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Show me the money!
How Taipan stock picks averaged 83% gains for you in 1999
by J. Christoph Amberger
Former CIA analyst, philosopher, martial arts expert and writer extraordinaire Robert W. Smith once wrote that the difference between involvement and commitment was like eggs and bacon: The chicken's involved. The pig is committed.
At Taipan, we're pigs if it comes to investment profits. Not only can't we get enough of 'em... I expect my editors to fully commit to you and the promise we have made to make you money come heck and high water.
In 1999, their commitment to you resulted in spectacular gains. Gains that stand up favorably to those chalked up in the major indices... who enjoyed the most spectacular growth in a given year -- ever!
| Dow Jones |
up 25% |
| NASDAQ |
up 84% |
| Russell 2000 |
up 20% |
| S&P 500 |
up 19% |
| Compare that to our results |
| Christian DeHaemer's "World Investor" picks |
up 53% |
| Siu-Yee Ng's IPO and Aftermarket picks |
up 357% |
| Brian Hick's Microcap picks |
up 54% |
| James Passin's picks: Global Services |
up 28%* |
| Global Commodity |
up 91%* |
| Global Technology |
up 81%* |
| Emerging Market Fund |
up 29.6%* |
| and our Taipan Millennium Conference picks |
up 84.6% |
| (*=including dividends) |
Only James Passin's U.S. Small-Cap Tech portfolio lost an average 30%.
That brings Taipan's average gain for 1999 to a handsome 83.1%.
Let me stress that our commitment to you doesn't allow for those strategically placed stop losses some other services use whenever it is opportune. Neither do we crow about "annualized" profits... What you'll see on the following pages is what you got in 1999, warts and all... heartpounding gains and some losses.
Which doesn't mean that our tally reflects exactly what your brokerage account did last year: We are very aware of the fact that any kind of formal tracking requires a healthy share of generalizations and assumptions.
These are the criteria we apply to our track record:
1. Buy and sell dates:
Unless marked otherwise, buy and sell dates are determined by the publication date. Throughout 1999, we assumed the publication date to be 3 days after the U.S. issue was mailed. Which means the date on which the majority of our subscribers (based on USPS distribution statistics) would have received the issue in the mail.
This coincides with the online release of the issue on this Website -- which is accessible only to Taipan members with the appropriate password -- which you find in every issue.
Given the increasing importance of instant accessibility through the new media, we have changed the publication date of each monthly Taipan edition for the year 2000 to be the date of its online release.
(You will find a comprehensive list of the publication dates for each month of the year 2000 here. You can also register -- free of charge -- for our Taipan e-Dispatch, which will alert you automatically via e-mail when the new issue is up.)
2. Prices and dividends
Any gains and losses reported in this overview only apply to the time period between Jan. 1 and Dec 31, 1999. For recommendations and open positions we carried over from previous years, we have taken the first trading day in 1999 as our entry level, thus providing an overview of its performance in the past calendar year only.
(We think that's only fair: If the respective stock had declined after our recommendation in 1998, we already accounted for its drop as a loss in last year's 1998 roundup. See "Year of the Tiger performance review: How you did in 1998")
If we advised to add to your position during the year, we have averaged the entry price. (It's marked with an *.)
Where no sell recommendation was issued, the closing price is considered the last trading day of 1999. Call option premiums are added to the closing price, while we tend to subtract dividends paid from the purchase price.
What that means for you personally
As I mentioned above, portfolio tracking requires generalizations. To arrive at a meaningful work-up of the numbers and at "average gains," we have to make certain assumptions. Such as that the hypothetical Taipan member invested an equal amount of money into each and every stock recommended. That each and every Taipan member was able to buy the stock at exactly the publication date level.
Which you and I know can never be. Because Taipan considers itself a smorgasboard of profitable investment ideas for independent individuals, not a prescriptive formula. So your individual decision to take us up on some recommendations and not on others can result in drastic discrepancies between your own portfolio tally and our general overview.
Stop losses
We do not include stop losses in our computation of our annual portfolio gains. (If we had, our average gain would exceed 83% by a long shot.)
Which doesn't mean we are opposed to you observing your own stop-loss provisions based on your personal threshold for pain: In fact, we recommend you observe a 20-25% stop loss on all your positions. It is really a very simple risk management tool that allows you to lock in profits while controlling your downside.
Of course, many discount and on-line brokers will not observe any kind of stop loss for you. (After all, if you only pay 8 bucks for an electronic transaction, what can you expect?) But that doesn't mean you can't observe and implement your own stop loss as you monitor your portfolio yourself.
All in all, I hope you will agree with me that your subscription fee to Taipan was money well spent. (Keep that in mind when it's time to renew!)
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