Sunday, July 8, 2007

Zacks Research Wizard Review

It has been one month since I purchased Zacks Research Wizard and I've had many inquiries into how I like it. As most of you know, I'm an avid user of AAII's Stock Investor Pro and I like it very much. I will continue to use it because it has proven itself over the last few years and I've found the folks at AAII to be reliable and the information in Stock Investor Pro to be accurate (and profitable).

To be fair, I have very limited experience with Research Wizard. However, I have been able to run a bunch of backtesting and various screens over the last month and three of the four stocks listed in my "To the Moon" portfolio are stocks I pulled from Research Wizard screens that I've put together.

First I'll let you know what I like:

It's Fast.
With Stock Investor Pro I get information on a weekly basis that I have to download to my computer. I then have to unpack the file and run the screens using the program.

With Research Wizard, the data is centralized on Zacks servers. When I run a screen, my computer (which must be online) grabs information from the server and displays the results in one to two seconds. Even backtesting huge amounts of information only takes a minute or two at the most. That's cool.

It used to take me hours (or even days) to test a theory I had about a particular screen. I often had to go through old spreadsheets or hard copies to figure out how particular ideas performed. Stock Investor Pro has no backtesting capability built in. To test ideas I would download historical data (on a weekly or monthly basis) and run the software to see what stocks met criteria.

With the backtesting, the process is almost instantaneous. That gives me the freedom to dream up an idea and test it almost immediately. I know that backtesting has its problems and inaccuracies, but it can give a very good idea of what works and what doesn't.

It's very easy to use.
I've worked with several screening programs. Some make my eyes glaze over as I read all of the mathematical formulas that I need to punch in to create a screen. Research Wizard is extremely intuitive. I really like the ability to pare down my screens and find the "Top" stock in a certain percentage, relative strength, volume, etc.

What I don't like:

It's expensive.
At $133 per month, it doesn't make sense to use it unless it is helping you to beat the market substantially. The verdict is still out on whether or not Research Wizard will make my trading better, but the results of the "To the Moon" screen so far suggest that the possibility exists.

Marketing for Research Wizard is confusing.
I'm not an idiot, but I had a hard time weeding through the Research Wizard web site to get the information that I needed. The folks on the phone are much more helpful (they have to be to make a sale), but I would have appreciated knowing the price up front ($1,600 per year). Also, there is an add-on that allows more complex backtesting that I assumed was included in that price. It isn't. It's $1,600 MORE. It looked interesting but I couldn't justify the price, yet.

I feel a bit isolated.
With the amount of information that Research Wizard generates, I'd expect to see some sort of community or forum dedicated to sharing winning strategies or interesting ideas. Zacks sends an e-mail every day, but it's kind of a conglomeration of all Zacks does. I love information and I would like to see more coming from Zacks about Research Wizard.

Well, that's my take so far on Research Wizard. I'll continue to keep you up to date about my satisfaction in upcoming months.


65Trader said...

I've been using Research Wizard for a little over a year. Here are my thoughts:

- Things that you think should work, don't work. This teaches you alot about what makes stocks go up or down.

- Once you think you have a great screen backtested, you can start the screen from a different date and get different results. The screen may not be as good as you thought.

- High turnover screens need to have better results (than low turnover screens) to make up for the slippage and commissions.

- I see a couple of the screens that come with the program really breaking down this year.

- The program is expensive, but if you throw more money into your account (or use more margin), it should make up for it.

- As with any trading strategy, look at the drawdown and ask yourself - could you handle it?

- A good market timing model can help most screens by reducing exposure during market declines or trading ranges.

- MSN money screen is a good free alternative, but there is no backtesting and it doesnt track as many thing as Research Wizard.

- I can only imagine what the big boys use if this software is available to the retail trader now.

Rick said...

I am with you on the cost, I tried the trial for 2 weeks and decided 2 weeks wasn't enough so I ask for another 2 weeks and they let me. It is by far the best screening tool I have tried, but there is no way I can justify the cost.

I also couldn't figure out the price without calling them. I was shocked when he told me the price. I was prepared to buy it for $500/year.

I would assume the high price is part of the reason you can't find any forums or information on it. Most of the people using it are probably professionals that are not going to post on forums and such.

