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Is Charles Mizrahi’s Alpha Investor really good?

How have Alpha Investor’s stock picks performed so far?

Could it actually help you achieve better investment results?

Are there any better alternatives?

After trying out Charles Mizrahi’s Alpha Investor, I want to share with you everything that I find out and help you make an informed decision.

Who is Charles Mizrahi, Expert Behind Alpha Investor?

Charles Mizrahi started Hampton Investors Inc in 1985 to help clients manage their money in discretionary accounts where clients paid him a fee that is equal to a percentage of the assets under management.

In early 2002, the assets under Charles Mizrahi dropped significantly by roughly 70% from around 20 million to around 6 million.

It is unclear if clients pulled out their funds because of performance or other reasons.

In 2006, Charles Mizrahi joined CGM Partners Fund LP as a managing partner, then left the company 5 years later.

Between 2000 and 2016, he also started several investment publications to make money from selling stock recommendations:

• www.insiderwealthalert.net (Defunct)
• www.HiddenValuesAlert.net (Defunct)
• www.InevitableWealthPortfolio.com (Defunct)
• www.StealthStocksOnline.net (A guy named Dennis Slothower bought it and used it to sell his investment newsletters)

In 2017, Charles Mizrahi started another new value-investing service called “Park Avenue Investment Club” under Angel Publishing.

Park Avenue Investment Club newsletter is now defunct.

In 2019, he started Alpha Investor under Banyan Hill Publishing.

Under Banyan Hill Publishing, there are a total of three investment newsletters sold by Charles Mizrahi:

• Alpha Investor
• 8-Figure Fortune ($1,495)
• Microcap Fortune ($2,950)

Last but not least, Charles Mizrahi wrote a book called “Getting Started in Value Investing”.

Alpha Investor Investment Strategy

Below is the so-called “Alpha-3” stock-picking approach used by Charles Mizrahi for the Alpha Investor newsletter:

• Alpha Market: The company must be in a large industry that is projected to grow 100% over the next few years. (e.g. 5G, A.I. cloud computing, etc)
• Alpha Management: The company must have a management team with good track records of increasing revenue, earnings, and share price over time.
• Alpha Money: The company must be financially sound. Is the share price fully reflecting the company’s future growth?

Charles Mizrahi does not set a stop-loss target, but he uses three key things to decide whether or not to exit a position:

• Has the stock become absurdly priced in comparison to the underlying company’s value?
• Is there a better opportunity that has come along that is better than what I am holding?
• Has there been a fundamental change in the company or its strategy that has reduced its underlying value?

Now, let’s look at how he uses his investment approach to pick stocks for Alpha Investor subscribers.

In May 2021, Charles Mizrahi recommended buying the stock “Illumina Inc” up to $458 per share, based on his Alpha-3 Approach.

He thought that Wall Street was overestimating the risk disruptive technology could pose to Illumina, thus he thought the share price was not fully pricing in its fair business value.

 

However, about 16 months later, after the share price of Illumina tanked more than 50%, he then decided to go deeper and check out its competition.

Shouldn’t a competitive advantage analysis have been done BEFORE recommending the stock?

As a value investing book author,  Charles Mizrahi should have known that “competitive advantage” is one of the most important factors in stock research and analysis.

Illumina’s competitors such as Ultima and Element were not new companies that just started out.

Ultima was founded in 2016 while Element was founded in 2015.

It just clearly shows that he does NOT understand the industry well.

Alpha Investor: Stock Picks & Performance

So, how have Charles Mizrahi’s Alpha Investor stock picks been performing in the past two years?

In 2020, almost everyone who bought stocks made money, so I am not going to analyze the performance of his stock picks in that year.

How is the performance of Charle Mizrahi’s stock picks in 2021?

Charles Mizrahi’s Stock Picks in 2021	Performance (as of 3rd May 2023)
Jan 2021	55.99%
Feb 2021	-8.42%
Mar 2021	50.85%
April 2021	-57.05%
May 2021	-51.41%
June 2021	-35.81%
July 2021	N.A
Aug 2021 (Special Bonus Reports Stock Pick)	-57.86%
Aug 2021	-11.95%
Sep 2021	1.25%
Oct 2021	-22.38%
Oct 2021 (Special Bonus Reports Stock Pick)	16.02%
Oct 2021 (Special Bonus Reports Stock Pick)	-72.6%
Nov 2021	-19.47%
Dec 2021	-11.16%

Also, how is the performance of Charle Mizrahi’s stock picks in 2022?

