The Worthington Stock Letter

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Afraid to Follow Your Stock Newsletters Recommendations? Been Burned Before?

Join the Top 2% If You Want to Beat the Market

Despite grand promises, virtually every stock newsletter underperforms the stock market over time according to Hulbert’s Financial Digest; except a small handful – the top 2%.  If you want to stack the odds in your favor, make sure you’re subscribing to the best of the best.  Below, we’ll highlight one of your best options along with a terrific blueprint for finding winning stocks on your own.

First – Avoid This Mistake

The greatest risk in subscribing to an underperforming newsletter is not your lost time or the subscription price, but the lost investing funds. If you don’t follow one of the top newsletters, at the very least, you’ll fall further behind your retirement goals which leads to guilt and disappointment.  The worst scenario is that you lose a lot of money. A lot of you have been there. I was there too in my younger years.

So why do investors continue to subscribe to underperforming newsletters?

Advertisers know that investors can’t resist the siren song of being one of the first to invest in the next Apple, Amazon, Bidu, Netflix or Priceline. They prey on the emotions of investors not wanting to miss out on the next great thing. This causes readers of the ad to suspend disbelief and ignore the overall performance and risk of the newsletter as they start dreaming about the riches they’ll gain and how envious their friends will be.

The end result tells a different story as the losses continue to climb. While having some big winners is necessary to beat the market, academic research has shown that more money has been lost chasing hot new companies than just about any other investment approach.

Let’s talk about how to fix that.

The Top 2% of Stock Newsletters

Why listen to us? The highlighted stocks in the Worthington Stock Letter have beaten the S& 500 9 out of the last 10 years by an average of over 4%, while returning 50% more money to investors during that time. While the last couple years haven’t been kind to value investors, it hasn’t slowed us down one bit.

Annualized

Returns

Worthington

Stock Letter

S&P 500

Total Return

Worthington

Difference

Growth $100,000

Worthington

Growth $100,000

S&P 500

Worthington

Difference

2017 24.2% 21.8% +2.4%
5-Year 19.0% 15.8% +3.2% $238,635 $208,230 +$30,405
10-Year 13.7% 8.6% +4.6% $361,081 $228,191 +$132,890

In addition to being an award winner, our performance has beaten the likes of Motley Fool, Jim Cramer, Forbes, Navellier, Kramer, Morningstar and a host of other more expensive newsletters. If that’s not enough of a reason to listen to us, we don’t know what is.

Let’s get started.

The Secret to Beating the Market and Retiring Wealthy: “The Davis Double Play + Warren Buffett’s Inflation Moat”

While there are a couple proven ways to beat the market (and a whole lot more ways to lose money), the simplest is to copy what the greatest value stock investors of all time have done. Michael Worthington distilled the teachings of value investing legends such as Benjamin Graham, Warren Buffett, Shelby Davis and John Templeton into a simple set of rules to follow. These seven rules became the foundation for the Worthington Stock Charter which has helped the Worthington Stock Letter comfortably beat the market averages. If you follow the seven fundamental investing rules, you too can crush the market with a little work.

“When I combined what I learned from investing legends such as Graham, Buffett, Templeton, Lynch and even O’Neil with my proprietary ratings, things really took off. The returns since then have been phenomenal.” – Michael Worthington

Shelby Davis Double Play “If you discover a low P/E stock with the potential for long-term earnings improvement, you’ve just found a gold mine.”- Michael Worthington

Shelby Davis was one of the greatest investors of all-time. Davis turned $50,000 of his wife’s money into $900 million over 47 years. We don’t have the space to go into the whole story, but Davis attributed his success to what he referred to as the “Davis Double Play”. The Davis Double Play consists of investing in low-P/E stocks that don’t reflect their true earnings potential. As the company increases its earnings, investors bid up the P/E multiple, ensuring outsized gains for the stock price.

Essentially Davis focused on low P/E stocks that didn’t reflect the true future earnings potential of the company. He specifically searched for low P/E companies that were already growing earnings and had good management in place.

Warren Buffett’s Inflation Moat “You can often get away with investing in companies with high levels of debt and net tangible assets in the short-term during economic expansion. In the long-term, investing in those types of companies will obliterate your portfolio.” Michael Worthington

Shelby Davis was an acquaintance of Warren Buffett’s father, Howard Buffett. I’m sure that had a great influence on the future success of Warren Buffett. Most investors are familiar with Warren Buffett’s recommendation of only investing in a company with a clear competitive advantage in the market. This competitive advantage (or moat) allows the company to sell its products at a higher price and provides a barrier to entry from competitors, thereby protecting profits. As Warren Buffett says; “How deep and wide is the moat around your castle?” The wider and deeper the moat around the castle (products/services), the harder it is for competing companies to penetrate the market.

