrate. Just walk into a grocery store or a home improvement center and walk down the aisles. The ideas jump off the shelves at you.
“Who made this? How did it get here? Who uses it? Who built the store? Who financed it?” Who are the store’s competitors? Very quickly, one is looking for answers that range through all the sectors and industries.
The fact that FFTY’s list of holdings might not be the most recent is almost irrelevant. As with TMF’s Stock Advisor, IBD constantly recycles the same names.
Charlie
Bill did continue to trade, he probably felt he had to in order to keep sharp or because it was in his DNA. The team at IBD also have to run their own accounts. They always talk about how Bill would walk around on a follow through day and ask “what did you buy today? You have to buy something on and FTD, even if you keep it small”. When they are talking about a stock on the video they will give the caveat “For full disclosure, I am in this stock”.
