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Is it worth subscribing to Lyn Alden Premium Stock Research?
What is her investment strategy?
Does her investment strategy outperform the market?
How have her stock recommendations performed so far?
I have just tried Lyn Alden’s Premium Stock Research Service, so let me share with you my experience and help you make an informed decision.
Lyn Alden Investment Strategy
So, who is Lyn Alden?
What is her background?
She went to Penn State University for her Bachelor of Science in Electric and Electronics Engineering FROM 2006 TO 2010.
After that, she got her Masters in Engineering Management in Rowan University.
She worked for the Federal Aviation Administration as an engineer for 12 years from 2009 to 2021.
While working there, she started her website to write about investing in 2016.
Currently, she is running her paid premium stock research service through her website lynalden.com, and also promoting investment-related affiliate offers such as M1 Finance.
Recently, she self-published a book called “Broken Money” which essentially tries to promote Bitcoin as digital gold.
On top of that, she is actively involved in a couple of Bitcoin-related companies as either director or partner.
I don’t believe in Bitcoin and don’t invest in any crypto coins because I agree with Warren Buffet and Charlie Munger’s views on cryptocurrency.
By the way, blockchain technology is an entirely different matter.
Bitcoin recently hit an all-time high of $70,000 after crashing about 75% to a low of around $20,000 in 2022.
Anyone who bought Bitcoin any time in 2023 would have made a handsome profit.
It’s possible that Bitcoin’s price could go even higher in the near term because anything can happen when people are overly euphoric about something.
But, it’s fair to say that Bitcoin could likely crash again any time in the future.
This kind of wild price fluctuation is not a characteristic of a stable and reliable asset.
Below is the price chart of Bitcoin, Gold, and a good business.
As you can see, owning a good business in the long term gives you much better returns with less volatility.
Bitcoin, in my opinion, is a highly speculative asset class.
When it comes to highly speculative assets, some people become rich almost overnight but more people end up losing their hard-earned savings in the end.
Now, let’s take a look at Lyn Alden’s investment strategy.
According to her, her investment strategy is to find bargains in all types of markets (emerging markets, US, developed foreign markets, commodities, gold, Bitcoin, etc) with a long-term view and broad diversification to manage risks.
In her own words, it’s “value investing with a global macro overlay”.
Here is her investing process:
- Maintain a high-level view of 30 countries (e.g. debts, currency reserves, trade deficits, population growth, etc)
- Monitor US business cycles and those of other countries
- Analyze the company’s top-line growth potential
- Analyze the company’s profitability
- Company dividends
- Determine valuation changes
As a general rule, Lyn Alden keeps all her positions (except broad ETFs) at 5% or less of her portfolio to minimize the risk associated with any one company.
Here’s an example of how she does a deep dive on a stock – Realty Income.
Here’s what she covers in the deep dive:
- Price to Adjusted Funds From Operation Ratio
- Price to Tangible Book Ratio
- Dividend Yield
- Realty Income Property Portfolio (mainly free-standing single-tenant buildings with triple-net lease agreement)
- Realty Income Risks (growth might slow due to fewer acquisition opportunities, which results in lower valuation; possible business disruption risks if they don’t keep up with disruptive technological trends.)
I think this type of deep dive is not particularly insightful or valuable.
You can find this type of deep dive on other platforms such as Seeking Alpha and Morningstar.
Here’s what Morningstar analysts say about the possible risks and downsides.
Lyn Alden Stock Picks & Investment Portfolio
There is a free model portfolio published in her free public newsletter:
More Conservative/Simpler Version: | Allocation (%) |
Dividend Stocks | 20% |
International ETFs | 15% |
Growth Stocks | 10% |
Commodity Producers | 10% |
BIL | 10% |
TIP | 10% |
iShares 1-3 Year Treasury ETF (SHY): | 10% |
Sprott Physical Gold (PHYS) | 5% |
Grayscale Bitcoin Trust (GBTC) | 5% |
SPDR Small Cap Value ETF (SLYV) | 5% |
For her paid premium stock research service, there are a few model portfolios:
- Fortress Income Portfolio
- ETF Portfolio
- No Limits Interactive Brokers Portfolio
- Other holdings
Overall, I think her portfolio allocation is quite reasonable, especially for very risk-averse investors.
But, there is no point in copying HER portfolio allocation because everyone has different risk tolerance levels, investment objectives, and also unique financial situations.