What most investors don’t pay attention to is the inflation moat. Warren Buffett illustrates this perfectly with the example of his purchase of See’s Candy. In 1972 See’s Candies was earning $2 million in revenue on $8 million in net tangible assets. He compared the performance of See’s Candy to a company earning the same $2 million, but requiring $18 million in net tangible assets. Both companies generate the same earnings and have similar cash flows which causes investors to value them the same.

But what happens over time when inflation doubles the price of goods? See’s Candies will require an additional $8 million in net tangible assets to earn an additional $2 million in sales. The second company needs an additional $18 million in net tangible assets to generate the same additional $2 million in sales.

As inflation grows, so do the costs of doing business, including servicing debt levels. This helps illustrate why using only earnings per share and cash flow can lead an investor astray over time. As inflation rises, the second company must invest more than twice the money for net tangible assets which means it will earn lower rates of return and have less money to return to shareholders. Therefore, it’s best to avoid the second type of company unless you’re getting it for a much cheaper valuation.

Growth Potential “The market gets attracted to certain stocks that have an upcoming catalyst or good story and those are the ones I want to be in”– Michael Worthington

Between the years 1983 and 2006 more than 90% of market returns were the result of the top 25% performing stocks. If you want to outperform the market, you need to be invested in the top 25% of stocks. Therefore, any stock you invest in must have a good story or an upcoming catalyst that will ignite growth and attract institutional investors into the stock. If the stock doesn’t have a compelling story, you’ll be stuck with the discarded cigar butts of the stock universe (as Warren Buffett calls them), tying up capital and under-performing the market. The growth story matters.

Liquidity “I’ve watched people lose a lot of money because they couldn’t get out of a position fast enough.” “You need institutional investors behind you for a sustained price movement and that only occurs in stocks with a high enough volume and price level.”– Michael Worthington

It’s vitally important that you’re able to easily get in and out of stock investments. If you invest in non-liquid stocks your costs are higher due to the larger bid/ask prices and it takes a long time to build up a decent size position.

The greatest risk occurs when the stock begins selling off on a bad news event or negative investor sentiment. If you’re not able to liquidate your stock position quickly you can become trapped and suffer large losses trying to get out of your position. Make sure the stock you’ve invested in has enough volume for you to get out of your position within a day or two.

Safety “My ultimate goal is to maximize returns with the least amount of risk, that’s the true measure of investment success”– Michael Worthington

Value investors first and foremost should be looking for stocks with a margin of safety built into their price. Financial models have limitations because of the assumptions built into growth projections over time. The further you go out in time, the lower the degree of accuracy across any number of projections. In addition, there will always be unpredictable black swan events that will cause severe losses if you take on too much risk.

If you focus on undervalued stocks using conservative financial projections and don’t place too much of your money in any one sector, you minimize downside risk without limiting upside price potential.

Management “It’s the work I do after crunching the numbers that makes the difference. After all my work I’ve got a list of possible investments and I just wait for the right price.”– Michael Worthington

The final check to go through is the most time consuming. This is where the individual skill comes in. It determines the winners from the losers. You must do the painstaking research of analyzing financial reports, sifting through industry magazines looking for trends and analyzing the management team.

Some of the questions you must answer include the following. Has the management team been successful in the past? Are they honest and forthcoming? Is management doing the right things for shareholders such as paying additional dividends, buying back stock at a reasonable price, funding acquisitions of related companies with their own competitive advantage or reinvesting the extra cash back into the company? How big of a competitive advantage does the company have? What industry trends are in place? Are there any near-term potential disrupters to the industry? Are there any footnotes in the 10K or 10Q that cause concern?

The entire list is longer, but the questions above provide a great starting point.

The Best Time to Buy – Big Gains With Less Risk “I used to be a straight up value investor. As long as the stock was priced lower than what I thought its intrinsic value was, I bought it at that price no matter what and waited for others to see what I did. That really limited my upside potential because it tied up my capital in “dead” stocks that didn’t go anywhere for a long-time. I think that’s a trap even experienced value investors fall into. The easiest way to make big money in the stock market is to only buy a stock when you have highest probability of catching the “meat” of a stock price move. The meat of the move is the sweet spot where you catch the majority of a stocks gain in a short period of time with the least amount of risk.”– Michael Worthington

The Worthington Stock Letter uses the PPOI Indicator™ which stands for Psychological Points of Influence™. It’s an algorithm that provides a good entry point for maximum price gains in the next 12-24 months. This is akin to using technical analysis to help determine your buy and sell points. A healthy side benefit is that it can limit your stock exposure during severe market corrections.

Shelby Davis and Warren Buffett agree that the best time to buy a stock is when it has gone down in price due to an overall market correction, but still retains solid growth prospects into the future.

