This article discusses
investor stock newsletter - investment newsletter.
In the investment field, people are attracted by confident, unequivocal
advice. People like gurus who are willing to go out on a limb with
unhedged recommendations. Problem: The market stories with romance, the
ones that fire the imagination, are usually long on promise and short on
earnings.
In the stock market, no one has a perfect formula. All
investment newsletters pick winners and losers. As Peter Lynch, the very
savvy chairman of the Magellan Fund, has said: ':If you are terrific in
this business, you are right 6 times out of 10."
Among the qualities that impress me in a newsletter are lucidity,
clarity and logic-and restraint. Watch out for words like incredible,
overwhelming, unbelievable and other hype adjectives. They have no place
in a useful, sensible market letter. There is no place where
understatement is more appropriate than in the emotional climate of the
stock market. I recommend that you ask for free samples of a newsletter
before you subscribe to it. Look for articulate restraint and logic as
well as a good track record.
Different focuses:
Some newsletters are short-term oriented and concentrate on market
timing for trading purposes. Others are more long-term oriented.
Although there are specialized newsletters that focus on commodities,
the credit markets or options, I think the basic difference among
newsletters is whether they are long term or short term.
Short-term oriented newsletters usually have a telephone hotline to
accompany the subscription. Instant access can be very important to
traders who may want to get flash signals for very short-term moves
rather than waiting until the publication reaches them. Fine short-term
newsletters are put out by Martin Zweig, Robert Nicholson, Stan
Weinstein and Heinz Petrol. All use hotlines and sometimes suggest very
short-term trades. However, although short-term trading may provide
challenge and excitement, it is far too tricky for most investors. The
vast majority of individual investors who really want to make money are
far better off with a long-term investment strategy. Reason: The odds of
making a profit are against the average investor to begin with, and
short-term trading requires discipline the average investor lacks.
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stock newsletter
for more information.
Some of my top choices:
I recommend Charles Almond's Growth Stock Outlook, which has compiled an
excellent track record. He looks for dynamic growth situations that are
reasonably priced, and he keeps them in his portfolio for a long time.
So does Al Frank, the publisher of The Prudent Speculator. He also looks
for value and stays with his holdings. Some other top newsletters are
Charles Allegis's Special Situation Report, Richard Russell's Dow Theory
Letters, Stephen Loeb's Investment Strategist, and The Chartist and
Market Logic.
For those who are more partial to technical analysis of stocks, good
choices might be Bob Murdock's The Astute Investor, Stan Weinstein's The
Professional Tape Reader, Martin Zweig's The Zweig Forecast and Robert
Preacher's Elliott Wave Theorist. They all recommend specific buys and
sells. They tell you at exactly what price to buy your stock and give
specific stop-loss prices.
To
Investor Stock Newsletter - Investment
Newsletter - Top
Selling tips:
One of the biggest mistakes the typical investor makes is to take a big
loss. Investors fall in love with stocks and tend to hang on to their
losers until small losses have become very big ones. The only way to
prevent a big loss is to put in a stop-loss order when you purchase the
stock. Ranges for a stop-loss will be different if you are a short-term
trader than if you are a long-term investor. Most long-term investors
would use a big gap, perhaps a 30%-40% loss from purchase price. For a
short-term trader, a 15%-20% loss would be more appropriate. Essential:
At some point you must draw the line, and a newsletter can provide a
stop-loss guideline.
The immediacy of a newsletter is not as important as its giving you
original ideas and a good overview. Contrary to popular belief,
speed in receiving financial information has nothing to do with the
performance of long-term investors. Some of the world's best money
managers live far from Wall Street. The media are always trying to find
a news story that makes sense out of daily market moves. But it is all
presumption and guesswork, and it can result in panic selling, even if
the long-term outlook for a stock is quite rosy. A disciplined investor
should not be swayed by the news on the electronic and daily media.
It's very important to discover contrary opinions in the stock market
because, in general, the investor who goes against the herd is most
likely to succeed.
How To Pick An Investment Newsletter
Investment letters aren't for everybody. If you don't know how to read
them, or if you believe everything you read, they can get you into
trouble. In 1985, about 65 % of newsletter model portfolios
underperformed the market.
Guideline: Decide first, without looking at a single letter, whether you
are a short-term or long-term, big-risk or little-risk, specific sector
or general market investor. Narrow the options by knowing your needs.
Then look up the letters that fit your profile. Request sample copies
(two or three consecutive issues for comparison) of a couple of the best
ranked ones.
Warning: Investment letters are ranked by past
performance, and that performance good or bad-can be in large part due
to sector or industry performance rather than quality of advice or
portfolio management. That's why track records alone can't tell you
much. To pick a good letter:
• Look for good, common economic sense.
• Other things being equal, opt for a consistent record rather than a
peaks-and-valleys one.
• Beware of letters that attempt to bolster predetermined opinions with
seemingly irrelevant facts. Example: A bullish letter may say "buy" and
give a plunge in interest rates as the reason. But when interest rates
start to climb back up, they may still be saying "buy" ... and this time
an upswing in the number of sunspots may be the reason they choose to
justify remaining bullish.
• Don't be fooled by "assured" statements.
Example: If a newsletter refers to "October slump" as if it were a
regular occurrence, check the October Dow averages for the last 30 years
(a half-hour job in any library) to see if there really is a regular
slump in October.
• Expect specific advice and detailed instructions on how to follow it.
Example: If it recommends an international stock, the letter should tell
you how to handle such a purchase yourself.
• Check for simple slip-ups, such as a recommendation to buy a new stock
when a letter's portfolio is already fully invested and no sell has been
suggested. The letter should deal with all aspects of constructing a
portfolio and handle its model just like a real one. Brokers vs.
letters:
To decide whether to use a money manager or a discount broker plus a
newsletter, use one criterion ... how much time and interest you have.
Some newsletters follow the market closely for you, providing new
information dail y (through a telephone hotline). If you have the time
and the interest to play the market that often, they can be great.
Others are monthly, general trend-gaugers that also include stock
picks-fine for people with less time to devote to their investments.
Remember: A newsletter's information can hurt you if you don't act on
its advice promptly.
Newsletters may seem expensive (prices range from under $ 5 0 to over $
400 for a year's subscription), but compared with hiring a money
manager, do-it-yourselfing can be a bargain.
Source: Consumer Information Center
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