Thank you for your review and keep us up to date with how it goes.

I was very skeptical to spend the $200 on Stock Investor Pro, but after you and another site I follow kept praising it I decided to give it a try. I am only into my 6th week, but so far it has moved to the top of my list of valuable tools. I wish AAII would add the capabilities for backtesting, I would easily pay another $200-$300 for that option.

Anonymous said...

Your Stock Breakthrough at Zacks Research Wizard‎
From: Jon Schaefer (
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Your Stock Breakthrough
Dear Former Research Wizard User,

After you looked at the Zacks Research Wizard, there have been some exciting new developments. Several of its exclusive stock screening strategies have been generating returns that are "ridiculous," smoking the S&P 500. Even more remarkably, there's a single strategy that outdoes all the others.

It's spot-on dead center for your particular investment needs and goals. The report below from Zacks VP Kevin Matras fills you in.

The report sets forth a special – and very time-sensitive – opportunity. Because of recent Research Wizard upgrades and the spectacular performance of certain strategies, there will be a substantial price increase starting this coming Saturday.

That's why I want to give you the chance to get aboard before Friday, July 13, at midnight. You'll save up to $200.

I strongly encourage you to not to delay. Please call or email me right now to take advantage of this opportunity.

Best regards,

Jon Schaefer
Account Representative
Zacks Investment Research
(800) 767-3771, ext. 9304


The Only Investment Strategy that's Spot On for Your Portfolio!
One Research Wizard stock screen exploded to a compounded return of 3,501.8%. Could you do even better? Read on . . .
Dear Former Research Wizard User,

There's a compelling secret you may not have explored during your Research Wizard free trial. It concerns some of the most powerful stock-picking systems in existence.

Each of these blockbusters is based on the cold, objective truth of Zacks Rank with its proven market-beating capability. Plus, each is enhanced with features that have blown returns "through the roof."

For example, since 2001, the Best Buys strategy with its four-week hold period has generated an average total compounded return of 1,129%. Its annual growth rate is 47.5%. (This is not a misprint.) And yet, Research Wizard also offers strategies with yields that are greater still . . .

Return on Equity 2 (ROE2) is up 1,428.6% and averages 52.5% per year.
Big Money is up 2,877.8% and averages 68.8% per year.
Filtered Zacks Rank 2 (FZR2) has reached 3,501.8% and averages 73.9% per year.
How explosive is that FZR2 strategy? Let's say you started with $10,000 in 2001 and bought and sold on its signals. By July, 2007, you'd have amassed $360,180.

The strategies continue to generate explosive returns

What have these epic stock screens done for us lately? For the first half of 2007, their year-to-date compounded returns are still crushing the S&P 500's 9.1%. The totals are: Best Buys: 15.1%, Return on Equity 2: 17.5%, Big Money: 48.4%, and Filtered Zacks Rank 2: 47.9%.

Research Wizard strategies, for example, have recently scooped out such whirlwind gains as . . .

17.1% on WCC in 20 days (Best Buys)
23.4% on GT in 40 days (Best Buys)
20.2% on CRY in 5 days (Filtered Zacks Rank 2)
26.6%% on FEIC in 5 days (Filtered Zacks Rank 2)
20.6% on PRGX in 10 days (Big Money)
27.6% on SMTX in 5 days (Big Money)
27.1% on BGC in 40 days (Return on Equity 2)
30.3% on PCR in 20 days (Return on Equity 2)
Imagine piling up profits on picks like those. Now here's something even more remarkable. There's a strategy that could be even better for you than FZR2 or any of those other those Research Wizard market-crushers.

Your ultimate personal screening strategy

That strategy is absolutely unique and here's why – it's customized just for you.

The Secret Behind Zacks' Research Wizard
It's so simple and yet you can't duplicate it anywhere else. First, choose from a treasure-trove of 650 criteria, updated daily, from Zacks' database. Then simply ask the Research Wizard to screen more than 8,500 stocks with your selected criteria.

You end up with stock picks that custom-fit your needs, goals, and risk tolerance.

Only want to see stocks with prices over $5? What's the highest P/E ratio you're willing to accept? Enter your criteria, then backtest up to 6 years through Zacks historical data to see exactly how your new custom stock-picking system would have performed.

