I'm not a subscriber to Fat Prophets, but was interested enough to check out their webpage. I was impressed, it almost seems too good to be true! So I looked at their Issue #50 report (Oct 01), which is provided as a free sample. It recommends a buy on Austar (AUN) at 30c, and also says that they gave a previous buy recommendation at 90c. On their Past Predictions page, which claims to list "all completed trades since inception", Austar doesn't get a mention. Presumably this means that they continue to hold the stock. But Austar hit 13c a few days ago, and is currently trading at less than 20c. This is a 78% negative return for those who bought in at 90c. So, exactly how low does a stock have to go before they bail out (what is their stop loss technique, if any)? If I was skeptical, I might ask: do they avoid selling because that will lower their publicised average return (because they only appear to report COMPLETED trades)? What is their performance like if you include all the trades they are currently holding on as well as completed trades? I think I'll hold of subscribing for now.
