Investment Advice

Arne Alsin a writer for thestreet.com recently published an article about how Overstock.com (OSTK) is a great stock and should be worth $92 a share. This is his second article:

http://www.thestreet.com/_tscs/markets/activetraderupdate/10274634.html

There should be a third to come this week. His first is somewhere else on the site you need to search for it. But the point is this, OSTK I must say may not be the most financially healthy company (to say the least). Here is chart of the last years performance of OSTK:

http://finance.yahoo.com/q/ta?s=OSTK

Not bad, 45 to 28, if you were short. But lets get back to Arne here. So at the bottom of his article there is this disclosure:

At time of publication, Alsin and/or ACM was long OSTK, although holdings can change at any time.
Arne Alsin is the founder and principal of Alsin Capital Management, an Oregon-based investment advisor, and portfolio manager of The Turnaround Fund, a no-load mutual fund.

So I decided to check out The Turnaround Fund to see what Arne is all about. Hey I can't be too quick to judge purely based on a call to buy OSTK. So looking into his fund revealed this:

http://quicktake.morningstar.com/Fund/snapshot.asp?Country=USA&Symbol=TURNX

Apparently Arne has managed quite the fund, he actually ranks last in his category in terms of performance this year. Last year he was in the bottom 1%, and the year before the bottom 8%. His last quarter of positive returns was in Q4 2004. Furthermore I found this to be interesting:

Glenn D. Surowiec is the Fund's co-portfolio manager. Mr. Surowiec serves as a senior analyst and trader for the Adviser and has served in that capacity since 2001. Prior to joining the Adviser, he was a derivatives structuring manager for Enron Corp. from 1998 to 2001...

Yep that's right his co-portfolio manager used to work for Enron during their primetime of operation. Now I am not here to judge him or imply that he had anything to do with anything that happened there, I just thought it was interesting to point out.

So what is my point of this? Essentially, be careful who you take advice from, sometimes just because they seem like a professional doesn't mean that they have advice that will make you money. It is important to consider the source when it comes to your own money. I wish Arne all the best in hyping his book, I just hope he took some quick profits and isn't going to hold it till it hits $92 because I think he could be pushing his luck hoping for that.