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Favorite Web
Pundits
Although,
many sites now charge for access, there is still plenty of good
investing advice available free for the asking if you know where to
look. Here are some of my favorites.
Greenberg’s
Half-Empty Glass
I last mentioned
Herb Greenberg more than three years ago, only weeks before his columns
moved to subscription only availability on the Real Money section of
theStreet.com’s site. Now, I’m happy to tell you. Greenberg has
moved to CBS MarketWatch (cbs.marketwatch.com),
where his musings are again available to everyone.
Greenberg is
one of those “glass is half-empty” types. Most of his columns
feature stocks that he thinks are due for a fall, either because a
stock’s share price has outrun its fundamentals, or in Greenberg’s
view, management is overstating its past results and/or its future
business prospects.
Greenberg’s
writings are controversial to say the least. For starters, many of his
ideas come from hedge fund managers and other professional
short-sellers, who make money when a stock they’ve sold short drops in
price. So it’s not surprising when, on Internet message boards, irate
shareholders accuse him of being in-league with the short sellers after
he has disparaged one of their holdings. But Greenberg says that except
for his employer MarketWatch, he doesn’t own any stocks or hedge
funds, and he doesn’t sell stocks short.
It’s my
observation that although Greenberg is sometimes off base, he’s right
enough of the time that you should take consider his remarks and do
extra due diligence if he’s down on one of your stocks. You can access
Greenberg’s writings on the Commentary
page of the CBS MarketWatch site.
Erdman’s
World
Also, check out Paul Erdman’s articles while you’re in the Commentary
section. Erdman, probably best known for his best selling novels about
finance and politics, is also a respected international economist. His
Thursday columns give you his take on events here and abroad, from both
an economic and political point of view. While there are many
economist’s musings on the ‘Net, Erdman has a special knack for
putting events into understandable perspective.
For instance,
I’m sure you’ll find his April 9 column, “US is Losing Its Grip on
Iraq,” which outlines his chilling views about the consequences of the
war in Iraq, to be an eye-opener. Also, be sure to read his April 1
article, “India is the Next China.” It may change the way you think
about the outsourcing issue.
You’ll find
links
to these and other recent writings at the bottom of Erdman’s current
column.
Jubak
Offers Insight
Jim Jubak has been a
fixture on MSN
Money’s site for so long that I keep forgetting to mention him
here. Jubak is not a professional stock analyst; his background is in
journalism. Nevertheless, in my view, his insightful advice is top
notch.
Jubak’s
twice-weekly Jubak’s
Journals usually discuss a particular sector, semiconductor stocks,
or instance, or follow a theme, such as “10 Winning Stocks for a
Stuck-in-a-Rut Market.” Most include lists of specific stocks to buy
or to avoid.
Jubak’s
Journal’s are worth reading even if you don’t care about his stock
recommendations. He often spends more time describing the overall
factors affecting a particular industry than he does individual stocks.
His fundamentally-grounded analysis makes you think in broad terms
before you focus on specific stocks. For instance, in his April 2
column, “Five
Big-Picture Reasons to Snap up Energy Stocks,” Jubak makes a
convincing argument for considering oil stocks.
Find
Jubak’s columns from MSN Money’s homepage (moneycentral.msn.com)
by selecting Investing (top menu) and then Jubak’s
Journal under Insight.
Hedge Fund
Advice
Bankstocks.com is one of a kind.
It’s a free site that’s run by Tom Brown, who also manages Second
Curve Capital, which is a hedge fund. The site offers commentary and
analysis about financial services stocks. Bankstocks.com carries no
advertising and, since only well-heeled individuals are allowed to
invest in hedge funds, has nothing to sell to most investors.
Brown, a
former stock analyst, says he runs the site to share his stock
discoveries with others, and the site provides a vehicle for him to hear
from people working in the financial services industries. Whatever his
motivation; the site is worth a look if you’re interested in financial
stocks. It won’t take much time. Only about two or three research
reports written by Brown or other Second Curve analysts are posted to
the site each week. Some are opinionated and feisty articles about
specific financial stocks, while others reflect on industry issues. Use
the Archive link to see
the list of available reports.
Brown and his
associates also post Quick
Takes, which similar to the Archive reports, but shorter. The Quick
Take reports are posted on an irregular schedule, usually once or twice
a week. Bankstocks.com covers only a few stocks, but the insightful
reports pack a punch, and are worth reading if you’re interested in
the financial sector.
These
resources provide valuable information, but they are not the last word.
The more information you get about a stock, the better your decisions.
5/2/04
More
Good Advice
from
earlier columns
John Dorfman
Money manager John Dorfman writes
a twice-weekly column for Bloomberg’s financial site (www.bloomberg.com).
Dorfman is a classic value investor, and thus shuns stocks he sees as
over hyped or overvalued. Dorfman’s columns usually include the names
of specific stocks that he’s recommending buying, or in some cases
shorting. In case you’re not familiar with the term, shorting is a
strategy involving selling stocks that you don’t own, in hopes that
you can buy them back at a lower price in the future. So you would short
stocks that you think will go down in price. One reason that I’m a big
fan of Dorfman is that he periodically recounts the performance of his
previous picks, and he’s racked up far more winners than losers over
the years.
For instance,
Dorfman introduced his low-debt stock portfolio late in October 1999.
His original five picks have gone up about 56 percent, since October
1999, compared to a 17 percent loss in the S&P 500 in the same
period. Dorfman picked four more low-debt stocks in May 2000. Those four
have soared 87 percent on average, in the intervening two years. Dorfman’s
May 2001 picks are up 19 percent on average. Dorfman came up with four
new picks last month. Find Dorfman’s articles by selecting Columns
(Markets section) on Bloomberg’s homepage, and then click on Dorfman’s
name. Select “Low-Debt Stocks Try to Continue Winning Streak”
from the list to read about his latest low-debt picks.
Another
reason I like Dorfman is that he frequently comes up with stock
selection schemes that not only consistently turn up winners, but you
can screen for new candidates on your own.
For instance,
his Robot stock portfolios scored 40 percent, 68 percent, and 24 percent
gains in calendar years 1999, 2000, and 2001 respectively. By
comparison, the market, at least as measured by the S&P 500 index,
turned in 20 percent, minus 9 percent, and minus 12 percent returns,
respectively, in the same years.
Dorfman’s
Robot selection criteria are surprisingly simple. He creates a list of
stocks with market capitalizations exceeding $500 million, and total
debt/equity ratios no higher than 1.0. From that list, he buys the 10
stocks with the lowest price/earnings ratios, and holds them for 12
months. If you’re proficient at screening, you can create your own
list of Robot stocks using any search program that provides a total
debt/equity ratio parameter.
MSN Strategy Lab
MSN MoneyCentral’s Strategy
Lab is a good resource for spotting good stockpickers. Every six
months MoneyCentral gives six market experts a hypothetical $100,000 to
invest. They can make as many trades as they want during the period.
They can buy stocks, sell short, or keep or keep their funds in cash.
The experts describe their overall strategy at the beginning and then
their rationale for each trade. MoneyCentral tracks their trades and
current holdings. Reading each expert’s strategy description and their
trade rationales is an education in itself.
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