If you aren't excited with the results, just change the criteria and backtest again. That's how we came up with strategies that beat the market year after year.

And that's how you can build the best possible stock-picking strategy for yourself.

In fact, using the Research Wizard, you can create it yourself. Just tweak one of the winning systems that are already built into RW, or build an entirely new one using your favorite criteria.

For more details, please call (800) 767-3771, ext. 9304 Or email .

After you tried it, there have been important upgrades with no increase in cost (till this coming Friday). Now you can . . .

Download the Backtesting Database whenever you wish. This comes in handy when you'd like to backtest on the train or plane. Of course, you can still do your research directly online.

Interactive Java Charts. Now, every time you run a screen, you can access a scrollable list of ticker symbols and click for an immediate chart. You never have to leave the Research Wizard to see each stock chart.

Fundamental Overlay Studies. You can now instantly access our four most popular overlays: Price & Consensus, 12 Months EPS, Price & EPS Surprise, and Broker Recommendations.

Zacks Equity Research Reports. These combine quantitative Zacks models with in-depth, up-to-date reports from our staff of 50 non-biased, independent analysts.
Big financial institutions pay tens of thousands of dollars for such research and tools

Your price for Zacks Research Wizard is still less than $4 a day – so little to pay for 15 powerful, proven, built-in screening strategies – and also for the upgrades that make it more convenient than ever to create your own.

In fact, the price is so ultra-low right now that we're raising it after Friday, July 13 But, because you tried the Research Wizard earlier, I want you to have the chance to claim the new, upgraded version at its original price.

This is a one-time savings opportunity – don't miss it

You can save up to $200 by contacting us right now! Please call (800) 767-3771, ext. 9304. Or email We'll fill you in on the price options and answer any questions you might have.

Please call today. Don't wait to get started on the stock-picking strategy that's dead-on right for you!

Special Savings Ends
Midnight, Friday, July 13
Call (800) 767-3771, ext. 9304
Or email now:
Kevin Matras
V.P., Zacks Investment Research

P.S. We don't plan to ever offer Research Wizard at so low a price again. This is the only tool you need to shape your perfect strategy. Why not save money on it?

Disclosure: The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index.

Backtested Portfolio Performance Calculations: At the beginning of each holding period, a list of stocks (portfolio) is generated. The period's returns are calculated using the % change in price from the beginning of the holding period to the end of the holding period, using Friday's closes for both the start dates and the end dates, plus any applicable dividends. The returns stated above are compounded returns using a four week rebalancing period and excluding commission costs, slippage or any other real-world constraint.

Disclaimer: Stock trading/investing involves risk and you can lose some or all of your investment. Hypothetical results may not always be duplicated in the real world. Backtesting can also at times produce an unintended look-forward bias. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading, not the least of which is the ability to withstand losses or to adhere to a particular trading strategy in spite of trading losses. These are material points which can also adversely affect actual trading results.

Gregory said...

You should check to be sure, but I'm almost certain that the Research Wizard has survivor-biased data. Their institutional products do not, the Trading Strategy Evaluator and Rank Analysis, but when our firm reviewed the range of products they offered a year or so ago, I am pretty sure we rejected the RW because of the survivor bias. In case you're not familiar with the term, it means that dead symbols (from dead companies - either acquired or bankrupted) are not included in the database. So if you had used your screen six years ago in reality, it might have recommended stocks that went bust, and you wouldn't know that from the backtest. I would never use a backtester with survivor-biased data. Good luck. - Gregory

StockPunk said...

I've had a lot of people warn me about survivor bias (which is something I had never heard of before I purchased Research Wizard). I wouldn't think it would have a tremendous impact on a portfolio of 5 to 10 stocks, but I'm a novice. I'll do my best to check into things.

Anonymous said...

Survior bias is a show stopper. It will skew your results and cause you to overestimate returns.

Meanom said...

Thanks - your post and the comments are valuable! I'm beginning to explore screens. I now have the basics about RW and about "survivor bias".

Anonymous said...

