Here are a couple of recent comments about Zacks's Research Wizard that are in response to my post a few weeks ago.
I'm guessing this is the same "Anonymous" who offered to post his return on a weekly basis:
During the past six weeks, one of my better strategies in RW selecting 8 stocks per week ran -9.5%, Fridays to Fridays, -14.5% of which was during the past three weeks. YTD, during the past 44 weeks the result was 137%, Fridays to Fridays, including staying in the market during the four volatile weeks in February, when I stayed out, triggered by the 4.5% drop in the DOW. As stated earlier, when you invest rigorously from Mondays' closes to Mondays' closes, your result ends up at about 75%-80% of the result RW shows you would have gotten. This result excludes the transaction cost of the 8 stocks in the portfolio, about half of them stay two weeks or longer in the portfolio.
It is relatively straightforward to test with RW under which market conditions the Zacks rank 1 and 2 stocks produce ineffective results. Jeremy Grantham's latest quarterly October newsletter spelled it out: "As we have demonstrated to our clients in earlier cycles, earnings estimates in particular merely follow the market up (not the other way around, as one would hope). So it is a law of nature that strong estimates will abound after a major market rally. The earnings and economic growth estimates in such cases are usually throwaways". Hence, when the market runs down in high volatility, I don't use RW to pick my stocks. During such a time, the earnings and growth estimates are usually throwaways as Grantham states. I estimate that to be about 30% of the past ten years. The onset of these periods do usually precurse themselves by a growing VIX and/or the first time that the DOW drops 4.5% or more in one day. For the rest, I find RW a money machine if you have the proper strategies and always buy and sell at Monday closes.
CWatts also chimed in with his own opinions about Research Wizard:
Scott, I totally agree: "There is a real lack of support for such an expensive product. I think it would really help to have a user forum available. Any sort of communication on a weekly basis would be great." What's with that? It makes no sense. I got into the Motley Fool Pro as a charter member and found the support was great. I wasn't so impressed with the profits their recommendations were providing. Still, I felt that support, encouragement and information was abundant from the Pro community and Fool staff. Zacks seems to say, "We've got your money. Now you're on your own." It is almost as though they are assuming they will have no return customers because they are doing nothing to foster loyalty. A community of Zacks Wizard users is really needed. If Zacks has no interest in fostering it, how can it be done?
I've had good weeks and bad weeks using the Zacks Wizard. But in the Last six weeks I've gotten creamed in excess of $50,000. Part of the problem is my own. After a couple bad weeks I decided to sit on the sidelines in cash for a little while, just in time to miss the biggest gain in months. I was up nearly thirty percent for '09 when I started using Zacks. I'm closer to 10% now. That hurts. But I can endure losses if I have solid assurance that the swcreens are accurate and you can make serious money if you are faithful to the program. But it seems to be hard to find anyone who has continued using the Wizard faithfully for several years. Do any of you know of independent careful critiques of the Wizard? I want to believe but I don't want to wipe out in the process.
It looked like we were going to get a powerful trend day after the "gap and go" this morning. I stopped out of a trend day trade in the late morning hours as price consolidated and then dropped through the support of the 20 EMA and the lower Bollinger Band. Losing comes with the territory (but it always sucks).
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