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Is Intelligent Income Investor really good??
Is Brad Thomas, the expert behind Intelligent Income Investor, really legit?
Can you really get stock recommendations that provide you with a safe and reliable income stream and allow you to sleep well at night in all market conditions?
Does it sound too good to be true?
After trying out Intelligent Income Investor, let me share with you everything that I found out and help you make an informed decision.
Intelligent Income Investor Expert: Brad Thomas Background
Thomas received a Bachelor of Science degree in Business/Economics from Presbyterian College from 1984 to 1988.
In terms of work experience, Brad Thomas used to be a real estate developer until the 2008 crash when he lost almost everything.
After that, he turned his focus to REIT investing and became a REIT analyst and writer.
He is also a REIT analyst and writer on Seeking Alpha and Forbes.
In addition, Brad Thomas wrote three real estate investing books:
- The Intelligent REIT Investor Guide
- The Intelligent REIT Investor: How To Build Wealth with Real Estate Investment Trusts
- REITs For Dummies
In 2020, Brad Thomas founded “Wide Moat Research”, an investment research company that focuses on income-oriented investment opportunities (e.g. REITs, dividend stocks, etc)
In 2021, He became an adjunct instructor teaching REITs at the Schack Institute of Real Estate at NYU.
Lastly, he sells a wide range of REIT-related products (i.e. investment newsletters):
- Intelligent Income Investor (Usual Price: $199)
- Intelligent Option Advisor (Usual Price: $5000)
- Fortress Portfolio (Usual Price: $5000)
- High-Yield Advisor (Usual Price: $5000)
When I was purchasing Intelligent Income Investor to test it out, there were at least 5 upsells one after another to get me to either upgrade or buy their other products.
Intelligent Income Investor: Brad Thomas’ Investment Strategy
Inside the Intelligent Income Investor newsletter, Brad Thomas and his team recommend mostly dividend stocks that include REITs (real estate investment trusts), blue-chip stocks, asset managers and other dividend-paying income plays.
Brad Thomas has been writing about REITs for years and specializes in REIT investing.
Below are his criteria for REIT investments:
- The REIT is overall qualitative
- The REIT is fundamentally safe and well-run
- The REIT pays a well-covered dividend
- The REIT is currently cheap
- The REIT has a realistic upside based on earnings growth or multiple expansion/reversion
Let me use an example to demonstrate to you how Brad Thomas picks a “Strong Buy” REIT using the above-mentioned criteria.
Brad Thomas’s latest stock pick is Alexandria Real Estate Equities (as of March 2023), a REIT in the office sector.
According to him, it’s a good quality office REIT because it focuses on buildings housing lab space and research space that pharma and healthcare companies cannot be without.
He also thinks that it’s undervalued because he thinks that the company’s NAV is valued at 0.7x and P/FFO (i.e. price/funds from operations) of around 14.5x.
In his opinion, there is a potential upside of about 30% because he thinks that Alexandria Real Estate Equities should be priced at at least 20xP/FFO on a forward basis.
Whether he is right or wrong, time would tell.
In his disclosure, Brad Thomas bought shares in Alexandria Real Estate Equities for his own portfolio.
However, he mentioned that it is only less than 0.3% of his portfolio.
Personally, I feel that this is NOT really a strong vote of confidence if he really thinks it’s a “Buy”.
Brad Thomas also says that he applies the “value investing” strategy in his REIT selection.
According to him, he wants to buy undervalued REITs and then wait for them to normalize over time to reap capital gain and also dividends.
When these REITs become overvalued, then he would sell and take profits and put money back into other undervalued REITs.
If the REIT does not become overvalued but moves within a fair value or becomes undervalued, then he would buy more.
This sounds like a perfect plan.
Everyone knows you need to buy low (undervalued stocks) and sell high (overvalued stocks) to make money in the stock market.
But, it is actually easier said than done.
If not, everyone would be multi-millionaire stock investors.
Even Warren Buffet has said, everyone can make money in a bull market. It’s the bear market that really tells you who is a good investor.
2022 was a brutal year for REITs because the FED had been increasing interest rates rapidly and aggressively to almost 5% now.
So, how have Brad Thomas’s REITs in his personal portfolio been performing?
As I am a Seeking Alpha Premium subscriber and Brad Thomas is a prolific writer on Seeking Alpha Premium, I found that Brad Thomas disclosed at the bottom of his article that he has a long position in these four REITs ARE, BXP, HIW, and KRC as of March 2023.
Below are the share price charts of these four REITs.
As you can see, all four REITs have crashed by about 50% since their peak in early 2022.
If you had bought at the peak, you would be looking at a 50% loss right now.
Generally, dividend (i.e. income) investors choose REITs and dividend stocks because they are looking for stable dividend payments as well as possible capital appreciation.