The Research Wizard, which Zacks sells for $2-4k/yr., is positioned as a tool to improve on the predictive ability of the lone Zacks Rank by adding filtering criteria to a query then backtesting those criteria over 6 years (2 years with the trial version) of historical data. Inevitably the first criteria added to the filtering screen is the Zacks Rank, which according to Zacks promo material is based on analysts' earnings estimates, analysts ratings, earnings growth, earnings surprises, etc. The other screening criteria which can be added to the screen definition are very similar to factors already included in the Zacks Rank. It therefore seems unlikely that one could very easily improve on the predictive ability of the Zacks Rank, especially considering that it was supposedly developed over the past 20 years. Hence, subscriber-developed models which perform better in backtesting than the lone Zacks Rank would seem to be the result of nothing more than random happenstance in the crunching of historical data. I asked Zacks to comment on this suggestion - no response yet.

Anonymous said...

I recently received this msg. from Zacks re: their Research Wizard. "Two filters in particular, when added to the Zacks Rank of #1, not only narrows down the number of qualified stocks to a practical portfolio size (approx. 10-12 stocks), it also increases its performance as well." I responded "If you know these filters improve the performance of the Zacks Rank, why don't you (permanently) include them in the model". No response from Zacks.

Anonymous said...


the biggest problem with RW in addition to the survivor bias is that the backtesting function doesen't give accurate results. In a weekly backtest, RW uses the closing price each friday to sum up the results, but the stocks cannot actually be screened until some hours before opening on monday. I.e. you cannot profit on the difference between friday close and monday opening. On some of my screens, this is historically a fourth to a third of weekly gains, skewing the results wildly.

Anonymous said...

Does Zacks Ranking Work?

Well i tried to find out and used zack rank for about 18 month including the research wizard and real trading.
First I needed to fin out, that
Backtesting a specific period has given me a result xx,testing the same setup 3 month later has given me a different result and different stocks!.
Same parameters, same timeframe but
Different data and Different stocks????

Interesting enough to type some lines to support.

The answer was:
“Survivorship Database”.
which means for me..optimized.

Anyone same experience or any different?


Anonymous said...

Survivorship bias is a two-edged sword. The differences you encountered are likely to have been caused by companies that went out of business (and which, therefore, are likely to cause the backtesting results to be inflated) OR by companies that got taken over (which may well have resulted in backtesting results that are actually too low). Also, I doubt that dividends are included in the results (which causes backtesting results to be somewhat lower -- especially on long-held portfolios.) What you'll get is an indicator of which strategies would work best, not necessariy the results you would actually attain.

VectorVest offers a cheaper backtesting tool (the Simulator) for a one-time price that you might check out. The advantage is price and a user community. The disadvantage is that there are fewer fields by far and many of them are proprietary fields that aren't quite black box but certainly no better than translucent.

Anonymous said...

RW users - BEWARE!!!
The backtesting add-on has some SERIOUS PROBLEMS:

1) performance is overstated by the Win Ratio %: during test periods with no stock picks, RW counts that period as a Win. The staff are fully aware of the misrepresentation in the results. That's why they decided to make you sign the legal disclaimer after subscribers complained.

2) As someone in the forum mentioned earlier, backtests are based on Friday close prices which you cannot know until they release the data on Monday morning. I checked the results on a number of strategies and the difference in performance is very wide between getting in on Friday close and getting in on Monday open. It is my wish and probably that of all other users that they make backtests available for daily prices of open and close.

3) Because backtests and screens run on Zacks' central servers, they can see your great ideas. So don't expect privacy or secrecy of trading ideas when you use their product.

Anonymous said...


Anonymous said...

I could not justify the cost of Zack's Research Wizard for the sometime/some investor.

A year or so ago MSN had a 'research wizard,' easily accessed through their money page. It did everything I wanted it to. It no longer is in use--except in the UK, for UK stocks only.

Anonymous said...

i was tempted to buy the membership and here is what i found out from my research. You decide what you want to do.
Who else do a better job of picking a stock out of the screener? One of the insider gurus of the system- right ? Watch this video on youtube from Apr 28/2009 - this was when market was almost a month in to Bull run.

