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Four
Good Investing Sites
Although many investing sites have disappeared over
the years, there is still plenty of free information available on the
Web that will help you make better investing decisions. Here are four
worthwhile sites that I haven’t told you about before.
Best Investing Blog
By now, you’ve undoubtedly heard of blogs, which are like diaries, a
person's stream-of-consciousness musings posted on the Internet.
My favorite, and one of the most widely read
investment blogs is The Kirk Report (www.thekirkreport.com),
published by Charles Kirk.
Kirk, who has a law degree, but has never practiced
law, produces a daily report full of stock ideas, views about what’s
happening in the market and the overall economy, updates on various
market experts stock recommendations, and tips about other worthwhile
investing sites. It reminds me of the daily morning briefing U.S.
presidents get about local and international affairs from top advisors.
Information like this should be expensive, but Kirk gives it away.
Seeking Alpha
Alpha, in stock market lingo, translates to outperformance. For
instance, a high-alpha mutual fund is one that outperforms the overall
market. Thus SeekingAlpha’s (www.seekingalpha.com)
mission is to help investors improve their results. Although it calls
itself a blog, SeekingAlpha is more like a website that features dozens
of new articles daily from dozens of market experts.
SeekingAlpha distributes the experts’ commentary to
various sections of the site such as
China,
India,
Energy,
Media,
Retail and
more. So, if you’re interested in investing in Chinese stocks, you'll
find a treasure trove of profitable information in the China section.
I’ve also found SeekingAlpha’s conference call
transcripts to be a big timesaver. Most firms hold a conference call
for analysts after they release their quarterly earnings report.
Usually, management relates the quarter’s results and then opens the
call to questions from analysts. You can learn a lot about your stocks
by listening to these calls. Unfortunately, most calls run an hour or
longer, so listening to all of them may be impractical if you own many
stocks. SeekingAlpha provides free transcripts of many, but not all,
quarterly report conference calls.
Value Ideas
Value investors look for beaten down stocks likely to recover when they
solve the problems that caused most market players to abandon them.
If you’re in that camp, the hypothetical Value40
Portfolio created by University of Michigan’s Ross School of Business
might be a good source for stock ideas. According to Kai Petainen, who
maintains the Value40, as of April 30, the 40 stock portfolio had
returned 140 percent since its November 1, 2004 inception. The market,
at least as gauged by the S&P 500 Index, gained around 31 percent during
that same period.
U of M students taking portfolio management
classes, with the help of professors Richard Sloan, Tyler Shumway, and
others, developed a quantitative (computerized) formula for evaluating
stocks based on recent academic research about what works, and what
doesn’t, in terms of selecting winning stocks.
The formula is fairly complicated, involving
valuation, earnings quality, momentum, insider and institutional
trading, and other factors. For more details, check AlphaSeeker (www.alphaseeker.com),
which provides an overview of the factors used in the formula, plus
links to the reports describing the underlying academic research the
students used to define each factor.
Petainen, who manages the Ross School’s Tozzi
Finance Center, which is a stock research and analysis lab and simulated
stock trading floor, runs the screen once a month. The 40
highest-scoring stocks make up the Value40 portfolio.
You can see the list at Earnings Torpedo (www.earningstorpedo.com).
That page shows you the value portfolio’s returns since inception, plus
another portfolio, the Torpedo portfolio, which I’ll get to in a minute.
Click on the “40
stocks” link above the Value40 return chart to see the list of
stocks making up the current portfolio.
Each month, Petainen also compiles the 100 lowest
scoring stocks into a “Torpedo” portfolio. Since its February 1, 2001
inception, the Torpedo portfolio has dropped 45 percent, compared to a
25 percent or so gain for the S&P 500. You can see the 100 stock list by
clicking on the “100
stocks” link.
While some might be tempted to use the list as a
source of shorting candidates (short selling is a trading strategy that
produces profits when a stock drops and losses if it goes up instead),
in my view, its best use would be as a list of stocks to avoid.
Guru Picks
Do you want to invest in the same stocks as famous investors such as
Warren Buffett or George Soros? Guru Focus (www.gurufocus.com)
tracks the portfolio holdings and recent picks of those famous gurus
plus more than 40 other market-beating money managers.
There are a number of ways to use the site. If you
have a particular guru in mind, select that guru from the “List
of Gurus” to see a profile describing that money manager’s
background and stock picking strategies. From there, click on
Portfolio Holdings to see a list of the guru’s current holdings and
recent buys and sells.
Select the
Scoreboard to see the gurus ranked by their portfolio returns over
the past six months. The report also shows the guru’s 12-month return,
and five- and 10-year average annual returns. Click on any of those
column headings to sort the list with the top performers for the
selected period listed first. When I did that, I found that mutual fund
manager Robert Bruce, manager of the Bruce Fund, was the top-performing
guru over the past five years, averaging 31 percent annually. When I
viewed his portfolio buys and sells, I could see that Bruce was loading
up on energy and pharmaceutical stocks and dumping chemical companies.
These are some of my favorite sites. Although some
also have premium sections requiring a subscription, all of the
information that I’ve described is available free.
published 5/27/07 |
