How to research stocks like a pro

Black Enterprise, August, 1996 by Juliette Fairley, Tariq K. Muhammad

Stock Research Group (www.stock-group.com/

NetWorth (www.networth.galt.com)

Market Edge (www.marketedge.com)

Quote.Com (www.quote.com)

Silicon investor (www.techstocks.com)

Investing on the Net (www.hometown.on.ca/bcn/interests/business/ investing.btml)

Money, Investing, Economics (k2nesoft.com/money. btml)

Financial Market (www.a2z.com/iol/)

Pointcast Network (www.pointcast.com)

Investment newsletters--which are in no short supply--are another good source of investment advice and information on prospective companies. According to The Hulbert Guide to Financial Newsletters, (Dearborn Financial Publishing Inc.; $27.95), there are over 500 such newsletters. They are produced mostly by individuals who have registered as advisors with the SEC, though not all are. Nor are all investment newsletters registered with the SEC.

Since there are no requirements for becoming a registered advisor, government regulation is an erroneous barometer for choosing an advisory newsletter. The challenge is to distinguish the newsletters published by crackpot advisors from legitimate sources of information. The Hulbert Guide to Financial Newsletters is a good place to start. It tracks the performance of over 100 advisory newsletters over time. This information is expressed in a gain/loss format, including data on subscription rates and the availability of telephone updates.

Most have trial subscription offers so that you can test the merit of the information offered before you subscribe. According to Mark Hulbert, author of The Hulbert Guide to Financial Newsletters, the best way to maximize your potential for reliable advice, and profit, is to subscribe to a number of dependable newsletters "Combine their information," he suggests, "to chart a personalized investment strategy or method of acquiring helpful company or market information."

FINDING INFORMATION

A boon in electronic trading has increased the availability of crucial company information on the Internet. More potential investors are tuning out their brokers, and fine-tuning in their own instincts and market knowledge with all these information resources. "It doesn't take a genius to invest wisely," says Alexander Norman, a financial advisor at Americorp Securities. "It just takes the time and effort to research companies and markets."

Indeed, the number of online traders has increased steadily in the past few years. According to Forrester Research in Cambridge, Massachusetts, there will be about 800,000 online brokerage accounts by the end of 1996, which is only a fraction of the estimated 80 million traditional accounts. Still, the demand for reliable independent investment research is increasing.

Many of the commercial online services have caught hold of this trend; they offer an array of research and investment tools to aid the online investor. For instance, America Online has recently revamped its research area. It now includes equity information, earnings estimates, historical pricing charts and graphs, company financial statements, current stock quotes (though delayed at least 15 minutes) and company news.