Again, you can find similar portfolio allocations elsewhere online.
For example, in Ray Dalio’s book, you can find his all-weather portfolio.
A key difference between Lyn Alden’s and others’ portfolio allocations is that she is a big advocate for Bitcoin. So, you will find Bitcoin in all her model portfolios.
Now, let’s take a look at her Fortress Income Model Portfolio.
There is something else I don’t like about her model portfolio is that there are a lot of activities (selling, trimming, buying) going on almost every month.
For example, in July 2022, she recommended selling Texas Instrument to buy T Rowe Price Group.
In Oct 2022, she recommended adding 1% to T Rowe Price Group position.
In Dec 2023, she recommended selling T Rowe Price Group to buy Pepsi Co.
The holding period for this stock T Rowe Price Group is less than 1.5 years and was sold for a loss.
The same happened to her other stock recommendations such as eBay.
Lyn Alden recommended buying eBay in Sep 2020, then recommended increasing eBay position in March 2021, and then recommended trimming eBay position in Sep 2021, then trimming it again in Dec 2021, then recommended increasing eBay position in March 2022, then recommended selling the entire eBay position in Oct 2022 at the lowest point.
Here’s another stock pick – Bank of America.
Lyn Alden recommended buying BAC in Feb 2021 at around $34.5, then recommended increasing BAC position at around $43 in March 2022, then recommended selling the entire BAC position at around $36 in Oct 2022.
Actually, Lyn Alden recommended selling both eBay and Bank of America to buy RTX and TFC in Oct 2022.
Let’s take a look at the price chart of RTX and TFC.
Both these stock picks did not do well.
Of course, there are winning stock picks.
For example, Lynn Alden recommended buying Chevron at around $95 in Feb 2021, then recommended exiting the position at around $163 in Mar 2022.
One and a half years later, she recommended buying it again at around $165 in Oct 2023.
Personally, I prefer to buy a good company at a good price and then hold it for at least a few years.
There are just too many trading activities.
It seems like she does not have a lot of conviction in her stock pick in the long term.
As for her ETF model portfolio, there isn’t much to talk about except there is quite a bit of diversification (developed market ETF, emerging market ETF, small-cap value ETF, bond ETF, real-estate ETF, global energy ETF, treasury ETF, T-bill ETF, physical gold ETF, Bitcoin ETF, etc)
Generally, a portfolio consisting of ETFs is less volatile than a stock portfolio.
Now, let’s look at some of her other holdings.
She tried to short-sell Tesla in 2020 and 2021 a few times and suffered big losses because Tesla shot up almost 10 times in one year.
Warren Buffet said, “Short selling, it’s an interesting item to study because it’s, I mean, it’s ruined a lot of people. It is the sort of thing that you can go broke doing.”
Why?
When there is a lot of euphoria, the stock price can skyrocket to ridiculous levels.
Also, there is a limit on your profit in short selling, but there is unlimited loss in short selling.
So, it’s best to stay away from short-selling unless you know what you are doing.
Lyn Alden also bought Mitsui, Mitsubishi, and Hitachi in Feb 2021 after Warren Buffet disclosed his holdings.
These positions did well as the Japanese stock market rose to new highs recently.
But, her Chinese stock picks BABA and Tencent did very poorly.
She bought BABA at around $240 in March 2021 and sold it at around $90 in April 2022.
Also, she bought Tcehy at around $70 in Aug 2020 and sold it at around $45 in April 2022.
Overall, I think there are other sources of investment ideas that you can rely on.
For example, I have my two go-to sources of stock ideas:
Lyn Alden Premium Stock Research Service Pricing
So, how much is Lyn Alden Premium Stock Research Service?
It costs $25/month or $199/year.
As a paid member, here is what you get:
- A macro update about the business cycle twice a month (e.g. the current state of the U.S. business cycle, weakness or strength in international markets, etc)
- A high-conviction stock idea with analysis twice a month
- “Top Twelve” Updated Stock List
- Real-money multi-asset model portfolios
Is it worth it?
She writes about macroeconomics, but I don’t find it that useful.
You can find most of her data points here: Federal Reserve Economic Data.
It could be a good read if you like this kind of macro analysis, but I prefer more actionable ideas.
I think there are better platforms or services that you can use to find good stock ideas.
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