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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (116931)	4/13/1999 9:16:00 AM
From: Mohan Marette	Read Replies (3) \| Respond to of 176387

<--OT--> Individual Investors Are Becoming Institutions Glenn: Nothing do with Dell but a lot to do with us little guys,interesting how things are shaping up in the investment world. ============================== (Source:Industry News) The financial-information services available to the ordinary investor are beginning to rival those used by the wealthiest firms. By Megan Barnett There's a reason institutional investors make healthy returns on their portfolios. They're smarter than individual investors. But it's not because they have higher IQs or because they studied economics at Ivy League universities. Institutional investors are smarter because they enter the market armed with a wealth of timely, selective information. Individual investors are sometimes unaware that they are denied access to information fellow shareholders hold. But the Internet is changing that – and the little guy is starting to wise up. Credit Suisse First Boston's Bill Burnham estimates that the daily volume of online trades grew by as much as 35 percent in this year's first quarter, while total stock-market trading volume was up just 4.9 percent. Wall Street can no longer ignore the little guy. Yet institutional investors still benefit from up-to-the-minute research and news, executive management presentations and the clout that enables them to beckon a company's CFO to lunch on a moment's notice. The advantages come with a price tag, of course. Most individual investors would never dream of forking over the exorbitant fees institutions pay Wall Street brokers for such treatment. But individuals are getting cheaper trades, quotes and other investment tools on the Web. Why stop there? Thomson Investors Network is the consumer arm of Thomson Financial Services, a large financial data provider that caters to banks, brokers and institutions. Most of its subsidiaries, such as First Call, Securities Data and Investext, are familiar only to investment professionals. But Thomson Investors Network is hoping to extend some of these professional brands to its Web site for private investors. One such brand is Autex, an electronic network of institutional traders that tracks pretrade activity. Before institutions place orders, they indicate on Autex the size and price of trades they are interested in placing. These huge blocks of shares, when traded, can move a stock's market value in seconds. Institutions view the interests of others and can shop around for the shares they are also interested in trading. Autex is the latest service to be extended to the Thomson Investors site, via a program called I-Watch. Individual traders can view the institutional pretrade activity and get a bird's-eye view of the activity on the New York Stock Exchange floor. I-Watch also delivers pre- and postmarket newsletters with commentary and analysis on the market's activity. "Most individuals don't know this activity exists," says Ray Kingman, president of Thomson Investors Network. "It's more than can be described in an elevator conversation." The service is particularly attractive to active traders, who buy and sell throughout the day based on a stock's momentum. Information about the trading activity among institutions can certainly benefit day traders, but what about individuals who want to make educated decisions for long-term investments? Institutions attend road-show presentations, ask questions of company executives, listen to company conference calls and read research before it hits the wires. Individuals are left to sort through countless sites offering bits and pieces of financial information. Last month marked the launch of Bestcalls.com, a service that delivers conference-call information to individual investors. President Mark Coker hopes to increase awareness enough to force every company to open these calls to all shareholders, not just the largest shareholders and Wall Street analysts. And within the next month and a half, individuals can expect to gain access to some investment road-show presentations that are given by corporate executives to institutional investors prior to stock offerings. Atlanta-based Net Roadshow, which was recently bought by Broadcast.com, hosts Webcasts of road-show presentations for its investment-banking clients. Only clients of those banks are given access to road shows today. "You are going to see that change in a big way in the next 45 days," says Brad Hammond, Net Roadshow's president. At the company's www.eoverview.com site, individuals will soon be able to see corporate officers deliver the bullet points of their business models to institutions. Individuals will not be privy to "the specifics of the deal," according to Hammond, but they will have access to the company history and information on corporate officers. Because investing in a company amounts to a vote of confidence in the capability of its management, opening up road-show presentations is key to helping private investors make decisions. But what about giving individuals more access to corporate officers, in a chat environment similar to the Q-and-A portion of the road show? "The SEC says that is considered a 'writing,' and would have to be a part of the prospectus," Hammond explains. "Eventually we'll be able to get there; we're just not there yet." In a perfectly regulated world, public companies would disclose information to all shareholders at the same time. But that rarely happens. While giving these services to individuals will certainly empower them to make smarter investment decisions, it is unlikely the playing field will ever be leveled entirely. The Internet is letting the little guys gain speed, but the institutions are unlikely to let them take first place.