GorillaTrades Unmasked

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"We're just giving you the best ideas out there," he says. Focusing on performance results also ignores the value of the gorilla's daily market commentary, he says, as well as other tools and indicators that tell investors when to buy and sell stocks. "If our performance wasn't good, people would cancel and they wouldn't want the service," says Berman. Of subscribers, 70% renew each year, he says.

The site's founder says that part of its purpose is educational. "A lot of people don't know what they're doing," Berman says. "They really don't understand the concept of investing. We're trying to teach the concepts at the same time as the stock picks."

Amateurs Focus on Gains, Not Losses

But financial planners and investing experts say even if investors get lucky in their stock picks, they tend to lose out in other ways. Transaction costs like broker fees and bid-ask spreads cut into returns. Also, taxes eat into gains. The sale of stocks held for less than a year are typically taxed at higher rates than those held long-term.

GorillaTrades may benefit from the fact that many amateurs don't keep good track of their trading results. Investors tend to focus on, and remember, their gains while forgetting losses or refusing to sell their losing stocks. "They don't want to admit they made a mistake," says Stephen Horan, head of private wealth at the CFA Institute.

Finally, the $600 per year cost of GorillaTrades itself is a concern. Bonnie Reyes, president of BetterInvesting, a nonprofit for investors and investment clubs, advises keeping all trading expense at less than 1% of your portfolio. That's a portfolio of at least $60,000 for GorillaTrades investors, not including other trading costs.

"How Much Is Education Worth?"

Berman says that high taxes can be avoided by trading with individual retirement accounts (IRAs), and discount brokerages offer low fees. He says he tries to steer investors with portfolios under $25,000 away from the service. But he adds that many subscribers don't listen. "Again, how much is education worth?" he asks.

Despite these concerns, GorillaTrades subscribers contacted by BusinessWeek are enthusiastic. Dan Tubbs, a subscriber in Las Vegas, says he only uses the gorilla's picks occasionally, but loves the daily commentary on the markets. "That's the best part of the service," he says.

Tim Lelek, who works in information technology at a bank in west Texas, wishes he had the money to invest in more than two or three Gorilla picks at once. He can't get access to his IRA for trading and wishes he could. "I feel like if I was to take my retirement [account], I could make quite a bit more money," he says.

Helping People

Expect to hear a lot more from GorillaTrades in the coming months. The company says the launch of new TV ads with Davy Jones in September marks the start of a new, "multimillion-dollar" advertising campaign.

"It's fun to have something that was just an idea in your head explode into something huge," Berman says. "It's also good knowing you're helping people."

Subscribers may have fun learning about technical trading from the gorilla, but GorillaTrades' record suggests the people being helped financially by his picks are lucky—and rare. While GorillaTrades may generate the occasional savvy stock pick, the site's overall record suggests that a steady diet of bananas isn't healthy for investors.

Steverman is a reporter for BusinessWeek's Investing channel.