Nates Notes is one of the highest ranked newsletters reviewed by the Stock Newsletter Cub.

Overview

Founded in 1995 by Nate Pile, Nate’s Notes focuses on stocks in the tech and biotech sectors. Over the years the newsletter has evolved to the point where he includes select ETS’s in its model portfolio.

Pile relies on fundamental analysis to find stocks that he perceives to be undervalued. Similar to Warren Buffett, Nate seeks stocks that he would be happy to own even if the stock market never existed. However, instead of looking for companies with established products that have a monopoly in the market, he searches for smaller companies that have a game-changing product with tremendous growth potential ahead.

Nate provides subscribers with a thorough analysis and updates for each of his stock recommendations along with specific buy prices.

Composition

The newsletter is broken up into two model portfolios, the original Model Portfolio, and the Aggressive Portfolio. The Aggressive portfolio was designed for investors with a much higher risk tolerance for risk. I urge potential subscribers to use caution prior to following the Aggressive Portfolio as it relies on margin to leverage returns.

Nates Notes holds about 20 stocks on average each month in its model portfolios. The average holding period is near two years which helps reduce taxes on capital gains.

Positives

  • An established long-term record. Unlike some popular newsletters whose results have deteriorated over time, this stock newsletter has outperformed the Wilshire 5000 by a large margin over the past five and ten years.
  • One of the main complaints of stock newsletter subscribers is that a newsletter will provide a list of 30-50 stocks to buy often does not include a buy or sell price. Nate solves this by providing buy and sell prices for each position, along with how many shares will be traded for each holding in his newsletter portfolio. More importantly, in the following month’s issue, Nate will provide a recap showing his exact buys and sells.
  • While I view this as a positive, others may disagree with one. Like a real money manager, Nate will hold cash when he feels the market is overvalued. This feature can help investors from chasing high prices. During these times he has also included non-stock ETF’s such as QID and GLD to hedge the market.
  • Keeping track of all stocks is impossible. One of the biggest values Nate offers subscribers is the insight into under the radar small and mid-cap stocks that most investors aren’t familiar with. Most often the most significant gains for a stock occur before it becomes a household name.

Negatives

  • Even Nate is not immune to losses during market downturns. The newsletter suffered over a 60% loss in the 2008-2009 bear market with the aggressive portfolio lagging the market badly. I believe this has led him to become more cautious with his investments during extreme market optimism.  He mentions this as a reason he started to raise cash in his overall portfolio in the last quarter of 2018.
  • Overall performance is helped by two stock recommendations – CELG and AAPL (which he recommended when it was less than $1 a share). This is similar to Motley Fool Stock Advisor who garnered most of their market-beating performance thanks to multiple purchases throughout the years of a handful of stocks.
  • The aggressive portfolio has suffered massive losses as of late and faced a margin call in 2018.  While the portfolio (and key stock) may turn out to be a big winner, we caution investors in following the aggressive portfolio due to its significant price swings and use of excessive leverage.

Conclusion

If you’re interested in subscribing to a stock newsletter, Nate’s Notes is a solid choice and is ranked as a top pick of the Stock Newsletter Club. Before becoming a subscriber to Nate’s Notes I would suggest downloading a sample newsletter from his website along with perusing some of his blog posts. This will give you a good general idea if his stock market advice is a good fit for your personality.