About

About MarketBeaters

Besides running an informational website, MarketBeaters provides individual investors with guidance on how to assemble an investment portfolio that will outperform the general stock market. The target audience consists of individuals who seek market beating returns but do not want to pay the excessive costs associated with owning mutual funds or other professional money management.

MarketBeaters stands out from other investment services and newsletters by providing the following:

  • Pay for Performance – Your subscription is free if our recommended portfolio does not beat the S&P 500 Index. Since inception MarketBeaters is beating the S&P 500 Index 86% of the time.
  • Simple Execution Plan – You are not required to actively trade so no need to be a day trader or spend a bundle in commissions
  • Maximum Return with Minimum Risk – Subscribe and learn how minimize risk through superior diversification.  Also learn how to value stocks based on free cash flow and balance sheet risk and not be blinded like most investors by reported earnings which are often inaccurate and artificially inflated.

Pay Only for Performance

No other investment service, newsletter, or investment fund is so bold or confident in their ability to beat the stock market as to offer a complete refund should they fail to do so. A typical mutual fund charges 1% annually in management fees regardless of performance. Hedge funds take 20% of any profits and when there are no profits they still take in 2% in annual fees from their investors. Few, if any investment newsletters offer full refunds should they not beat the stock market. MarketBeaters is different however.

The individual investor has many options available when seeking investment advice. Unfortunately they all charge for their services regardless of their performance. What’s even worse is that most do not even produce market beating returns. A basic rule of thumb that has been proven over and over again is that the S&P 500 beats about 2/3 of professional stock pickers over time.

Simple Execution Plan

You may be wondering if you will have to buy and sell a lot of stocks & mutual funds every month if you want to track the portfolio’s performance. The answer is no. Turnover in the portfolio is very low typically with 1-2 transactions each month. Unlike other investment services, there is no need for you to follow the market daily.

Of course, the investments that you decide to make are entirely up to you. You may want to track the results with a simulated portfolio or just pick out a few ideas to add to your already well diversified portfolio.  If you prefer to have minimal involvement in your investments but still want to obtain market beating returns you can simply copy all of the trades in the Marketbeaters portfolio which you will have access to as a subscriber.

Maximum Returns With Minimum Risk

MarketBeaters takes a two pronged approach to beating the market. The first component is to minimize risk. This is accomplished through superior diversification of industries & market capitalization among US & International equities.  Risks are also mitigated by determining maximum downside risk of individual investments by scrutinizing company balance sheets and growth prospects.  MarketBeaters accepts worst case scenario as a given when looking at a company’s liabilities.  This greatly reduces the number of stocks to chose from but also helps to prevent investing in any company that could collapse in a downtown as witnessed among many giant financial institutions of late.  None of these passed the initial MarketBeaters balance sheet screen.

The second component (maximum returns) is achieved by identifying the best values in to invest in.  Our unique and proven stock valuation model allows us to do this by finding fast growing companies that produce large amounts of free cash flow.  It doesn’t rely on reported earnings like the abundance of other models out there which allows our subscribers to no follow the herd.  Past debacles like Enron and WorldCom as well as the latest financial crisis which has taken down AIG, Bear Sterns, Countrywide, and Fannie Mae prove just how meaningless earnings really are.  Earnings often look fantastic right up until the end. Cash flows are different however.  Cash flows show actual dollars that are flowing into or out of a company’s coffers and can not be manipulated easily like earnings to make a company appear more profitable than it really is.

For a more in depth discussion of free cash flow and other factors relating to value that are considered in the model please check out our Valuation Methodology section.