Most importantly, dividend investors are more risk-averse and prefer less volatility.
However, as you can see, REITs can be just as volatile as high growth stocks when the macroeconomic environment changes.
So, the question becomes, could these REITs drop lower or are they bottoming out?
No one knows for sure.
That’s where risk management and proper valuation and analysis come in.
The key is to NEVER overpay for a stock.
The underlying business could be great, but if you pay too high a price, your investment could be losing money.
Personally, I think it’s wise NOT to blindly follow anyone’s stock recommendation.
Instead, it’s very important to do your own research.
Intelligent Income Investor: Stock Picks & Performance
There are three kinds of portfolios recommended by Brad Thomas through the Intelligent Income Investor newsletter:
- SWAN (i.e. sleep well at night) Portfolio: high-conviction stock picks that benefit from strong long-term tailwinds
- Core Portfolio: dividend growth stocks from all non-REIT equity sectors but more economically sensitive
- REIT Portfolio
- Special Situation Portfolio
These portfolios were only launched in October 2022 just when the stock market bottomed.
There is no stop-loss for each position because Brad Thomas and the team typically prefer to average down their cost basis when blue chips sell-off, as opposed to selling them into weakness, especially if they still think that their bullish thesis is still valid.
As you can see from the screenshots below, some recommendations show an open date of more than two years ago.
The reason given is that the Intelligent Income Investor newsletter is a combination of two of Brad Thomas’ previous services. And they are continuing their “highly successful portfolio” here at Intelligent Income Investor.
There are 11 stock recommendations with an open date of March 2020 which is the Covid market bottom.
There are 4 stock recommendations with an open date of mid to late 2021.
Lastly, there are 3 stock recommendations with an open date of around May 2022 which coincided with a market bottom, and 10 stock recommendations with an open date of October 2022 which is the most recent market bottom.
Naturally, I am a skeptical person.
I can’t help but think that these NEW portfolios probably should be given the “Best Market-Timing Award”.
Right now, these portfolios look pretty good because all (except one) are winning positions.
But, including only the winning stock picks and excluding losing positions from previous services would not give us a clear idea of how Brad Thomas’ stock picks have performed in the past.
So, how have some of Brad Thomas’ past REIT stock picks performed?
I got some clues from some other users’ reviews about Brad Thomas’s other REIT-focused investment research products.
As seen from their feedback, Brad Thomas’s iREIT recommendations did very badly when the FED started to raise interest rates.
Below are a few of his recommended REITs mentioned in the comment above.
With REITs being so volatile, it’s good to see that Brad Thomas has introduced blue chip dividend stocks to balance out the volatility although he specializes in REIT investment.
Intelligent Income Investor: Pricing
So, how much does Intelligent Income Investor cost?
What do you get as a paid member?
As a paid member, you will get access to the following:
- Every Monday of the month, you receive the latest research and stock recommendation
- Access to all the open recommendations with buy-up-to-prices, analysis, and sell alerts
- SWAN Portfolio
- Brad #1 Growth Stock
- Reports including “Sucker’s Yield-How To Avoid Them”
The cost is $199 per year with a “90-day Wide Moat Research Credit Satisfaction Guarantee”.
What that means is that if you don’t find Intelligent Income Investor” suitable, you won’t get a cash refund but you will get a credit refund that you can use to purchase other investment newsletters by Wide Moat Research.
Personally, I prefer to have a full cash refund guarantee.
Is There Any Better Alternative?
There are a lot of good stock research and analysis platforms that help you find high-quality dividend stocks or ETFs.
For example, Seeking Alpha gives you a lot of helpful tools to find, research, and analyze dividend stocks.
For each stock, you get ratings (i.e. with “A+” being the highest and “C-” being the lowest) on the following:
- Dividend safety
- Dividend growth
- Dividend yield
- Dividend consistency
On top of that, you get its dividend history as well as future dividend estimates from analysts.
Seeking Alpha not only helps you evaluate this stock in terms of dividend payouts but also helps you evaluate the stock in terms of “Value”, “Growth”, “Profitability”, “Momentum” and “Estimated Earnings Revisions”.
So, how much does Seeking Alpha Premium cost?
Currently, there are three types of pricing plans:
- Basic: Free
- Seeking Alpha Premium:
- Seeking Alpha Pro: $2,400 per year (mostly for hedge fund managers)
With the basic free version, you can only get very limited access to Seeking Alpha stock in-depth news and analysis.
You also won’t get access to Seeking Alpha Author Rating and Quant Rating, Top-rated stocks, and all the premium stock analyses.
So, is it worth paying for Seeking Alpha Premium?
$167/year works out to be about $14/month (i.e. $0.47/day).
A cup of Starbucks coffee costs about $2.75.
Personally, I have been using Seeking Alpha Premium for my own stock research and analysis.