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Just how useful
is the internet for investors? This book believes the net offers the opportunity for
investors to use the resources of some of the worlds best analysts and traders. The
net provides a transparent view of performance, analysis
and investment style that has not been available before. In the past
investors found it difficult to get access to a wide range of opinions. The net changes
that, and these two writers believe it provides a tremendous advantage.
Forget the hype
surrounding irresponsible chat rooms and the rantings of unknown individuals. There are
many solid and reputable investment sites on the web. This books lists 20 US sites and
carries extensive interviews with the site founders. The investment and trading styles
range from long term fundamental investing to an example of short term day trading. The
emphasis is on the fundamentally based, long
term investment styles. This is a well trodden path, but the web sites mentioned provide
some interesting applications of this approach.
What gives the
web the advantage is the simple fact that financial institutions and analysts do not make
money from issuing good advice and picking good stocks. They make money from the fees
charged to investors via brokerage, and from companies via advice and associated services.
The net is
different. The sites mentioned in the book do not receive commission fees if a reader buys
a particular stock. They do not get a cut
from the transaction costs. Many of the sites are free, or have a free component. Those
that charge a fee make their income purely from good and accurate analysis. It is a test
of proof that few institutions who provide analysis for retail investors can pass.
will not find much that is new in the book, although they may wish to explore some of the
sites in more detail. The book is written by Wharton Business School students, so it is
mired in some out of date understandings of technical analysis. The book is important
because it suggests that traders and investors can harness the reputable knowledge
available from the net and improve their understanding of the market, and their trading
results. Intelligent minds tend to gravitate
together on the net, and your challenge is to find those points.
Sites such as
the infamous Motley Fool bring together smarter and more up to date fundamental analysis.
It is not a place for hyped up stock ramping from compulsive day traders and scammers. The
investment philosophy is Benjamin Graham, but it is applied using the most up to date
This is the key
message in the book. The internet is a valuable investing resource and with a little work,
you can make this meeting of investment minds work for you.
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