An Easier Way to Beat the Market and Retire Comfortably

Some of the brightest doctors, lawyers and finance professionals have dedicated a good portion of their lives to beating the market. They’ve read the top investing books, bought the most expensive software, paid for high-end coaching and still lag the market. Along the way they’ve given up pleasurable hobbies and sacrificed time away from their family and friends.

You don’t have to do that to beat the market and retire wealthy. There’s a much easier way.

It takes hundreds of hours to research companies, construct financial models, stay on top of company news, follow industry trends, analyze management and scour 10Qs and 10Ks for nuggets of priceless information. If you don’t have the time to do that, simply leverage the research done by verified top rated newsletters and investment advisors to find your list of possible investments and wait for the right price.

If you choose to become a subscriber to the Worthington Stock Letter, you can sit back and let my team do all that hard work for you. Leveraging technology and staff, we’re able to unearth value stocks with an upcoming catalyst in place that will give you the best chance of experiencing eye popping returns over the next 12-24 months. You’re essentially paying our research team pennies an hour to do all the hard work for you. That’s value.

So what do you think?   Click Here To Get Our Best Ideas

Here’s What You Receive If You Join Our Family of Successful Investors

The Worthington Stock Letter is different. The Worthington Stock Letter gives you winning undervalued stocks that aren’t found in the headlines. The big winners you’ll miss because they’re not on your radar – that’s value.

1) You’ll get exclusive access to our best value and dividend stock recommendations, the same ones that have consistently outperformed the stock market averages and other top rated newsletters.

When we present a stock, we’re expecting a 20- 25% gain in a 12-month period. Sure, we’ll get the occasional 100% gains but we’re not swinging for home runs. We’re more concerned about eliminating big losses. This is one of the biggest keys to beating the market while sleeping well at night.

2) Who said value investing was dull? Our highlighted stocks have included Priceline (PCLN), Middleby Corp (MIDD), Apple (APPL) and United Health Group (UNH) which have gone on to 1,000%+ gains.

While the future returns of many of our stock recommendations have been mind blowing, we want you to focus on the overall performance of all our stocks in relation to the risk you’. Any stock newsletter can get lucky a couple times. Instead, focus on the fact that the overall returns for the Worthington Stock Letter have been stellar, putting us in the top 1% of all newsletters.

3) You’ll receive a complete analysis of highlighted stocks including buy and sell prices to help maximize profits.

One mistake many value investors make is getting into a stock too early which ties up their capital, thus limiting their potential returns. Another is getting into a stock too late or staying in a stock too long and watching helplessly as profits disappear. Our PPOI technical indicator will help you avoid those traps and keep more of your hard-earned money.

4) You can spend hundreds of hours doing the research yourself or save your sanity and time by letting us do all the work for you.

Our requirements are so stringent and our research so thorough, that on average only 15-20 stocks will qualify in any given year. Essentially, you’re only paying us $10-$20 a stock recommendation for all that work which turns out to be pennies on the dollar for all the research we do.

5) In addition to our highlighted stocks you’ll be granted access to our actual stock portfolio with buy and sell prices. You typically don’t find this feature except in ultra-expensive newsletters costing you up to $4,000 a year because it involves more time and risk.

Typically stock newsletters only provide you with a list of stocks to buy. We provide the portfolio at this price level because we want to help you out as much as possible. This access may change in the future, but you’ll be locked in if you subscribe now.

So what do you think? Ready to take a small leap of faith (based on proven results over a decade) to join our family of successful investors?
First, before you join us, here a few things you should know. As a value investing newsletter we typically don’t recommend high growth stocks like Amazon or Facebook. If you’re looking for a steady diet of high growth, momentum or speculative stocks, this isn’t the right newsletter for you.

 We remove any of the risk by offering you a full money back guarantee!

You can get in at the special introductory rate of $199  $97/year.

We provide you with the lowest price possible the first year to give you a chance to get familiar with our newsletter and build stock positions as you deem fit. After the first year your subscription rate will be billed at the current rate of $199 year, as long as you choose to stay with us. The Value Investors Association provides a 30-day money back guarantee for the Worthington Stock Letter.

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“Yours is the only investment newsletter I can’t live without!”

P.S. If you currently subscribe to any of the popular investing newsletters and you’re serious about beating the market, shouldn’t you subscribe to the top performing value and dividend newsletter?  Join us today!

 

*Here’s the required legal disclaimer.  Past performance does not guarantee future results. Results will vary by individual due to price fills, commissions, taxes paid and timing of purchases and sales. Performance was calculated by holding highlighted stocks for 12 months, buying and selling at the month end closing price and rebalancing the portfolio monthly to hold an equal amount in each stock. There are periods of time where growth and momentum stocks will outperform Value and Dividend stocks. We cannot and therefore make no guarantees that our subscribers will beat the returns of the S&P 500, Wilshire 5000 or other investing indices and newsletters by investing in stocks listed in the Worthington Stock Letter.

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