We are dedicated to sharing our investment experience, with our readers. Some of the following questions and answers will help you to understand us better. If you have further questions or comments, please contact us.

How often is Contra the Heard published?
Contra is published quarterly in mid-January, mid-April, mid-July and mid-October. The January issue is 20 pages; the rest are 16. Subscribers also receive our email bulletins — we issue between 15 and 25 in a typical year. Most of these are sent out when we buy or sell a stock. To those who do not have email access, we send faxes.

Can you invest some money for me?
No. At Contra the Heard we do not invest for anyone but ourselves.

How much money do I need to get started?
You should have enough to set up a diversified portfolio from the outset.

I only have enough money for a few stocks. Which firms should I buy?
Whether you choose to buy the stocks listed as Buys in Contra, or others, is your decision. We simply discuss which ones we have bought and why. We also report when we sell stocks and the rationale behind each decision. We always suggest that readers analyze whether our stock purchases make sense, both from a stock purchase viewpoint and specifically to their own portfolios before they buy. WE DO MAKE MISTAKES, and unfortunately, we always will.

How do readers know when you buy or sell a stock?
Whenever we buy or sell a stock, an email/fax release is sent out before markets open the next day, unless technology gets in the way. We also send out a release when there is a takeover on a Contra stock and explain what we are planning to do.

Should I buy the stocks on your Hold list?
On the centrespread of each issue of Contra, we show every stock that is in the portfolio along with the year acquired, the purchase price and our target price for the initial sell. These stocks are divided into two categories: Buys and Holds. Buys are stocks we are still willing to purchase today. Holds are those stocks with which we are sitting tight and hoping they will appreciate in value.

What is the "Purchase Weighting" you refer to in email releases after you purchase a stock?
For an answer to this, see our April 2002 commentary.

Why do so many of your stocks get taken over?
For the past 14 years, a suitor has chased at least one holding in the Contra portfolio. Since our portfolio normally ranges from 15 to 25 stocks, we are quite proud of this record. The takeovers in reality are a confirmation of our investing style: buying out-of-favour companies which later return to popularity.

Should I use a discount broker?
If you are not receiving the advice from the broker, why pay for her/his services? Discount brokers save you oodles of cash, which ultimately increases your financial return.

Do you use stop loss orders?
Never. We consider this a losers' game. We cannot count the number of times our stock selections have swooned downwards and we would have been sold out of our position. It is better to make a decision on when to sell stocks, rather than let the market dictate the transaction. Similarly, we do not use "at the market" orders, preferring to keep closer control over how much our stocks cost and what we get paid for them.

How come you only take 1,000 subscribers?
We charge a premium price for our service, so we limit the number of subscribers. Plus, because of the premium price, and the fact that we enjoy what we do, we do our best to answer queries sent our way. If we had 100,000 subscribers, Contra would lose the personal touch.

How come you changed your policy regarding buying stocks on the Nasdaq, American and OTC exchanges?
Though the vast majority of the portfolio will continue to be comprised of TSX and NYSE stocks, the other exchanges have improved in recent years in terms of regulation and liquidity. The other major factor is that the NYSE is frequently giving the boot to troubled firms — some of which have a good chance to recover. For a full explanation, see our April 2000 commentary.

Can you email me my issue of Contra the Heard?
Nope. We only email our updates. An issue of Contra just isn't the same by email. Certainly, in some respects, it would be in our best interests to email Contra, as this would lower our costs.

How long do your selections stay as Buys?
That depends. If the price has moved up to the point where it no longer seems like a good purchase, we remove it from the list. Also, if the corporate fundamentals have deteriorated, it is often switched to a Hold.

How come your letter is so #$%&*! expensive?
Our financial returns are amongst the best out there. This is not over a one- or two-year period, but over an extended length of time. That we feel justifies the higher price.

Is there somewhere to find out more about your methodology?
One place to look is Benj's book, The Contrarian Investor's 13: How to Earn Superior Returns in the Stock Market. Heck, once you read that, you might not even want to deal directly with us.

Do you take credit cards?
Nope. We've considered it and decided not to do it.

Do the email/fax releases you send tend to have an impact on stock prices?
They can, especially where more thinly traded stocks are concerned. Since 10 to 15 percent of our clients are brokers and other investment professionals, they often recommend our selections to their customers.

How come you guys don't seem to like mutual funds much?
We strongly believe that investors have alternatives to mutual funds that have the potential of generating superior returns. Mutual funds do have their advantages, but there are also several inherent disadvantages which explain why about 90 percent of funds fail to even keep up with the overall market. And why they lag our returns substantially.