Charles Mizrahi’s Stock Picks in 2022	Performance (as of 3rd May 2023)
Jan 2022	-13.18%
Feb 2022	-26.06%
Mar 2022	-2.17%
April 2022	8.72%
May 2022	9.05%
May 2022 (Special Bonus Reports Stock Pick)	-1.92%
June 2022	N.A
July 2022	28.1%
Aug 2022	-0.45%
Sep 2022	-16.6%
Oct 2022	N.A
Nov 2022	-15.45%
Dec 2022	0.37%

What about Charles Mizrahi’s latest stock picks in 2023?

Charles Mizrahi’s Stock Picks in 2023	Performance (as of 3rd May 2023)
Jan 2023	N.A
Feb 2023	-14.61%
Mar 2023	-3.7%
Mar 2023 (Special Bonus Reports Stock Pick)	2.5%
Mar 2023 (Special Bonus Reports Stock Pick)	-5.32%
Mar 2023 (Special Bonus Reports Stock Pick)	-3.57%
April 2023	-2.11%

As you can see above, there are many more losers than winners for both 2021 and 2022.

We are now four months into 2023, and the stock picks for 2023 are not faring too well either.

Let’s take a closer look at the individual stock positions (both open and closed) in the model portfolio.

There are currently two portfolios:

• Alpha Open Positions (i.e. core portfolio)
• Special Bonus Report Portfolio (i.e. speculative stocks)

Charles Mizrahi’s Special Report recommendations are companies are in the early stages of groundbreaking innovations.

He only recommends allocating only 2%-3% of the portfolio because of the high expected volatility.

I must say that I am quite surprised that Charles Mizrahi who wrote a book on “value investing” is recommending moonshot stocks (story stocks that are not even profitable yet).

This is the total opposite of value investing.

In fact, two of his recommended Special Bonus Report stocks lost around 60% or more.

But, what about the core portfolio positions inside Alpha Investor Model Portfolio?

Let’s first take a look at the closed positions.

As you can see below, out of 17 closed positions, ten are losers with three of them losing more than 50%.

Delta Airlines stock was bought in late Feb 2020 right after covid-19 news came out (China imposed a lockdown in Jan 2020).

Two months later, Charles Mizrahi sold Delta Airlines at a loss of 58.38%.

This is super bad timing.

Also when everyone was trying to avoid and dump airline stock, it was extremely imprudent to jump into airline stock in the face of a global pandemic.

Another losing position is Netflix which was bought at $508 in late March 2021, close to the peak of a tech bubble.

7 months later, Netflix reached its historical peak price of $690 before crashing 70% to a low of $198 by May 2022.

Charles Mizrahi sold Netflix at $218 in late April 2022, around the time its share price was about to bottom out.

Again, Charles Mizrahi grossly overestimated the growth and earning potential of Netflix and was wrong in his analysis of the streaming industry and Netflix’s business.

Now, let’s look at the open positions.

There are a total of 26 open positions with 9 losers and 17 winners.

Most of the profitable stock picks came from 2019 and 2020 because the stock market staged a strong rally after the pandemic market crash and almost all the stocks went up.

The majority of the stock picks in 2021, 2022, and 2023 so far are also not impressive.

I think you would do much better just investing in S&P 500 index ETFs.

Alpha Investor: Pricing

So, how much does the “Alpha Investor” subscription cost?

What do you actually get as a member?

Here’s what you get:

• 12 monthly issues with one stock recommendation every month
• Model Portfolio
• Weekly updates on portfolio
• Two free reports with one on battery and the other one on energy storage

The usual price for an annual subscription is $199, but new members get a discounted price of $47 for the first year.

It’s a very low entry price because this is the lowest-end product in their sales funnel.

