The mistake that many investors make occurs when they sell too soon. The Prudent Speculator’s average holding period is four years, and my average holding period is 27 months. Most investors are familiar with Warren Buffett’s quip: “My holding period is forever,” but the quote brings up an important point-don’t sell too soon. Occasionally, my subscribers question my discipline to stay invested while the stock market is declining-but they cheer when their stocks take off in the early stages of a vigorous rebound! Both Buffett and I stay fully invested at all times, and this philosophy has worked wonders for our investors. My holdings declined 40% and Warren Buffett’s Berkshire Hathaway declined 44% during the financial crisis, but we both recovered quickly. In Barron’s, Mark Hulbert points out that The Prudent Speculator portfolio declined 60% during the financial crisis of 2007 to 2009. Selling late and buying late will lead to poor performance in most instances. Investors almost always take too long to get back into stocks after the market begins to recover. Too many investors try to time the market by selling when the stock market or an individual stock holding begins to slide. One of my philosophies, with which The Prudent Speculator and Warren Buffett agree, is to stay fully invested at all times. Baron Rothschild said it best, “The time to buy is when there’s blood in the streets.” And I agree with Warren Buffett’s philosophy, “Be fearful when other investors are greedy.” Subscribers need great fortitude and discipline to carry out many of the lessons that I teach. Most importantly, I agree with the authors of The Prudent Speculator: successful investing requires nerves of steel. What lessons do I teach in Cabot Benjamin Graham Value Investor that lead to great performance?ģ Lessons You Can Learn from My Experience In fact, my subscribers’ performance during the past 21 years has exceeded not only Hulbert’s best undervalued stock investment newsletter, but also Warren Buffett’s Berkshire Hathaway (BRK-B). My subscribers know from experience that investing in my recommendations of the market’s best undervalued stocks will lead to better performance than any of Hulbert’s newsletters, including The Prudent Speculator. I’m not whining, though, because I’ve had great success in attracting and holding investors to my investment advisory. Hulbert never included my advisory, Cabot Benjamin Graham Value Investor, in the 200 newsletters that he followed. However, Mark Hulbert and his Hulbert Financial Digest were unable to track all investment newsletters published in the U.S. Hulbert Ratings, LLC then tracks the performance of the newsletter by multiple metrics, culminating in a Sharpe ratio, a measure of risk-adjusted performance.The Speculator, created in 1977 by Al Frank, who later turned the reins over to John Buckingham (pictured below right), often garnered Hulbert’s number one rank for 10-year, 20-year, and 30-year performance-a lofty feat, indeed. The Hulbert ratings of investment newsletters are determined by maintaining hypothetical investment portfolios according to the buy and sell advice of each newsletter. Hulbert publishes a newsletter honor roll that lists and grades investment newsletters that have outperformed in both up and down markets.In 2016, MarketWatch/Dow Jones ceased publishing the Hulbert Financial Digest, at which time Mark Hulbert began publishing newsletter ratings through the company Hulbert Ratings, LLC.For nearly 36 years, Hulbert published newsletter rating scores in the Hulbert Financial Digest, which was acquired by MarketWatch/Dow Jones in April 2002. The Hulbert rating tracks the buy and sell advice of investment newsletters and evaluates performance using various metrics to arrive at a risk-adjusted performance score.A Hulbert rating is an investment newsletter score created by financial advisor Mark Hulbert to track the performance of investment newsletters over time.
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