More Information about BI Research

Below you will find more information on the newsletter format and on how to get started.

Information on the Newsletter Format

The newsletter is published every 6 weeks, but on rare occasions this may be plus or minus a week. The issue is priced at the Friday close, finalized over the weekend, printed on Monday, mailed Monday afternoon and dated that coming Wednesday.

The issue almost always starts with a new 2-page recommendation, but we won’t just dredge one up if we can’t find something good or the market looks shaky. In addition, EVERY issue includes a detailed update averaging nearly half a page on EVERY stock we are currently following, which means ALL previous recommendations, until we say to Sell (and explain why). After that you won’t see the stock followed. A market commentary is also included in each issue as is the recommended allocation between stocks and cash.

Our BI Ranking System has guided us to making good decisions for 30 years and is a key factor in our successful track record to date. This proprietary, weighted average index looks at things like past and projected earnings growth over the near term and long term, changes in analysts estimates, earnings surprises, Wall Street sentiment, relative strength, takeover prospects, financial condition, etc. Generally, stocks ranking over 8.0 are Buys, over 10.0 are relatively rare and usually very good performers, but under 5.0… it might be time to sell.

The first line of each stock’s update lists the stock symbol, price at last Friday’s close (C$ means Canadian), the exchange on which the stock trades (besides the obvious, NMS means National Market System (NASDAQ) and VSE means Vancouver), the gain over the recommendation price, the latest BI Rank and our Buy/Hold/Sell advice. We generally don’t own the stocks when initially recommended, but if somebody connected with BI Research does, the fact is disclosed with an "*" and footnote. No buying of recommended stocks occurs after we decide to recommend it until the Thursday afternoon after the issue is mailed. And in any event, we never close out a position until our subscribers have had a chance to do so.

We also have an Update Line which you can call to get our take on significant moves in our stocks or timely developments.  The Update Line can handle 24 listeners simultaneously, all of which will hear the message starting from the beginning.

The best way to benefit from BI Research is to own our highest rated stocks. Our new Buys may move up in a hurry, but most drop back some afterwards. In any event other stocks on our Buy list may have a higher BI Rank than our newest recommendation, with less competition.  We don't set stop losses, but subscribers can, of course, do as they wish on that front.  

Getting Started with BI Research

This section addresses the questions most frequently posed by new subscribers who want more guidance on how to get started buying stocks followed by BI Research.

For starters, new subscribers are not encouraged to buy Hold rated stocks. New portfolios can be fashioned in a number of ways, depending on your own investment nature. The most frequently used method is for investors to pick and choose amongst stocks we rate Buy, selecting for purchase only the stocks that they like best. We like this approach because this makes us partners in the decision. If you make money, it’s because you used your own judgment, not just ours. I, myself, consider an investment newsletter subscription a success if it gives me even one good investment idea a year.

Another way, of course, would be to buy all of our Buy rated stocks, and then each new recommendation as it comes out (within the recommended Buy limit, of course). Under this approach you still need to decide when to get out. An obvious approach is to sell when we say Sell, in which case your portfolio would eventually contain every stock followed in the newsletter (since every stock we’ve recommended is updated for you in detail in every issue until we advise selling it). But Mark Hulbert, Editor of  The Hulbert Financial Digest, makes the argument that returns should be improved if you sell stocks downgraded to a Hold. The theory in doing this, of course, is to stay invested in just those stocks most highly recommended at any point in time (i.e., cherry picking). This will, in fact, generally improve your returns.  The only problem with this approach is that it involves more trades and more commissions as well as more capital gains transactions on which to pay income tax. Taking this one step further, an investor might even decide to invest only in Buy rated stocks with a BI Rank over 9.0, for example, since the higher the BI Rank the better a stock performs, on average. Of course, we do not recommend 2 stock portfolios. You still need to diversify. In truth there are limitless ways to approach utilizing BI Research.

As to how much of each stock you should buy, equal dollar amounts is probably the best answer, but not the only one. You could, for example, weight your portfolio more heavily towards higher BI Ranked stocks, or those we seem most excited about in the write-ups. Or you could buy more of the ones you like best.

If you were looking for a simple rifle shot answer… there unfortunately isn’t one. It all depends on your financial and tax situation, your ability to take risk and withstand a loss, and your investment prowess/nature. However, it’s a good idea never to have money in the stock market which you will need any time soon, because if the market falls out of bed, you wouldn’t want to be prevented from buying a car or a house until your stocks recover. If you can’t afford to lose the money,  or need it in the near-term, it shouldn’t be in the market. The unexpected can happen at any time, and sometimes does. Finally, always diversify your holdings amongst stocks and industries as much as you can, and don't excessively overweight any one position.  I hope this helps you in sorting out what investment approach is best for you.

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