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I just tried out Freeport Society’s Freeport Investor Newsletter.
Is it worth it?
How have Freeport Investor’s stock recommendations performed so far?
Are there any better alternatives?
Freeport Investor Investment Strategy
Charles Lewis Sizemore is the chief investment strategist of Freeport Society.
Here’s a bit of his background.
He went to Texas Christian University in Fort Worth for his BBA in finance.
Later on, he got a Master of Science in Finance and Accounting from the London School of Economics.
He is a CFA (i.e. certified financial analyst).
Below is his working experience until 2018:
- Investment Advisor with Robertson Wealth Management
- Research analyst at Dent Research which is Harry Dent‘s financial newsletter publisher.
- Managing member at Sizemore Capital Management, a company that he registered in Peru in 2008
What is the investment strategy that Charles Sizemore uses to make investment recommendations to Freeport Investor subscribers?
He has five primary investment themes that he uses to find investment ideas that are deemed attractive:
- Freeport Foundation No. 1: Discovering the Dollar’s True Value
- Freeport Foundation No. 2: The Rich Man’s Currency
- Freeport Foundation No. 3: Parabolic Returns From Exponential Progress
- Freeport Foundation No. 4: Rebuilding the American Empire
- Freeport Foundation No. 5: Rejecting the ESG Cartel
Yes, I know it sounds unnecessarily deep.
Here’s my translation in layman’s terms:
- Assets that can protect you from the declining dollar and inflation (e.g. real estate, gold, and bitcoin)
- Buy high-quality businesses that can stand the test of time (think Coca-Cola, Mcdonalds’, etc)
- Invest in innovative technology (e.g. AI, Robotics, etc)
- Buy stocks that can benefit from manufacturing being relocated back to America (e.g. equipment manufacturers, advanced manufacturing and industrial automation providers, etc)
- Invest in the oil & gas sector that has been shunned by ESG-conscious institutional money managers
In particular, we are going to look at the 2nd investment theme because other themes are pretty self-explanatory and easy to invest via sector index ETFs (e.g. oil & gas index ETFs)
Charles Sizemore’s selection criteria for high-quality business are as follows:
- Durable competitive advantage
- Outstanding brand name
- The largest business in its industry
- Sells everyday products
- Sells habit-forming, addictive products (e.g. cigarettes, alcohol, chocolate, digital addiction, etc)
I agree that owning a high-quality business that generates consistent cash flow and can pass the rising cost to consumers by raising prices is a brilliant strategy for preserving your buying power and growing your wealth.
That’s how Warren Buffet grows his wealth.
The key is to identify these high-quality businesses and hold onto them for the long term.
If you are a passive investor and don’t have time to choose stocks and monitor your investments, then S&P 500 index ETFs are the safest.
This is actually what Warren Buffet recommended to regular investors.
But, if you are an active investor and want to pick individual stocks to outperform the market, then identifying these high-quality businesses is key.
Identifying them is only the first step.
You don’t want to buy these stocks at a lousy price (i.e. overvalued price)
The most important thing is to Never Overpay A Stock.
I think one of the best ways to make money safely is to buy good companies when their stock prices are beaten down.
Freeport Investor Stock Picks & Performance
Freeport Investor only started its model portfolio together with its stock recommendation around Dec 19, 2023.
As the stock market has been staging a strong rally since the beginning of 2023 and continuing to make new all-time highs until the end of February 2024, you can see 18 out of its 22 portfolio holdings are profitable while 4 are losing money.
One of the most obvious investment recommendations is Bitcoin.
Bitcoin’s price has almost tripled since its 2022 low.
Since Freeport Investor’s recommendation in Dec 2023, Bitcoin’s price has gone up by more than 40%.
Can it continue to go up to $100,000 or even more?
It’s possible.
History has shown asset prices could skyrocket to unbelievably high levels when there is a lot of irrational exuberance.
Can it crash by 50% or more in the future?
It’s also possible.
Bitcoin prices have fallen by more than 50% quite several times in the past.
With the introduction of Bitcoin ETFs, more retail investors are jumping in and pushing the prices higher and higher.
When there are a lot of speculation trading activities, a small number of people could get rich and most people could get burnt.
I stay away from Bitcoin because I don’t believe in it.
Gold is another popular way of hedging against inflation and also from market crashes.
According to Ray Dalio, Bridgewater Founder, he prefers to allocate a small percentage (i.e. 7.5%) of the All-Weather portfolio to gold.
Personally, I don’t invest in gold, not because gold didn’t appreciate over time (in fact, gold did appreciate over time), but because stocks of good businesses performed so much better over time than gold.
Also, one thing I don’t like about Freeport Investor is that it also recommends a stop loss for its stock recommendations.
