Kick The Tires

Before you buy another car you walk around the lot, kick the tires, slam the doors and look at the mileage indicator. That's an odometer. I know. That is about all the "research" you can do other than what the car salesman tells you and I hope you know better than to believe him.

The same goes for buying stocks or mutual funds. All the brokerage companies tell you to do your research before you buy. Kick the tires. Slam the doors. Look at the odometer. But how do you do this and can you really get the true story about any equity because you can't take it for a test drive and you don't want to believe any broker. Wall Street wants you to read the prospectus, study the annual report, find out about management, learn the P/E ratios, see that their sales and earnings are increasing and on and on and on gathering statistics until your head hurts.

OK, now you have all that information, but what do you have?

The Annual Report. The title ought to give you a clue. Much of the information in it is already a year old and much older depending upon when you are looking at it.

The Prospectus. Did you know that this complex document was not written for you, the investor? It was written for some Dilbert in his cubicle at the Securities and Exchange Commission in Washington who studies it to be sure it meets all the regulations for full disclosure, whatever that is. If you read the prospectuses for any stock or mutual fund that is a real winner and another where you will lose all your money you will find they are both almost identical. It is a waste of time to read these. They belong in the bottom of a birdcage.

Company management. Do you think they are going to tell you anything bad? Come on.

Shall we keep on going or are you getting the idea? What you are gathering is information that everyone else can access, some of which can be distorted and will not tell you the most important thing of all. Will the stock or mutual fund go up if I buy it? Your broker has all this information so don't ask him as he will regurgitate this mess and make it sound important. In other words he doesn't know either.

When it comes to buying stocks and mutual funds you cannot do any worthwhile research the way Wall Street tells you. When your stock goes down and you lose money they can look you in the eye and say you did your research and it is not our fault you lost money. It is their way to keep from being sued for bad advice.

Kicking tires the way the big boys tell you doesn't work. In a later column I will go into how to find equities that do go up and you won't need any of that Wall Street disinformation to find winners.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

---

A Stock Market Investment Plan that Never Lets You Down

The bulls and bears of the stock market are both... Read More

Investing in the Stock Market - When To!

Is really not as important as to how you invest... Read More

Trading Tips No 8: Picking the Best Stock Market Price

Carefully thinking through your goal as a trader is of... Read More

What Does it Take to be a Stock Trader?

It takes a total mental commitment to the task. It... Read More

Cash Is A Position

I go to the Money Show every year to visit... Read More

Successful Trading ? Taking Profits - Part 1

So you're started trading, you bought some positions with your... Read More

Is Active Trading The Answer?

One of the main reasons many of us get into... Read More

Choosing A Fund

For years I have been saying you must have a... Read More

Option Spread Trading

Spread trading is a technique that can be used to... Read More

Basics of Stock Market

Financial markets provide their participants with the most favorable conditions... Read More

The Value of Stocks of a Company

The debate rages all over Eastern and Central Europe, in... Read More

Is the Stock Market for You?

Many people would like to diversify their portfolios to expand... Read More

A Good Fund Manager

Every Wall Street analyst, financial planner and broker will tell... Read More

Trading vs Investing

I often hear from people, "I don't trade. I invest.... Read More

How to Pick Winning Stocks

There is nothing more exciting than finding an undervalued stock... Read More

A Funny Thing Happened on the Way to the Stock Market

On the 40 year journey through the turmoil of a... Read More

Size Counts!

What the heck am I talking about?It is often said... Read More

How to Maximize Your 401k Mutual Fund Returns

When it comes to 401k's there is an overabundance of... Read More

Oil Stocks CHK WLL - What Is Their Worth?

(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More

Rebalance And Diversify

The stock market has not been very kind to your... Read More

Inertia

One of the basic laws of physics is that a... Read More

How Eating Bitumen Made Me a Better Trader

Trading is a fascinating activity.There are so many layers to... Read More

Investing in Stocks and The Game of Monopoly

To begin, you might look at playing the stock market... Read More

Wal-Mart: Discount Store, Discounted Stock?

As GuruFocus updates the stock buys and sells of gurus,... Read More

Will the Stock Market be Lower in October?

The stock market often closes a week in the middle... Read More

Inverted Interest Rates

Inverted interest rates? What's that? Who cares? Even if you... Read More

Economists

In today's volatile and confusing stock markets everyone is searching... Read More

Smart Day Trading Strategies to Help You Make Money in the Stock Market

Stock trading can be a very profitable activity. You can... Read More

Momentum

One of the basic laws of physics states that a... Read More

My Stock - Right or Wrong

We all know the expression, "My country, right or wrong",... Read More

Moving Averages

Every day on CNBC-TV they show a 200-day moving average... Read More

How To Make, And Keep, Money Trading Stocks

If you are serious about making and keeping money by... Read More

Mousetrap

The spring-loaded rat catcher is the ultimate low-tech device invented... Read More