In the past 6.5 months I have frequently written articles for Seeking Alpha with some of my investment ideas.
The key benefits of contributing to Seeking Alpha are (in my opinion) the transparency and the quality of discussion. In order to continue the transparency I'm going to review the performance of the investment ideas I have published on Seeking Alpha in H1 2013 to H2 2014. I have excluded investment ideas that I have contributed in the last month, due to the fact that they might not have played out yet. Remember I have a minimum 3-year time horizon when I invest.
In order to measure the performance of the investment ideas in as an objective way as possible I have decided to measure the performance of each investment idea in the following way:
- I have assumed that one were to buy or sell a stock at the closing price of the day that the article was published. In cases where an article has been published during a day where the market has been closed, I have used the closing price of the next trading day.
- I have used the so-called "best price" for determining the performance. The "best price" is the highest price of the stock in question in the following period of time in case of a buy recommendation. In case of a "sell" recommendation I have used the lowest price that the stock has traded after the investment idea has been published.
- In the one case where I have recommended buying a stock and the stock didn't rise higher than the price I recommended buying the stock at. I have used the "best price" after the stock has bottomed.
The following is the table that sums the performance of the investment ideas that I have published on Seeking Alpha.
As the table above shows 13 of my 14 investment ideas have been profitable to date. It furthermore shows that the average return of my investment ideas published on Seeking Alpha has been 21.74% and the median return has been 21.5%. Keep in mind that has been in a 5-month period.