Charles Sizemore mentioned the reason for the stop-loss is to help members exit the market when the market falls so that they can get back into these stocks at a better price.
I don’t get it.
Isn’t this supposed to be investing not market timing (i.e. trading)?
Nobody can pick market bottoms.
Peter Lynch said, “Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”
Warren Buffet didn’t make his billions by buying high-quality businesses and then selling them when the market fell and then hoping to buy them back again at a better price.
There are many platforms where you can go to find potential high-quality businesses such as Seeking Alpha, Morningstar, and Stock Rover.
Freeport Investor Pricing
How much does Freeport Investor cost?
It costs $149 a year.
But, it is just $49 for new subscribers for the first year, then automatically renewed at $149 a year.
As a paid member, you have the following:
- 12-month access to the Freeport Investor monthly newsletter
- Trade alerts and recommendation updates
- Special reports (e.g. The Rich Man’s Super Currency, Discovering the Dollar’s True Value, etc)
- Model Portfolio
Is it worth it?
It’s quite cheap for the first year.
But, I think there are other better alternatives if you are an active investor.
Freeport Investor Alternatives
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.
First of all, let’s take a look at their track record as of 26 June 2024.
Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 26 June 2024.
As of 26 June 2024, average Motley Fool Stock Advisor recommendations have returned over 756% since inception while the S&P 500 has returned 161%.
In short, the Motley Fool Stock Advisor has outperformed the market 4 to 1.
But, what about its stock picks?
Below is a table that shows you the performance of individual stock picks over the years.
As of 6th September 2023, Motley Fool Stock Advisor has had 173 stock recommendations with 100%+ returns.
[Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]
[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 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).
Some other stock-picking services that I’ve tried, 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.
By the way, I don’t buy every single stock recommendation by Motley Fool Stock Advisor.
I mainly used Motley Fool Stock Advisor to get stock ideas because they have a track record of finding multi-baggers.
For example, it first recommended Nvidia back in 2005, then again in 2009, then again in 2017.
It first recommended The Trade Desk in 2017, and has recommended it multiple times over the years as shown below.
It first discovered Netflix back in 2003 and has recommended it multiple times over the years as shown below.
So, I like to use the Motley Fool Stock Advisor as an important source of investment ideas.
I will read their research team’s analysis and then also do my own independent research on platforms such as Stock Rover and Morningstar before I decide whether or not I want to invest in the stock.
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 50% OFF 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 $99 and renews at $199)
So, for $99 a year- that’s just $1.80 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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However, if you are an active investor who likes to do your stock research, then I recommend Seeking Alpha Premium.
Personally, I use Seeking Alpha Premium to do my stock research.
Whenever I want to research a new stock idea, I go to Seeking Alpha and check on its Quant Ratings.
Seeking Alpha Quant Rating is a proprietary algorithm to rate stocks relative to their peers in the same sector in terms of value, growth, profitability, momentum, and earning revision.
If the Quant Ratings are very poor, then I don’t waste my time on this stock and move on to the next one.
If the Quant Ratings look good, then I can go and look at its financials and read up on Seeking Alpha Author’s analysis.
I especially like to read stock analysis that examines the bear case (i.e. potential risks) for the stock because it’s the downside that we need to worry about.
I not only use Seeking Alpha to do research every day, but I also use it to find stock ideas.
Below is the performance comparison between Seeking Alpha’s Strong Buy Recommendations vs the S&P 500 index.
As you can see, its Strong Buy Recommendations beat the S&P 500 index by a large margin.
[Note: Past performance is no guarantee of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to corresponding past performance levels.]
For example, one of Seeking Alpha’s latest Quant Rating Strong Buy stock recommendations is AppLovin.
It was given a Strong Buy around July 2023 when its share price was about $28.
Fast forward to 25th May 2024, its share price is about $82, up about 200% in 9 months.
Here are some other examples of Strong Buy Recommendations:
- SMCI (up 936.81% since Nov 2022)
- MOD (up 403.89% since Nov 2022)
- POWL (up 274.26% since May 2023)
- ANF (up 163.69% since Oct 2023)
- CLS (up 115.38% since Oct 2023)
[Note: Past performance is no guarantee of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to corresponding past performance levels.]
Pricing-wise, Seeking Alpha is also quite affordable.
For Seeking Alpha, there are three types of pricing plans:
- Basic: Free
- Seeking Alpha Premium:
$239/year$214/year (i.e. about $3.60/week) - Seeking Alpha Pro: $2400 per year
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Edward Dudgeon says
Hello Gladice.
Everything you said makes so much sense to me.
I would be interested in following you – and your investment thoughts / actions.
Can we do this?