Newsletters form a unique and valuable subculture within the investment-advisory industry. Most of the rest of Wall Street is characterized by bureaucratic research departments where decision by committee is the norm. This makes innovation difficult, if not impossible. Investment newsletters, in contrast, can pursue any strategy they feel like immediately.
Innovation is particularly crucial in investing because the markets are quick to negate the advantages of strategies that started out beating the market. It’s rare for an investment approach to work for very long. Typically, a promising strategy works for a while—until everyone hears about it, jumps on the bandwagon, and it stops working. More often than not, as investors climb off that bandwagon, they find that an investment newsletter was there first.
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