some suggestions on your business model

**zqin** Fri Feb 18, 2005 3:27 pm

some suggestions on your business model
Hi Henry,

First of all, you are offering a great product. I've ordered the two classical books of Graham and look forward to some serious discussion on value investing method with you in the future.

For now, I have some suggestion for your business model. If you don't see a satisfactory subscription rate, it could be two reasons:

1. potential subscribers can find themselves hard to follow your portfolio because stocks in your portfolio are up a lot already and their margin becomes much smaller than yours

2. your trading frequency is very low. There is nothing to blame about it because it's the nature of the investment method. But trading only once or twice every month may make newbies feel even harder to follow and achieve a comparable portforlio in some forseeable time

One suggestion is that you can suggest other equally discount stocks that are not in your portfolio. Equally important is you must expect that people may keep pumping cash into their account. What are they going to do with the money? This is a problem for me. I want to hear your opinion.

**blast_investor** Fri Feb 18, 2005 4:31 pm

Thanks for praising BIRTP and thanks for your suggestion.

However, because there is rule of BIRTP that I will not want to change: BIRTP newsletter only recommend stocks that I personally want to invest.

Well, I do not want to invest into other mediocre stocks outside BIRTP model portfolio. Personally, I do not believe any newsletter author should recommend other stocks that he/she does not want to invest himself or herself. We like stocks with lots of insider buying, this is same too for mutual fund and investment newsletters. What is good for new picks if authors or managers themself do not believe in with their own money?

For (1), I would hope that all subscribers can judge BIRTP performance month by month performance, year to year performance, just like judging mutual fund performance. That performance will roughly equal to how much subscribers can make by passively following the Model Portfolio. Following BIRTP model portfolio passively should be pretty easy because there is not much frequency of trades to follow. Of course, subscribers may not like to follow BIRTP passively particuarly for existing picks and therefore they do not get similar performance of BIRTP, that I can not do much about it.

For (2) I am very much against some "common" practice in newsletter industry or mutual fund industry. BIRTP will not change into something similar to other mediocre newsletters. Diluting picks is not something I want to do. New picks do not mean higher performance.

That will make BIRTP very different from other newsletter or other mutual funds portfolios. However, I believe that is in best interest of all subscribers and me. Because in the end, it is how much performance of newsletter model portfolio and how much money I as newsletter author can help subscribers making, not how many picks per month.

Although I do not make big money with BIRTP business right now, that is OK and I am already making pretty big money with my own stock investment and it is fun to write articles as well. I do not have to make living right now on this BIRTP business. BIRTP business is for the long run as well and I believe more people will like it in the future because of its uniqueness and top-performing value investing service.

**blast_investor** Fri Feb 18, 2005 4:54 pm

For new money:

I have discussed before. Basically I do not provide personalized advice, therefore, I can not advise on person by person case.

In general, my opinion is already in FAQ "how to use BIRTP" :
http://www.blastinvest.com/faq_RT_Plus.htm#5

To invest new cash in 2 styles: passively or aggressively.

Passive: simple, just invest into every position of BIRTP model portfolio in dollar cost averaging fasion gradually. Passive style is especially good for those who are not very experienced in stock market or not experienced in value investing.

Aggressive: Then subscribers are on their own although Hot List can be used as guideline. See risk vs reward in Hot List, maybe consider to invest into most favorable stocks picks in Hot List first and rely on my opinion of Risk vs Reward in Hot List.

In general, I believe BIRTP is easier to use due to small number of picks and infrequent trades than other newsletters.