To: Famularo who wrote (4647 ) 4/1/1998 3:04:00 PM From: Jimsy Respond to of 7966
Frank - quite frankly (no pun intended) most of those newsletters operate the same way and without much due diligence. They find a bunch of bottom fish stocks, pick up some shares themselves (usually declare they have), then recommend them to their followers who when they start buying up the stock bid up the price. Then depending on the savey of the newsletter writers they sell into this price appreciation and make some money. So they collect money off their subscribers to send out recommendations which they act on to drive up the stock for the newsletter writers. The reason the newsletter writers don't complain about reposting of their recommends is that by the time that is done, the stock has usually gone up, and the news letter writer just has a wider distribution to sell into, thankyou very much as I take my money to the bank. Some of the newsletter writers even get paid by the companies they write about, and the companies, make claims that so and so news letter writer has written about them - its really hilarious to observe this. The Internet sort of exposes some of this nonsense, and is a threat to the newsletter writer. No longer is the newsletter writer in good control of his game plan. As soon as he recommmends something, the followers can get on the Internet and check out why the recommends. In many cases, I expect that the recommends are totally without any basis. I have put my Tradestation 55 indicators on some of those recommends from time to time and they really look like nonsense. So the Internet has greatly levelized the playing field in many ways, and this is all for the benefit of the common investor. If you go after the justification of recommendations, basic fundamental information in SEDAR or EDGAR, news releases, charts with indicators, insider trading, other peoples opinions, you may be less likely to be conned into some worthless stock. Guess we'll see many of these newsletter writers here in Toronto at the end of April, some of them are quite funny and witty and I enjoy them for their humour, but not much else.