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

---

Alfred E. Newman

What! Me worry?Many of you remember the cover of MAD... Read More

The Bottom?

Every day I hear someone on CNBC proclaim that "this... Read More

Losses, not Profits, will Stop You from Trading in the Market

Should the market turn against you, it is important that... Read More

Direction

It is difficult to make money in a bull market,... Read More

How to Short Stocks? How to Make Money when Your Stocks Go Down by Shorting

The stock market can present you with a lot of... Read More

Big Buildings Can Mean Big Economic Disaster

AS BUILDERS BEGIN WORK ON THE FREEDOM TOWER in New... Read More

Its Snowing

The Winter Games for the Olympics are coming up soon... Read More

The I Word is Coming to a Town Near You

Hello Inflation, it has been awhile, I see you on... Read More

The Golden Goose is Sick

It is finally catching up with them. The brokerage companies... Read More

High Price/Earnings Ratios and the Stock Market: a Personal Odyssey

After some forty years of banking and investments, I retired... Read More

Trading For A Living - Part 1

There can't be many traders who haven't at least considered... Read More

Prospering with Mutual Funds: How Anyone can ?Afford? an Investment Advisor

Recently I was invited to appear on a live CNNfn... Read More

Your Trading Objective: Why is that so Important?

You've decided to try your luck at trading stocks or... Read More

Dont Spend Another Dollar on Business Opportunities Until You Read This

With an insecure job market, overworked employees, insufficient retirement savings... Read More

Inertia Syndrome

When it comes to buying a stock or mutual fund... Read More

Trading Tips No 6: The High Cost of Low Cost Stock Market Information

It has been said that low cost or even free... Read More

Jack and Jill

Jack and Jill went up the hill to fetch a... Read More

Dont Lose All Your Money

That sounds like good advice doesn't it? Don't lose all... Read More

Political Investing

We have two candidates for president that have really different... Read More

Discipline

One of the great "secrets" of successful people is discipline... Read More

Buy and Hold Investment Strategy

"Buy and hold" is one of the most heralded investment... Read More

Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market

This is an extract of an article which was first... Read More

Value Investing: Selecting From The Bargain Bin

Picking a beaten-down stock requires a different kind of selection... Read More

The Secret Art of Backtesting

If you have not back tested your trading system, you... Read More

VooDoo Training For the Stock Market

If you go to Haiti or other places in the... Read More

Structured Settlement; Lawyers in NY and Mutual Funds

Minority Report the movie may not be far off if... Read More

Different Ways of Buying Stocks

Let's say you are interested in this one company. You... Read More

9 Deadly Trading Mistakes!

The following are a list of nine things you want... Read More

Mutual Fund Expense Lies

When purchasing mutual funds we are cautioned to read the... Read More

An Old Proverb for Investing

"If you don't know where you are going, any road... Read More

Analysts - Do They Really Know The Stock Market?

When you become interested in a stock or mutual fund... Read More

Understanding Stock Market Indexes

A stock market index is a statistical measure of changes... Read More

Expense Ratios

Mutual funds and brokers are always preaching not to buy... Read More