Tuesday, December 14, 2004

Sell-side doing you any favors?

I like surfing into the Motley fool from yahoo finance because they throw in statements like "We're not buying ridiculous stocks like Taser and travelzoo" so that their article will get linked from the TASR and TZOO press release page on yahoo finance and other sites like that. It never ceases to amuse me that they do this every chance they get. The motley fool presents another article to sell their 2005 book of stock picks because they did such a great job picking stocks in 2004. I read the entire article and was impressed when Mann was talking about identifying two stocks that I have watched do well this year: GRMN and SE. But then I got to the bottom of the article and read the punch-line: "Bill Mann is the editor of Stocks 2005, as he was with Stocks 2004, Stocks 2003, and Industry Focus 2002. He owns shares of none of the companies mentioned in this article. Stocks 2005 is on sale for a limited time, so act now!" He doesn't own any of the stocks mentioned in the article eh? They listed all the stocks that they picked in the article!

My whole problem with this deal, and the reason why "The Motely Fool" isn't for me, is that there is clearly a conflict of interest either way you go here. Why doesn't Mann own the stock's he's recommending? But if he owns them and then recommends them, other people will cry foul about pumping. No, sadly the truth is that we're alone. Anybody who is good enough at stock-picking to make a fortune doesn't need to be selling you their picks. They don't need you. My idea of a fool is someone who pays for tips, and even greater suckers buy 'em and hold 'em through thick and thin like "the fool" tells you to do. I can't think of any reason to hold a stock while it is going down if you don't have to. So why is it that "the fool" tries to paint the traders that run stocks like TASR, GOOG, and TZOO up into the stratosphere as the same people who ride them down to the bulletin board exchange, rubbing their bums and wondering where their pile went? Because they need you. Don't be a fool, study winners, not losers.


At 12:32 PM, Anonymous Anonymous said...

So true, so true. Most people who make a living from trading are too busy to write a newsletter etc.

At 4:40 PM, Blogger Chris Perruna said...

I was reading you blog today. Good job!

I agree with you 100% when you speak about fool.com. What a load of crap that comes from that "retail" site.


At 5:22 PM, Blogger jontait said...

Thanks Chris =) Still anxiously waiting until your site goes prime-time!


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