One of the products included in our Bespoke Premium research service is our daily Trade of the Day report where each day we highlight a single stock that looks attractive based on the myriad of metrics we incorporate into our analysis. Many Bespoke followers have recently asked for the performance of this report, and we highlight the results below.
With 2009 now complete, we went back and tallied the performance of all Trade of the Days to see how they performed versus the S&P 500. In 2009, the cumulative return of our Trade of the Day ideas was +42.8%* (not including commissions and/or fees) compared to the 26.9% return of the S&P 500 tracking ETF (SPY). As shown in the chart below, the cumulative return of our Trade of the Day throughout 2009 was consistently above the $1,000 starting amount, even as the S&P 500 was down 25% at its lows in March.
The second chart below highlights the individual weekly returns of each day's idea. Our three biggest winners of the year were ESI (1/15: +27%), MOS (2/3: +27%), and CHIC (8/18: +26%), while the biggest losers were SPAR (6/29: -37%) and TK (2/10: -18%). Of the 246 ideas, 134 (54.5%) were profitable one week later, while 112 (45.5%) were unprofitable. The alpha generated by the Trade of the Day was due to the margin of difference between the average performance of winners (up 5.4%) compared to the average decline of the losers (-4.5%).
Beneath the charts below, we have also provided a table with the performance of our Trade of the Day ideas over the last month. Of the 19 ideas since 12/7, the average one week return has been 2.26% with 15 out of 19 profitable trades. As always, we would remind readers that past performance is no guarantee of future results, and we always advise investors to do their own due diligence.
To receive daily access to our Trade of the Day report, subscribe to Bespoke Premium today.
*For the purpose of this exercise, we calculated the returns using a one week holding period from the opening price on the day of the report (irregardless of whether or not they hit our guideline stop or target price). Using a hypothetical portfolio of $1,000, on 1/2/09 we put one fifth of the portfolio ($200) and invested it in the first day's idea (which was GS). After holding that position for one week, we rolled the proceeds into the Trade of the Day from January 9th. On the second trading day of 2009, we invested another $200 (one fifth of the portfolio) in that day's Trade of the Day, and held that for one week, etc... Using this method, an investor would always be maintaining a portfolio of five stocks making one trade per day. Please email us if you would like a spreadsheet with all of the Trade of the Day ideas for 2009.