June 8, 1998Investors Mining for Research Hit a Motherlode on the Web
By DANIALLE WEAVER
Special to THE WALL STREET JOURNAL INTERACTIVE EDITION
Tom Worley is a novice to on-line trading, but he's already an expert at using
the Internet for stock picking.
Even before the 50-year-old Miami securities operations specialist moved to
on-line trading with Charles Schwab in mid-May, he was already spending
four or more hours on the Internet every day, conducting company research
on-line and participating in an invitation-only e-mail stock discussion list
devoted to the investing style of William O'Neil, founder of Investor's
Business Daily.
Investors such as Mr. Worley are increasingly turning to the Internet as a
convenient tool for gathering the advice, information, or research they need to
make informed investment choices, no matter what their experience level or
investing needs.
A recent study by Jupiter Communications, an on-line consulting company
based in New York, found 44% of on-line traders are "highly likely" to do
their financial planning and investment research on-line.
Much of Mr. Worley's on-line time is spent answering e-mail generated by the
discussion group or using another O'Neil site, Daily Graphs Online, a
subscription site that allows him to compare a company's earnings and price
performance with the market.
He also frequents Big Charts, a free site with charts and technical analysis;
Infobeat, a free news clipping service; the Yahoo! site for global stock quotes,
DBC Online, for real-time data; and Stock Smart, which offers free and
subscription on-line tools, news and information.
Unlike other investors who are hungry for investing information, however, he
does not read message boards, visit stock chat rooms or subscribe to Internet
stock newsgroups. "I do my own homework, so forums, chat rooms and the
like are all just noise to me," Mr. Worley says.
In some instances, investors who are going
on-line for this information don't trade on-line.
For example, Shery Mexic, a 40-year-old
executive assistant in Houston, places all her
trades through Salomon Smith Barney, which
does not offer on-line trading. She has a
full-service broker because she values her
broker's insight and financial advice, as well as
the convenience of having information about
various financial products, such as the new
Roth individual retirement account, at her
fingertips.
Nonetheless, Ms. Mexic spends about four
hours a week on-line, looking for research on
stocks and information on investment
techniques. She frequents a number of financial
Web sites, including the Yahoo! site, Edgar
Online, The Motley Fool and Invest-o-rama.
While she generally eschews most stock
bulletin-board services, she does subscribe to
one Usenet newsgroup, misc.invest.stocks.
"My most-appreciated investments have been
those acquired as a result of my gleaning
information on the Internet," Ms. Mexic says.
"Even in the junk-filled arena of
misc.invest.stocks, which contains far too many
spam posts and posts by the totally uninformed,
I'm steered to bits and pieces of very useful
information. The sum total of these bits and
pieces provides adequate fodder for my investment decisions."
She is not alone. "I use bulletin boards and listservs because it is fun to interact
with fellow traders, and I have gotten some good suggestions," says David
Squires, a 27-year-old student in Marietta, Ga., who has separate trading
accounts with three on-line brokers to make sure his trade goes through, no
matter how wildly the market may be swinging.
Mr. Squires frequents the Silicon Investor stock discussion boards and visits a
very long list of on-line sites to supplement the information he finds there,
including the various Yahoo! sites, CBS Market Watch and the Daily Stocks
site.
In fact, a recent survey of new subscribers to the Napeague Letter, an on-line
newsletter providing advice for investors in undervalued small cap stocks,
shows those with fewer than five years' experience tend to find his site by
following hyperlinks from other financial sites or through the results of search
engines, rather than discussion fora, says editor Bob Davis. He adds about 21%
pick stocks because their friends or on-line buddies recommended them. Only
15% pay a broker for research reports, he says.
Ironically, most on-line traders ignore the investing information on their
broker's site, says Pejman Hamidi, former trading manager at Polar Trading
in Mount Clemens, Mich., and current editor of the Polar Analytic Services
(PAS) Newsletter, a daily e-mail newsletter geared toward short-term traders.
"The trick in this industry is, what can I do to make my home site informative
enough so I don't lose my customers to someone else?" he explains. "That's
impossible to do, because for some reason -- I haven't figured out why yet --
there is this mental block customers have about getting information from their
broker. I mean, you never trust your broker, right? You're going to go
somewhere else for that information."
Many investors complain they're unable to find everything they need on one
site. "I don't think one site has everything -- each one has its strengths and
weaknesses," observes Nelson Timken, a 39-year-old venture capitalist and
attorney in Queens, N.Y., who trades on-line with Waterhouse Securities. "I
have not found any one site to meet all my needs, but so far I have used only
free sites," adds Louis Gipson, a 46-year-old registered nurse from Chico,
Calif., who trades on-line through Dreyfus.
Of course, not all investors feel the need to surf the Internet extensively for
their investing information. Tony Austin, a 35-year-old structural engineer in
Charleston, S.C., has an account with Edward Jones, a full-service broker, as
well as an on-line account through E*Trade. He is quite satisfied with the
quotes and research E*Trade provides, and only visits two other sites -- the
Daily Graphs Online site and Briefing.Com.
"I don't need advice or information," he says. "But when the market turns
downward and investors by the droves start logging on to sell the stock, I want
to be able to get on as well." |
