Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Stockdoctor who wrote (79558)	6/16/2002 4:04:24 AM
From: Chispas	Read Replies (1) \| Respond to of 99280

INVESTORS REBEL By ISABELLE SENDER -------------------------------------------------------------------------------- June 16, 2002 -- Individual investors are taking their cue from the likes of Patrick Henry, Paul Revere, Betsy Ross and George Washington: They are demanding independence. With Wall Street's crowned heads exiled and its jewels tarnished by scandal, investors are increasingly turning to independent sources for investment opinions. "The individual is very suspect of Wall Street research in general. They know now that it may just be an extension of the marketing arm to sell stocks," said Sam Stoval, senior investment strategist at Standard & Poor's, which also offers stock research - although S&P's research is untouched by investment banking conflicts. And S&P is not the only independent source of research. There are dozens of companies that truly analyze stocks for the benefit of individual investors. If recent growth figures are any indication, individual investors are increasing their use of objective sources. Established independent firms for retail investors - such as Value Line Inc. and Morningstar - have seen growth in their business. Value Line said total subscription circulation is up about 18 percent from the same time last year, while Morningstar has seen about a 50 percent increase. "We owe that to Wall Street," said Pat Dorsey, director of stock analysis for Morningstar. "Not only with regard to the open secret that there is inherent bias in sell-side research, but also that if your stocks are not going up 10 percent a week, you got to do some work." The established Wall Street brokerages aren't particularly good at keeping investors from losing money, especially since they feel pressured to recommend the stocks issued by companies with which they have investment banking relationships. "Right now there aren't that many ‘sell' recommendations on the Street, even though we're in a bear market. Truth be told, I would bet that the number of ‘sells' still don't even comprise 5 percent of all the recommendations on the Street," said Bob Rack, president and chief operating officer for Schaeffer's Investment Research. By contrast, a whopping 40 percent of the recommendations Schwab puts on stocks are "sell" ratings. Individual investors may be better served by independent research, but they will probably have to pay for it. The big Wall Street brokerages make their research available for free to clients because they are paid in other ways, such as from investment banking fees. The independents, on the other hand, are more likely to charge for their research. The large independents generally have a sophisticated staff that conducts research on thousands of public companies and hundreds of industries, and they publish and distribute their research in reports. Value Line's research department costs $5 million, according to Stephen Sanborn, research director. That's why the company has to charge up $995 for an annual subscription to its full array of research analysis on 10,000 stocks. Charles Schwab believes it has solved the problem of generating research without the cost associated with it. Starting in May, they let computers, not people, generate research. It's free to Schwab customers and is not available to other investors. ___________________________________________________________ From the NEW YORK POST