The Equity Performance of Investment Newsletters

This paper analyzes the equity-portfolio recommendations made by investment newsletters. The dataset spans 16 years, is free ofsurvivorship 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 nevermore 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