Many years ago, before mobile phones were invented, I had a broker. It was in the days when you walked into his den and chatted face-to-face. The one recommendation that still sticks in my mind was to buy Ferranti shares. The timing was amazing - they went bust only a few short months after the recommendation. I had held on all the way down because of my trust in my broker who drove a very nice car so must have been good at what he did.
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These days you don't need to leave the comfort of your lap-top or mobile phone to get advice from a broker but I suspect the quality of the advice will not have improved. Now I do my own research into shares and suggest you either do likewise or get your stock market exposure in the form of an index tracker.
Sadly, advisory services do not come with the wealth warning they merit!
Talking of papers take your pick of the business headlines about Marks and Sparks. I've had a few e-mails reckoning I was crazy to be short of Marks and Spencers and who knows they might be right.
Anyway the Times reckoned: ‘Marks and Spencers reveals Xmas Blues’ The Telegraph – ‘Analysts to cut Marks and Spencers forecasts amid sales fears.’ And now the Mail: ‘Marks and Spencers on track to burst through billion pound profits after a robust Xmas performance’.
Well, there you are - take your pick. I reckon they probably did OK but the outlook won't be too hot. Just got to decide whether to stick to the short that is yielding a nice profit now.
Recently I read an interesting article in The Guardian - according to a study by academics investment newsletter tipsheets and magazines don't fare well when put under the microscope. Professional analysts too weren't much cop.
A profits warning on Northern Rock brought out loads of buy recommendations from people like Goldman Sachs and Standard and Poor's (when the shares were trading in the 800s!).
Why do people bother with share tips? Apparently investors seem to think experts have a crystal ball.
The best analysis on this comes from Professor Scott Armstrong who reckons people buy tips because the client is not interested in accuracy but avoiding responsibility. The client basically wants to blame someone else for their shortcomings and lack of their own research.
Sounds about right! Investors should always do their own research and not blindly follow others. People are lazy I guess.
Good luck whichever path you decide to walk but please beware - no-one else will look after your cash as diligently as yourself!