In that video Kevin Matras picked 5 stocks from the screener - HANS,IXYS,NTRI,SNWL,STRL. Look at where they were in Apr 2009 and where they are right now. 2 have doubled, i could not locate one, 2 have stayed the same. Now, if at max the screener could do in BIG bull run is to just double your money and you cannot beat that then go ahead and subscribe. I dont need a crappy screener like this.

Anonymous said...

RW is a clever idea and I hope it spawns more like it that are even better. Some people have made great points, which are the same conclusion I came to;
1. Recording performance on Friday and letting you buy/sell on Monday can skew the numbers significantly.
2. I am not 100% confident that the survivor bias is solved. Although, they say it is.
3. They don't offer any groups to exchange ideas or to talk about the RW. I have a feeling if they did many people would be complaining and the company would make the appropriate changes.

Anonymous said...

I'm glad I found this blog. I was put off by Zach's marketing -- no pricing info upfront and daily emails pestering me to join up. So far I haven't seen enough value but I'll keep an open mind for now.
BTW, that obnoxious marketing seems all too typical of any of these investment newsletters or services. Don't they realize the super-hype just raises suspicions?

Anonymous said...

To provide an update:

The Research Wizard databases no longer have survivor-bias. That problem has been fixed for a while now.

There is now a Research Wizard community to share ideas and issues.

This system isn’t that far than what professional investors use.

The Zacks Rank is solely an earnings estimate model and will remain so as long as I can tell. It’s designed to complement existing strategies or fully replace strategies that are inferior. Since the Zacks Rank has a single focus, it is possible to improve upon it by adding predictive, uncorrelated factors. Strategies not using Zacks Rank can also be built in their Research Wizard. Since the Zacks Rank is used by many as their earnings revisions model, I don’t think Zacks will change it to be a multifaceted, all encompassing model. I think that’s a good approach. You can build your own strategy that includes the Zacks Rank or not. It’s up to you.

Anonymous said...

I was an investor in Zacks hedge Fund suppposedly based upon buying the Number 1's and shorting the low rated stocks.

They made no money for me and even lost a bit. How can this be if they have this "wonderful" database. Note they show only annual returns. Thye have had some big drawdowns in between. Don't be a sucker for annual returns--do a draw down analysis on a monthly basis.

Anonymous said...

Many of the best Zacks screen results involve weekly rebalancing. A few of these portfolios have theoretical returns of about 80% a year. The returns are completely unachievable because of primarily the bid-ask spread that they do not account for. I know this for a fact because I have been doing actual investing based 100% upon their screens while comparing my results ongoing to the simultaneous theorertical results. I have actually been losing money while the model screens claim to be making money! Steer clear of these weekly screens as they are pure fiction.

Anonymous said...

Over the past few days Zacks has ramped up the amount of spam they send me, and I cannot find an "unsubscribe" option to stop it. I have tried their program in the past and just didn't feel confident about it. Reading these comments about survivorship bias and execution times make me even less confident. Their aggressive and hyped-up marketing is definitely off-putting. I do use, and have more confidence in, the competing Portfolio 123 service. I doubt Zacks will get any return business from me going forward.

Anonymous said...

One of the problems with the Zacks Screener is that if you want to use membership of the S&P500 as a screen, it tests against the current membership NOT the historical membership. Backtesting therefore has a huge positive bias as it only only includes those companies that are currently in the S&P. The results for 2007 only includes stocks that are currently members. This is a fatal flaw and when I raised the issue with them they admitted that it was a problem that have yet to fix.

Kurtis Hemmerling said...

I used RW. Nice interface but noticed the same problems that most report. Annoying when you screen, trade and then a future backtest doesn't show the stocks you were supposed to buy.

I switched to Portfolio123 and liked the product so much I asked the founder if I could help newer investors figure the platform out. Its a bit of a learning curve for sure but worth it if you want to put in the time.

Unknown said...

I am very disappointed in the results I have with Zack's Research Wizard. Any of the screens I've tried with weekly rebalancing have at best resulted in break-even, when the back test is showing 30% year-to-date profit. The adviser is very little help. I've given up asking for advice as it's 50 first dates every time I talk to him. He totally forgets what he told me in previous conversations and I've come to the conclusion I've wasted my money. Like many here, the overly aggressive marketing has really turned me off Zack's products. Hype over help.