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The Equity Performance of Investment Newsletters

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  • Andrew Metrick

Abstract

This paper analyzes the equity-portfolio recommendations made by investment newsletters. The dataset spans 16 years, is free of survivorship and back-fill biases, and includes the recommendations of 145 different newsletters. Overall, there is no significant evidence of superior stock-picking ability for this universe of newsletters. Some individual letters do have superior performance records, but this does not occur more often than would be expected by chance, and these records are never more extreme than would be expected for the sample size. In addition, while there is some short-term performance persistence, a strategy of buying past winners does not earn statistically significant excess returns.

Suggested Citation

  • Andrew Metrick, 1997. "The Equity Performance of Investment Newsletters," Harvard Institute of Economic Research Working Papers 1805, Harvard - Institute of Economic Research.
    • Handle: RePEc:fth:harver:1805
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    References listed on IDEAS

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    1. Basu, S, 1977. "Investment Performance of Common Stocks in Relation to Their Price-Earnings Ratios: A Test of the Efficient Market Hypothesis," Journal of Finance, American Finance Association, vol. 32(3), pages 663-682, June.
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