We have updated our equity recommendations report card for the third time (previous updates were in July2008 and January 2009). The report card provides a summary view of the performance of the recommendations we have provided to clients since the inception of Capital Alliance Securities.
We have done this so that we can provide transparency about how successful our recommendations have been, in helping investors make profitable investment choices through stock calls within our core research coverage universe. We have also highlighted some of our failures along the way, in the hope that this process helps us produce better recommendations in future.
Summary of performance
On an overall basis, “Buy” recommendations have worked out very well, with 50 of them outperforming the ASPI and only 12 of them under performing the ASPI. On average, our Buy recommendations outperformed the ASPI by 51% in relative terms, whilst the return generated in absolute terms was 122%.
Our Sell recommendations have also worked out well, as 39 of them underperformed the ASPI and were successful calls, while 9 of them outperformed the ASPI and as such, were unsuccessful. As we had hoped our Sell recommendations underperformed the index by 14%, but reflecting the very strong bull market over most of the period, they still generated an absolute price performance of 26%
“It is fortunate for Wall Street as an institution that a small minority of people can trade successfully and that many others think they can.” Ben Graham
“It is not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong” - George Soros
“There is only one side of the market and it is not the bull side or the bear side, but the right side.” - Jesse Livermore -