Have You Ever Wanted Be Able to Invest Like Buffett, Lynch, Graham, Zweig and O'Neil?
 
 

Outperforming the market over the long-term is extremely difficult. Over 90% of active fund managers fail to produce market beating returns over the long-haul. That means that most of the time when your money is sitting in mutual funds, it is being outperformed by the general market.

Don't pay for underperformance. Editor John Reese has thought it out– why not simply follow the proven winners and do what they would do?

These legendary investors have tested their theories, tweaked their approaches based on the results obtained, tested their theories again, and finally, have solidified their strategies into proven money winners- continuing to tweak them as they gain additional experience.

What resulted from Reese's bolt of common sense was the Validea Hot List newsletter, which invests using only the strategies of investors who have consistently beaten the market over the long term- Lynch, Buffett, Graham, Dreman, Fisher, O'Neil, Neff, Zweig and others.

The Validea Hot List identifies those stocks which pass multiple guru strategies. The quantitative system scours over 6500 securities and selects the best-of-the-best. Stocks found in the Validea Hot List portfolio are fundamentally sound– possessing both value and growth characteristics. The portfolio’s holdings trade at attractive valuations and have low betas. They truly are the best-of-the-best.

The result: A diversified model portfolio consisting of fundamentally sound small and large cap securities that have proven to outperform the market.

Risk and Return Statistics

Validea Hot List

S&P 500

Annualized Return since 7/15/03

20.3%

6.4%

Total Return

147.9%

35.9%

Beta

1.16

1.0

Sharpe Ratio

0.81

0.18

*Returns above are based on a simulated portfolio that has been running live from 7/15/03 to 6/16/08. Returns do not include dividends or  trading costs.

 

What’s most impressive though, is that this portfolio has generated these types of returns without selecting risky stocks– the average PE of the stocks within the Hot List is around 14 and the portfolio's yield is 2.4%. This is because the goal of the Hot List’s rigorous selection methodology is to find stocks with the potential for strong price appreciation, while at the same time limiting downside risk, or, as Ben Graham called it, selecting stocks that have a “margin of safety.”

In addition, to make sure you’re getting the most return for your money, John rebalances the portfolio once every 28 days because he has found that monthly rebalancing produces the highest historical return for the 10 stock portfolios. He constantly searches for the top scoring stocks and replaces those that have dropped as a result of deteriorating fundamentals. That means that, at any given time, you are only invested in the ten MOST ATTRACTIVE stocks according to the strategies of the world’s greatest investors. It’s the absolute best of the best when it comes to stock picking.

We know it sounds great, but the big question you must be asking is: Does it work? You bet it does. Since its inception on July, 15th 2003, the Hot List portfolio has generated a 166.7% return vs. the S&P’s return of 41.3% through May 20, 2008. That’s over THREE TIMES the return of the market and an excess return of 117% over the S&P 500.

The Validea Hot List is for serious, long-term investors who believe in and appreciate the strategies of history’s most triumphant investors. Reese does not believe in trying to time the market. Rather, he stays fully invested at all times (remember, equities have produced the highest return versus all other investments since the Great Depression). The quantitative strategies he deploys are not limited by size or style requirements. They seek out opportunities in the market across all industries and sectors.

Each bi-weekly issue of Validea Hot List contains:

Easy to follow buy/sell recommendations on our 10-stock guru-based Hot List model.

Detailed point by point Pass/Fail analysis of all of the Hot List portfolio holdings.

“Guru Ratings” of each stock based on how well the stock matches the relevant guru’s strategy.

John Reese’s latest take on the market and details surrounding our quantitative strategy.

Analysis of guru methodologies, portfolio and market stats and much more.

  Meet our Forbes Guru: John Reese

John Reese is the founder and CEO of leading investment research web site, Validea.com, and the exclusive money management firm, Validea Capital Management, LLC. He is also portfolio manager for the Omega American and International Equity funds offered in Canada.

John is a pioneer in the online investment research arena. He holds two U.S. patents in the area of automated stock analysis and is considered an expert in the field of quantitative stock selection using the strategies of investing legends. He is co-author of the best selling investment book, The Market Gurus: Stock Investing Strategies You Can Use From Wall Street's Best ( Dearborn, 2002). In addition to writing investment commentary for Forbes.com, John is also a columnist for TheStreet.com and a former participant in MSN Money’s Strategy Lab.

He is also editor-in-chief of Validea’s flagship newsletter, the Validea Hot List. The Validea Hot List takes the top investment ideas from multiple guru-based quantitative strategies and combines them in an easy to follow model portfolio that has proven to consistently generate market-beating returns without taking on excessive amounts of risk.

He holds a master's of business administration from Harvard Business School and a bachelor's degree in computer science from the Massachusetts Institute of Technology.

John lives in West Hartford, Conn., with his wife and three children.

 

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