Wallace Forbes, in and out of Forbes newsletters, and then in again.

In 1946, back from World War II, Malcolm Forbes launched his first newsletter venture for Forbes Publishing, The Forbes Investor, a weekly.

In 1954 he added the Special Situations Survey, a monthly focusing, each issue, on one stock that they regarded as a "special situation" that would do well during, say, the following 18 to 24 months.

In 1964, following the death of one of his brothers, Malcolm asked the youngest brother, Wallace F. Forbes, to join the firm. Wally had been a securities analyst in a Boston bank until that time.

Wally spent the next five to six years with the Forbes newsletters, leaving in 1970 about the time Forbes sold The Forbes Investor to United Business Services in Boston. (UBS was a major player in newsletters at that time and for many years afterwards.)

Wally returns to the fold

In 1996, after another quarter-century in the investment advisory business (and a few years after Malcolm's death), Wally Forbes returned to the fold to head the newsletter division.

In 2000 they launched a new title, Forbes Growth Investor, a monthly that includes a recommended "buy list" in every issue. It is aimed at the more short-term investor with an active portfolio. Each month the "list" includes four new stocks.

Another division at Forbes, Wally explained, produces what he calls "portal" newsletters (available only in online versions). They currently have more than 30 titles in that group produced in partnerships and not written by the Forbes people.

In still another area of the operation, Forbes publishes several titles in print versions. They include:

* The Gilder Technology Report, George Gilder, editor, 12x, $195/year, which includes a "weekly e-mail dispatch from the heart of Telecosm."

* The Prudent Speculator, John Buckingham, editor, 12x, $295/year, which includes three "e-mail hotlines" each week.

* The Forbes/Wolfe Nanotech Report, Josh Wolfe, editor, 12x, $195/year, which includes two free online reports available immediately with payment. (The online nameplate features a smiling face of Steve Forbes, Wally's nephew.)

For these titles Forbes handles marketing and publishing reponsibilites but, again, not editorial content.

Limits circulation

Meanwhile, back in Wally's area, in 2004 the Special Situations Survey celebrated its 50th anniversary. Interestingly, in common with Andrew Harper's Hideaway Report and a few other titles I'm aware of, Survey limits its circulation--in this case to 5,000. "We don't want the circulation to be large enough that our subscriber worries that our recommendations in themselves would move the market," Wally said.

The two current titles are produced in-house with a total staff of four, including Wally, whose business card describes him as "President, Forbes Investor Advisory Institute." Editor for both titles is Vahan Janjigian.

Bad timing, but when is good timing anymore?

"In hindsight," Wally Forbes commented, "we launched the Growth Investor at the worst possible time. Just at the end of the bubble when people were bailing out of the market in droves.

"In my opinion," he added, "and it isn't more than that, I think the market for investment newsletters has permanently shrunk in the aftermath of the bubble. I think a lot of people who might have wanted to manage their own portfolios are now relying on outside advice instead."

Marketing

Forbes continues to market both titles using direct mail. "We have relied on the magalog format and long copy for the past few years and I can say that it's gotten a hell of lot more expensive to do so," he said.

They do also get subscriptions from the Forbes website, www.Forbes.com, where, he conceded, "these titles are not easy to find." They weren't for me.

One aspect of the Forbes publishing strategy I found interesting was that both titles are sold at "introductory rates'--$149 for Forbes Growth Investor and $295 for the Special Situations Survey. However, the renewal offer for each is at the full price of $295 and $495, respectively.

Forbes admitted that the price jump does depress renewal response to some (apparently unknown) degree, but he believes that during the initial year they should have established the value of the publication to the extent that the subscriber will accept the higher price.

He may have a point. Suppose the first-time renewal rate is 40 percent. (Renewal rates for investment titles vary widely but tend to be much lower than business newsletters.) If they kept the renewal price at $149, it would have to go to a bit above 79 percent to bring in the same dollars. But you'd certainly expect Forbes Publishing would understand that.

At present both Forbes titles are available in both print and online versions (no price differential). "Having money to invest," Wally commented, "many of our readers are somewhat older and not ready to join the computer generation."

However, he foresees a day in the not-too-distant future when print versions of this type of newsletter are "no longer going to be to the advantage of both" publisher and subscriber.

Wallace Forbes, president, Forbes Investors Advisory Institute, Forbes Building, 60 Fifth Avenue, New York, NY 10011, 212-620-2210, fax [phone], www.forbes.com/newsletters