Once you are inside their sales funnel, they will start marketing to you the other high-end products.

Personally, I think that is how they get rich but I am not so sure if that is how you could get rich.

Alternatives To Alpha Investor

If you are looking for good stock investment ideas, there are better stock research and analysis platforms that you can use to do that.

At the end of the day, it’s important for you to take control of the investment decisions, not blindly follow some so-called experts’ recommendations because no one cares more about your financial well-being than yourself.

That’s also why I always do my own independent research after finding stock ideas from various go-to sources such as Motley Fool Stock Advisor, Morningstar, Stock Rover, and Seeking Alpha.

Motley Fool Stock Advisor is focused on giving stock recommendations that are high-quality companies with long-term growth potential, which suits my investment philosophy.

The reason why I subscribe to Stock Advisor is to get stock ideas as Motley Fool has a proven record of finding stocks with massive upside potential.

Personally, I don’t buy every single stock recommendation.

What I do is that if I find any interesting stock pick, I will do my own research again.

First of all, let’s take a look at their track record as of 9th March 2023.

Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 9th March 2023.

 

As of 9th March 2023, average Motley Fool Stock Advisor recommendations have returned over 386% since inception while S&P 500 has returned 115%.

In short, the Motley Fool Stock Advisor has outperformed the market 3 to 1.

That’s a HUGE difference in returns.

But, what about its individual stock picks?

This metric is important because you might not be buying every single stock recommendation made by Stock Advisor.

Below is a table that shows you the performance of individual stock picks over the years.

As of 7th Dec 2022, Motley Fool Stock Advisor has had 164 stock recommendations with 100%+returns.

Here are just some of their best-performing stock picks:

• Amazon: it’s up 19,806%*
• Netflix: it’s up 23,901%*
• Walt Disney: it’s up 632%*
• NVIDIA: it’s up 16,423%*
• Shopify: it is up 4,107%*
• United Health Group: it is up 2,338 %*

[*Returns as of 31st Dec 2021. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]

Will the Motley Fool Stock Advisor always be right about their stock recommendations?

No, because no one can be right about their stock picks 100% of the time.

Let me sidetrack a bit here.

If any stock picking service tells you that they have a close to 100% success rate on their stock picks and can guarantee you high investment returns, you should definitely stay away.

Even Warren Buffet has loss-making stocks in his portfolio, but he still achieves above-average returns because a few big gainers in the portfolio can make up for the under-performers.

What I like about the Motley Fool Stock Advisor is that they are very open and transparent about their bad investments.

As a member, I can see the performance of ALL its past and current stock recommendations (even for closed positions).

For some other stock-picking services that I’ve tried, they don’t publish the performance of all their past and current stock recommendations, so it’s not easy for you to find out their true track record.

For example, the year 2022 has not been good for high-growth stocks because of rising interest rates and high inflation.

So, you can see a lot of Motley Fool Stock Advisor’s stock recommendations are not doing very well.

The truth is that other stock-picking services are not doing well either because of the stock market crash.

Do I still think it’s worth subscribing to the Motley Fool Stock Advisor?

My answer is yes.

The stock market goes up and down all the time.

Every few years, there is a bear market.

According to Peter Lynch who is a legendary fund manager, far more money has been lost by investors trying to anticipate correction than lost in corrections themselves.

In fact, I think the bear market is the BEST time to start investing in the stock market.

Why?

During a bear market, it’s more likely to find great businesses selling at very cheap prices because people are just selling out of fear when the business is still fundamentally sound.

A market crash is a time when huge wealth transfers from irrational and emotional investors to patient and rational investors.

So, if you are thinking of getting into stock investing, I highly recommend the Motley Fool Stock Advisor because I think there are a lot of well-researched stock recommendations.

In terms of pricing, Motley Fool Stock Advisor is also much more affordable.

Usually, its annual subscription is $199.

Right now, there’s a special limited-time $89 offer* for new members for the first year when you click the link here to try it out for 30 days with a Membership-Fee-Back Guarantee. (*Billed annually. Introductory price for the first year for new members only. First-year bills at $89 and renews at $199)

So, for $89 a year- that’s just $1.70 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.

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