WHY PEOPLE FAVOR PORTFOLIO123.COM OVER ZACKS?

Research
1

I have been using ZACKS for sometime and I found this forum accidentally. I saw some posters are complaining about ZACKS and they found out that portfolio123.com is superior to ZACKS but these posts are very old. I wonder if the same arguments still holds true.

Can someone clarify this?

2

Zacks has a spledid marketing machine and I too got sucked in a few years ago. If you want to backtest you need their backtester which will set you back about $1200 a year I believe. Their data do not show up in time (sometimes delayed for days). Their #1 Rank may not be bad but for the little guy to follow this is virtually impossible. By the time you get their information, the big boys have already loaded up and driven the stock price higher.

Their backtester is grossly inferior to the one here and gives you much less control. In all: You get a better deal here with a vastly better product.

Here is an earlier discussion you may be interested in:

http://www.portfolio123.com/mvnforum/viewthread?thread=2648#11525

3

Let me add other reasons:

  1. Zacks list memberships ( like SP-500) are NOT point-in-time. In other words, if you do a backtesting using this as a criteria, the backtester uses the stocks that are in SP500 TODAY, not at the time in the past.
  2. Zacks applies stock splits mercilessly, therefore you cannot use criteria such as Price <> X, since it uses a price that was not the one at the time in the past.
  3. Zacks database is totally made by survivors. This means that the further away you go in the past with the backtester, the less realistic the results are, since the backtester is ignoring stocks that were present at that time in the past, but are no longer in the database for any reason. ENRON is a good example, but there are many, many. Zacks freely admit this is the case.
    In my opinion, all the above problems make the Zacks backtester all but useless for serious use.
    Martin
4

  1. If I am holding the stocks only for 1 week, should I care about the survivorship bias?

  2. Did you guys compare the earnings estimates from portfolio123.com to the ones at other websites and if so, how fast and realiable is portfolio123.com?

  3. Koronbock you said

“By the time you get their information, the big boys have already loaded up and driven the stock price higher.”

Are you saying ZACKS is late in their earnings estimate info? Is portfolio123.com fast about this? Where do big boys get their info so fast so early?

5

Misterno asks: “If I am holding the stocks only for 1 week, should I care about the survivorship bias?”

No, you should not care.
But if you are doing 4-7 years backtesting, then, yes, the survivorship effect is lethal.

Martin

6

Mistero, you can use Zacks to run a strategy that you already know works. The strategy could hold stocks or 1 week, 1 month, 1 year, or 1 decade. If you know that the strategy works, then you can use Zacks database to use the strategy.

However, you should not use a survivorship database to test any new strategy. I would not even use a survivorship database to test a variation of an existing strategy, especially if the strategy picks risky stocks. A “Survivorship” database like Zacks will make risky strategies look safer than they really are and look more profitable than they really are.

However, survivorship would not affect the back test results for a “safe” strategy. How does one know if a strategy is safe or risky? By testing it on a non-survivorship database like the one Portfolio 123 has. In other words, I agree with those who say a survivorship database is useless for back testing.

7

Hello Misterno,

I’m not sure if arguments make any difference here, because we guys on this board cannot be objective about this… we are already sold too much on P123.

It depends a lot on whom you survey. You want to survey the Zacks community, too. Because, over here, we guys are already sold on P123. If you ask us, i.e. P123 members on this board, naturally you’re going to keep hearing that, yes, we’re sold on P123.

IMO, Zacks is not too bad. They have a decent back testing capability, which gives you pretty good advice on stock selection. And, what’s more, just like P123, Zacks keeps improving their service every day.

However, why should it matter why we prefer P123 to Zacks? The main thing is that we’re here at P123, and are pretty happy about it. Why put a survey before this P123 community?

Robert

8

Thanks for all the replies.

The reason I am here and comparing ZACKS to p123 is because all of you can not be wrong. There must be some common reason why you all choose p123 over ZACKS and I want to know what they are.

Soon, I will use p123 as a trial, and see how it goes. By the way I talked to ZACKS people and checked my backtesting files and saw no survivorship biases.

What I mean by survivorship biases is that in ZACKS database I encountered several stocks that used to exist but no longer exists and has N/A for their current data.

So this is telling me delisted stocks or ticker changed etc are properly adjusted in ZACKS. (Correct me if I am wrong on this please)

Thanks

9

I have no vested interest in P123 or Zacks, other than the fact that I use this product.

I was with Zacks for over a year. I started messing around with P123 on a trial basis just to make sure my systems looked similar in returns here as they did at Zacks. I left Zacks and will not return. The biases that others have mentioned make all the difference. EVEN FOR A ONE WEEK HOLD. Test any low price strategy at Zacks and you’ll have a sure winner. Test it here and you’ll be disappointed. That is because a lot of low priced stocks go double or triple and others go bankrupt. Zacks purges the losers.

Zacks is also way too expensive and charges by the year, unlike P123 which is by the month. You can go and go here as you see fit. Zacks is still trying to charge me for an account I closed 9 months ago!

Finally, if you do discover a data discrepency or have a data verification question, good luck getting it answered at Zacks. I had several of these that took weeks for the answer of “we don’t know”. Marco, Charles and others are the direct techincal contacts here. They know the database inside and out and respond ridiculously fast to questions. I have yet to not satisfactorily have even a complex question ansered here.

Maybe Zacks has gotten better, but I am not paying $1600/yr. to find out. This is my best unbiased review. I’ll save you the time and aggrevation. P123’s product and staff are much better.

10

I am pretty sure portfolio123.com is much better than ZACKS. Otherwise all these people would not argue this.

I have been very happy with ZACKS backtester and yet to see actual real life returns. I tested their data and everything seems normal to me.

My only problem is that ZACKS calculates its returns Friday close to Friday close. So I buy the stock on Monday morning (that is the earlies I can buy) hoping that the price is not much different than Friday close. but often times potentially good stocks rise so fast monday morning I have ti pay a higher price thus it lowers my returns. Same thing for Friday close. I cannot always wait till 4pm Friday so there is a potential loss there as well.

How do you guys manage this risk? Can anyone elaborate?

Thanks

11

Have you checked to see if this initial surge is temporary (due to a lot of other Zacks users acting at the same time)? For example, is the Monday morning surge still in effect later in the day or have stocks pulled back a bit by mid afternoon? In other words, at the close on Monday, are your new stocks in the black or in the red on average? If in the red, then you could do better by waiting until the initial Monday morning surge is over before buying.

Similarly, one might try to see if a Tues or Wed entry would give you a better price. This would take some work, but you could look over your past trades and see if buying later in the week would have given a better entry price.

What I like about P123 is the ability to pick my rebalance day. I tend to avoid Monday. P123 still sends me rebalance notices on Monday, but I just ignore them and do a manual rebalance later in the week.