StockSpotter
by CI Staff
StockSpotter.com is a website that provides daily buy and sell recommendations for stocks. It is meant to be followed with minimal effort on your part. According to the website, StockSpotter.com performs thorough quantitative analysis on nearly 3,000 stocks daily. This website is one of the few that provides a Monte Carlo simulation of their recommendations and reports their results.
After the market close each day, StockSpotter.com begins its daily stock analysis. The website is updated after the analysis is complete. Before logging in, subscribers can check to see if the signals have been posted by viewing the status line located at the bottom of the main page.
Logging in allows subscribers to see five different menu options. The New Actions page shows the new recommendations along with the company name, trading signal (buy, sell short, etc.), entry date and signal rating. The other menu options include Watchlist, Open Positions and Help.
According to StockSpotter.com, all of their signals are engineered for execution at the market on the next open so there is no need to specify limit orders, although that may still help. The maximum time for any position is 10 trading days, or two weeks, but alerts to close a position may come sooner. Each buy signal is accompanied by a rating of two to five stars.
What really separates StockSpotter.com from other stock picking websites is the transparency of their picks and performance numbers. Once a new signal is published on the website, it becomes static and cannot be modified or removed. The website keeps a complete history of all trading signals, and they state that simulated trades and performance are retained for at least two years. The website keeps figures such as average profit per trade, and you can expect an average profit of 3.62% for five-star ratings and 2.80% for four-star ratings, based on previous 12-month numbers (as of December 14, 2010).
The website also provides a Monte Carlo simulation, which estimates performance by simulating a $5,000 investment that is always invested in the market. They create the summation by using one year of random daily profits from random trades over the past two years. This process is repeated 10,000 times to yield a distribution showing the number of occurrences for each of the profits and losses. A chart summarizes the most likely annual profit and the probability of exceeding breakeven.
Overall, StockSpotter.com has shown impressive gains and detailed performance calculations. It still requires making a significant number of trades, so it is not for everyone, but it is a promising website that deserves some attention.
Price: $120/month; $30 for 30 days trial