Now that we've launched a brand-spanking new
let me give you the history of Stockpickr. The site was more or less created in an act of frustration. What I wanted to do was manage money using the Stockpickr investment approach. What is that approach?
Well, it's based on the fact that there are many investors who are smarter than me
have greater resources in terms of analysts, investors, money to spend on legal services and proxy fights, etc. Off the top of my head, for instance, Warren Buffett, Carl Icahn, George Soros, T. Boone Pickens and Eddie Lampert fit into the category of investors smarter than me.
Let's say I am at breakfast with Buffett, and he says, "James, you know what I'm going to do? I'm going to buy 25% of BNI."
What are you going to do? Argue with Warren Buffett? No, of course not. You're going to go out and buy BNI.
Now, let's say you diversify that approach by piggybacking 30 to 50 different super investors like that, and you pick one or two positions from each. You make sure you're diversified across industries as well. For example, you can pick BNI from Buffett, MOT from Icahn, and RIG from Pickens, etc.
So, here's what happened. A well-known hedge fund with about $10 billion under management liked the idea. They wanted me and my business partner, Dan Kelly, to trade the strategy with about $100 million, and if it worked out they would take the number up to $200 million or more. But there were various catches. They wanted a 6% "cost of capital."
In other words, the first 6% goes to them. They would give us 15% of the profits above that. But there's more. They wanted us to "neutralize" every position. So, for instance, if we went long DNDN, maybe we should short some biotech ETF, etc.
Finally, they wanted me to stop all writing. When I ran through the numbers, it was too much risk to take. So we said, forget this; let's just put the entire idea on a Web site, including every other idea we've ever traded with (see the "Active Trader" section of the Stockpickr site for these strategies) and open the site up to everyone. Make a social network, so to speak. After many discussions with Tom Clarke, the CEO of TheStreet.com, and a little-known stock pundit named Jim Cramer, we decided to do this as a joint project.
Five million unique visitors later, Stockpickr has definitely worked out well. Currently, there are more than a dozen different methods for getting quality stock ideas via the site. I knew from my own experience that what people want more than anything, more than economic commentary, more than sector ideas, more than political insights, is raw and bulk stock ideas.
That's what Stockpickr provides. It's like the financial news with all the news stripped out.
Of the 8,000 public companies out there, the media tend to focus on just 20 of them each day. Consider that shares of about 6,000 of those 8,000 will rise over the next year. Stockpickr attempts to find and focus on those 6,000 stocks, because that's what the smartest money managers are doing.
Want to check out the new Stockpickr and see how it can make you money? Check out
this article, or go directly to
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for
The Financial Times
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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