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Is Ferris Report really worth it?
How have the stock recommendations in the Ferris Report performed in the past?
Can you really achieve marketing-beating investment results by following their stock picks?
Are there any better alternatives to the Ferris Report?
After trying out the Ferris Report, let me share with you what I have found and help you make an informed decision.
Ferris Report Investment Strategy
Dan Ferris launched the Ferris Report in December 2022.
His investment strategy used in the Ferris Report is to identify and exploit macro trends (i.e. inflation, recession, and geopolitics) and micro trends (i.e. changes in individual industries like housing, semiconductors, or firearms).
For example, if he expects that the demand for housing would exceed the supply of housing, then he might recommend companies that could benefit from this micro trend.
If he expects that the demand for commodities(e.g. copper or oil) would exceed the supply, then he might recommend companies (e.g. copper miners or oil companies) that could benefit from this trend.
If he expects the inflation to persist for a prolonged period of time, then he might recommend buying TIPS (Treasury Inflation-Protected Securities).
Generally, he expects these trends to last at least a couple of years, so most of his stock recommendations in the Ferris Report are intended as medium to long-term trades.
However, predicting trends is tricky.
Markets are complex and many factors are influencing them.
You could be terribly wrong about your timing and your analysis.
I still prefer Warren Buffet’s time-tested strategy of finding good businesses with competitive advantages for the long term.
Also, Dan Ferris does not put on short trades in the Ferris Report.
But, having said that, if Dan Ferris thinks the market is overvalued or in a bubble, he would recommend buying inverse ETFs.
Shorting the market is not something that Warren Buffet would do.
First of all, it involves timing the market top.
This is not easy.
Even if the market is overvalued, it could very well stay overvalued for a prolonged period of time.
Secondly, there is limited upside when it comes to shorting the market.
The most the market could fall is 100% which is impossible.
History shows that most of the time, the market falls at most 20% to 30%.
And in the long run, the market has been always going up.
Right now, Dan Ferris thinks the market is overvalued.
This reminds me of one fund manager that I know who thinks that the US market is going to crash ever since 2013 and has been staying out of the US market and missed one of the longest rallies.
Ferris Report Stock Picks & Performance
How have Dan Ferris’ stock picks in the Ferris Report performed so far?
Dan Ferris started the Ferris Report Model Portfolio at the end of November 2022.
Currently, there are 21 stocks in the model portfolio.
Since Dan Ferris recognizes that markets are complex and it’s possible that he could be wrong, he also implements trailing stops (typically 25% or 30% trailing stop) for all the stocks in his model portfolio in the Ferris Report.
Dan Ferris also recommends up to 25 stocks in the portfolio.
The average return of all the stock picks as of 6th Sep 2023 is about 2.33%.
On the other hand, the S&P 500 and Nasdaq index returned about 9% (excluding dividends) and 21% (excluding dividends) between 30th Nov 2022 and 6th Sep 2023.
Since the performance comparison is only for a very short period of time ( about 9 months), it’s not enough to draw any meaningful conclusion.
Having said that, I don’t like the idea of using trailing stops.
“Trailing stops ” are used mostly by traders.
For investors, “Trailing stops” are seldom used because you sell based on fundamentals and valuations, not some random price levels.
In the 1970s, Warren Buffet bought Washington Post shares at a very good price.
But, after he bought it, its share price continued to drop.
Warren Buffett didn’t put a trailing stop or a stop-loss on his position because he understood the underlying business fundamentals didn’t change.
If he did put a trailing stop or a stop-loss, he might have been taken out of his positions prematurely at a loss or at a very small profit instead of a more than 9,000% return over 40 years.
Personally, I think many people who use stop-loss or trailing stop are not investing but trading and don’t really know what they are doing or are not confident about their analysis of the company.
There are a few special reports that you can also access as a Ferris Report member.
Inside one of the special reports dated 2 December 2022, Dan Ferris recommended that people who have META Platform in their portfolio sell it immediately.
Since he recommended to sell Meta, Meta has returned 141% in about 9 months.
On 2nd Dec 2022, he also recommended that you avoid these stocks Apple, Google, and Amazon, and put your money into opportunities with higher returns.
By the way, his stock picks in his model portfolio have an average return of about 3% so far.
On the other hand, let’s look at the performance of Apple, Google, and Amazon since he recommended avoiding it.
Google has been up about 35%.
Apple has been up about 20%.
Amazon has been up about 45%.
Ferris Report Pricing
So, how much is the Ferris Report subscription?
What can you get as a subscriber?
As a subscriber, here’s what you get:
- 12 Monthly issue with stock recommendation (fourth Wednesday of the month)
- Model Portfolio of Dan Ferris’ favorite stocks
- 4 Special Reports
- Updates and alerts on when to sell or add on to existing positions
- All past issues and special reports
The usual annual subscription is $199.
Alternatives to the Ferris Report
Motley Fool Stock Advisor is focused on giving you stock recommendations that are high-quality companies with long-term growth potential.
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.
Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 8th June 2023.
As of 8th June 2023, average Motley Fool Stock Advisor recommendations have returned over 459% since inception while S&P 500 has returned 124%.
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 28th April 2023, Motley Fool Stock Advisor has had 178 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.
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 $79 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 $79 and renews at $199)
So, for $79 a year- that’s just $1.52 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.