How To Be A #1 Stock Picker Part 1

In this series of articles I want to show you how I became a #1 stock picker.
But the content in this short series will discuss it from a perspective that nobody has every talked about it. I will discuss some of the practicalities of stock picking success.
First, some credentials.
In 1995, I was selected to take over the editorship of Growth Stock Outlook a newsletter that had done very well under it’s previous editor.
We renamed the letter Wall Street Winners and have been publishing ever since.
So I entered into the Hulbert Financial Digest which is the publication that has been tracking newsletter performance for decades.
I was in the top 25% of letters at the end of year one. Same thing in year two.
But I was #1 for three years at the end of year three. But I was in the top 25% of the top newsletters for year three as well.
Basically, I was in the top 25% for three years in a row. So add up all three years and I was the top profitable newsletter for the three years combined.
What is the message?
Being good consistently makes you the best over longer periods of time.
Every single year, there were many newsletters that outperformed mine but nobody outperformed over the long run.

1 for four years.

1 for five years and so on.

Yet never #1 for one year.
There were two main reasons.
First, I controlled risk very tightly. I had a tight stop on every position. So I never had any big losses.
Typically, the stock picker who was #1 in one year was at the bottom the next year. They get married to their positions and start to believe their press releases. Their ego killed their performance. It might be that they were just lucky in the first year.
The second main reason I am always number one over the long run is that I never get married to my positions.
Let’s use Cathy Woods as a recent example although she is in the money management field.
She makes absolutely monster returns for a few years then loses 80% and gives it all back. Once again, her ego gets in the way.
She makes a prediction that Investment X is great and then can’t get out of that investment because then she has to say Investment X is not that good and might even be crap. Ego getting in the way again.
My approach has always been to be humble and to be honest when I no longer like something. I’ll talk more about this in tomorrow’s article.
The point of this article is that you should never try to be the best but to try to be very good every year and to never believe your press clippings.
Being consistently good gets you the best performance over the long run
Yes, we should try to do our best but not to the point where we over extend ourselves past our abilities.
The other main point of this article is consistency is very important for long term success. Being consistently good makes you the best in just a few years.
OK, here’s the pitch. Wouldn’t you like to subscribe to the best stock picking newsletter in the universe? Click here to learn more about Wall Street Winners.