DISCLOSURE: THIS POST MAY CONTAIN AFFILIATE LINKS,MEANING That I GET A COMMISSION IF YOU DECIDE TO MAKE A PURCHASE THROUGH MY LINKS, AT NO COST TO YOU. PLEASE READ FULL DISCLOSURE HERE
[Update July 2022: Paul Mampilly has just announced that he would leave Banyan Hill Publishing and no longer be affiliated with Profit Unlimited.]
So, is it worth it to subscribe to Paul Mampilly’s Profits Unlimited?
Is he legit?
Can you really achieve better investment returns by following his stock recommendations?
Are there any better alternatives?
Who Is Paul Mampilly?
So, what is Paul Mampilly’s background?
Should you listen to him and follow his stock recommendations?
Here’s his background that I found on his Linkedin profile.
He finished his primary school education in India, then attended high school in Dubai.
Then he went to Montclair State University to get his degree in accounting in 1991.
Following his MBA graduation from Fordham University in 1997, Paul Mampilly started out as an assistant to a financial advisor and portfolio manager.
Later on, he slowly rose to become a portfolio manager managing private clients’ portfolios at Bankers Trust.
Then, he moved on to become a research analyst covering mainly healthcare stocks.
In 2006, he joined Kinetics Asset Management as a portfolio manager.
Here’s the performance of one of the funds that he co-managed.
As you can see from the period of time marked by the red lines, the price of the mutual fund essentially stayed the same from 2006 to 2011.
From 2011 to 2012, Paul Mampilly made investment recommendations for 4 newsletters for Common Sense Publishing.
After that, he left to join Agora Financial in 2014 as the author and editor for Agora Financial’s FDA Trader which is designed to alert you to breakout moves in the medical markets, whether that be an announcement from the FDA or an overlooked drug trial that could ultimately drive huge stock market gains.
About one year later, Paul Mampilly left to join Stansberry Research in 2015 as the author of “The Professional Speculator ” which is a stock advisory service focused on speculative stocks.
By the end of the year, he quit and started his own stock trading newsletter and advisory service called “Profits Unlimited” in partnership with Banyan Hill Publishing.
Paul Mampilly’s Stock-Picking System
What is Paul Mampilly’s investment strategy for Profits Unlimited Newsletter?
He uses a stock picking system called the GoingUpness system.
At the core of GoingUpness system are demand and supply.
To be more specific, there are six factors to look at when you determine GoingUpness.
These six factors are broken up into two sets.
The first set is comprised of the qualities you look for in stock:
The second set is the three abilities that a stock needs to have:
Let’s start with the first set.
InDemandness means that a stock is in demand by buyers.
Essentially, someone keeps buying the stock at current prices or higher.
Paul Mampilly believes that most of the time, once the stock price falls below the trend line, you can expect it to keep dropping.
So, he recommends buying stocks that are at or above their trend lines (i.e. 10-day moving averages)
On top of that, he wants stocks that are at least 20% above their 52-week lows.
Here is his reasoning.
He thinks that an official bull market is one where a stock has gone up by 20%.
And the 52-week low is an important indicator for investment analysts because if a stock hits it, it’s probably headed lower.
But, if a stock hits a 52-week low and then climbs 20%, it’s officially in a new bull market.
Once a stock is in a bull market, he wants to see it rise steadily to its 52-week high because he thinks the odds of it going higher are better.
Also, when you see the stock go up two days in a row, with rising volume, it also signals InDemandness.
When you see this happening three days out of five, for two or three weeks, that’s a sign the stock is going to keep climbing.
Insiderness refers to insiders with good knowledge of the business buying share either in the last six months or after a rapid decline.
It means that the insiders (i.e. the management) don’t believe whatever put pressure on the stock is going to be permanent.
It’s also a sign that they think the stock is cheap and likely to go up soon.
Buyness means that a stock is hard to buy.
When a stock is being accumulated by insiders, they make the stock unattractive to other investors.
An example is the difference between the ask price and the bid price is higher than normal.
The difference between “quality” and “ability” is that “ability” is something that relates to the company’s stock, rather than the people associated with it.
Let’s start with the first ability.
ScarceAbility means there’s a limited quantity of stock.
For example, many companies use shares to pay compensation and bonuses to their employees.
This dilution of the shares is not good for shareholders.
ValueABILITY means that a stock has to control something of value, and there are two main types.
It owns a growing business, where sales are rising, profits are expanding and free cash flow is soaring.
Apple is a good example.
Its revenue and profits have been growing year after year.
Or the company owns a highly valued asset, such as prime real estate, a big stake in another company, a huge amount of gold or silver, a collection of valuable art, etc.
Sometimes, the value could be in the company’s large cash holdings.
The key to this kind of ValueAbility is that the stock must be selling at a large discount (20% or more) to the value of these assets.
ManageAbility means that a stock’s primary business is easily managed.
Essentially, this means there’s nothing innately wrong with the economics of the company.
So, it could still do well even if it would be led by a regular person.
His strategy is meant to find stocks that would go up right away.
In other words, he is trying to time the market.
But, the thing is no one can predict the market in the short term.
Even Warren Buffet says that he and Charlie Munger only looks at the business and ignores the short-term market volatility.
Paul Mampilly’s Stock Picks
Most of Paul Mampilly’s picks in 2021 are young, unproven, future-looking companies, especially technology stocks.
He is betting on the “possible potential growth” of these unprofitable companies.
One of Paul Mampilly’s 2021 stock picks is TDOC.
It has since dropped almost 90% from its peak.
Another stock pick is Momentus.
It has dropped more than 90% as well since its peak.
Most of his stock picks in 2021 have dropped massively so far, causing his Profit Unlimited subscribers to lose a lot of money.
Below is a conversation between two paid members of Paul Mampilly’s Profit Unlimited ( i.e. PU as mentioned below) on Twitter.
There are so many other stocks such as BYND, RH and TSP.
As you can see, the risk is very high when you invest in these so-called high-growth stocks that are still not making money yet.
Why did Warren Buffet manage to grow his wealth exponentially even through crises, wars, and market crashes?
He has a very sound investment strategy – value investing.
That means only investing in profitable companies with a wide moat and that are currently undervalued.
Morningstar is one of the best investment research and analysis service that helps you find these undervalued fundamentally strong companies with a sustainable competitive advantage.
Better Alternative To Paul Mampilly’s Profits Unlimited
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 the 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 5th September 2023.
As of 5th September 2023, average Motley Fool Stock Advisor recommendations have returned over 510% since inception while the S&P 500 has returned 132%.
In short, the Motley Fool Stock Advisor has outperformed the market 3 to 1.
But, what about its individual stock picks?
This metric is important because I might not be buying every single stock recommendation made by the Motley Fool Stock Advisor.
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.]
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).
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.
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.
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.
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 $1.70 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.