Tipsters and Publications

Q. Are there any tipsters or trading publications that you recommend?


A: Generally the effects of promotion are arbitraged away by specialists who have bought the stock before you did and will be selling the stock on an accelerated version of buy on the rumour - sell on the news. So from the trading point of view promotion can often be a negative whereas from the 18 month horizon "investor" point of view (remember the old days..oh-me, oh-my...) the increased liquidity, newsflow and greater breadth of other investors can be a good thing.

Tipsheets sheet seems well over my head and if you reckon gambling and spreads huge I'll leave well alone. A tip sheet is simply something you subscribe to and you get emails/newsletters with recommendations. The idea is that someone else does the research for you. Problem is that if X plc is recommended as a buy at 10p , everyone wants to buy at 10p on Monday morning. The market makers know this so they put the price up to 12p. Of course if, as sometimes happens, the share rises to 50p , then it doesn't matter too much -but for every one that does that, there is another one that bombs.

Used to follow a tip sheet.
A share would be (say) 8p bid, 10p offer.
You couldn't buy it for 10p so you pay, say 12p.
It rises to 14p bid, 16p offer.
Advice is to sell. You can't get 14p - you get 12p.
Tipster says profit of 14-10/10 x 100 = 40%
You've made nil and had two dealing costs.
Spreads are huge.
Regard as gambling imo

In my broker days when I worked in a "box" in the pre-screen stockmarket and Mr Bearbull used to phone us for prices just before his publication deadline. We could sense from the pattern of price enquiries and newsflow which stocks he might tip that week. Blue buttons bought these at close the night before publication and happily sold them into the market the next morning when the tip appeared in print. Moral - sell the shares boosted by Investor Magazines rather than buy them.

Financial advisers, analysts, tipsters etc, do not know any more than the average well-informed private investor; if they did, they would not be working as financial advisers etc. but would be sunning themselves on their yachts in the Mediterranean.

"but a test to his success is 'do people pay his fee to get the information he provides?"

I disagree entirely, there are many advertisements in the press for all sorts of share tipping, horse racing, forex, spread betting systems, which clearly make a living, as they appear regularly, yet if you Google their names, you can find a host of people complaining that the service they paid for failed to deliver.

Yet new people still respond to the ongoing adverts, and come in and pay for them because they see the advert, and don't research it properly. But that doesn't mean the services offered are good, IMO, just that a new set of people get attracted to the offer.

"he offers a service for people who wish to buy shares but do not have the time or interest to research for themselves."

Spot on, MOST people seem to want to be lead by the hand, and you could argue they get what they deserve!

Having said this below are a few publications that I subscribe to as I like the style of them and most of the 'tips' 2 each month usually are worth looking into even if its just to get a style of your own. Again the market makers play around the day after publication but as you always do your own research, etc. you can usually get in at a price that suits you, if you want to.

  • Momentum investor (monthly)
  • Sharewatch (monthly)
  • Trendwatch (more a market analysis than "tips" although it does tip a couple of momentum shares in each bi-weekly issue)

These cost me around £300 per year and to be honest well worth it, Momentum probably the best for style and content, Trendwatch probably the best for market update, etc. Sharewatch the worst of a good bunch.

Q. Which are the best spreadbetting books out there to read?

A: You don't really need any special books for spread betting as most of the information can be found online. However, to mention one The Financial Spread Betting Handbook - A guide to making money trading spread bets by Malcolm Pryor is a good read with some chapters on technical analysis and plenty on how to do practical stuff. Wouldn't recommend it to someone who had a fair amount of market knowledge already though. I would really suggest you to read some of the articles on this site first.

For those new to the stock market I think the Naked Trader is a good starter, covers all the basics well, and is an easy read. Although I can see where some others are coming from in terms of him selling the lifestyle of a trader, but I read that more as him trying to sell his books. To be honest my opinion of Robbie Burns after reading the book was that he was an extremely good businessman /entrepreneur, although not necessarily an extremely good trader. He certainly made his capital outside the market, and was looking to diversify his income outside of the market through books, seminars, corporate advertising..etc, and of course letting people see his trades is another winning idea to get people in after you, move your stop up, and thus you're in a position where it's difficult to lose money.

Some other worthy trading books you may want to read are -:

Trading In The Zone by Mark Douglas
Stock Market Wizards, New Market Wizards and Market Wizards by Jack Schwager
Money Management by Ryan Jones

'Trading in the Zone' was one of the books that I read early on in my trading career and it was helpful in getting me down the right path to the trading world; the book will help you understand that trading is less about the markets and more about your mental and emotional state. It will also help you understand that successful traders consider stock market trading as a business enterprise and not as a game.

'Come into my Trading Room' is another good book I have read more than once, and I'd highly recommend it, but not to a newbie. It's not the kind of book you could pick up and read through in a sitting, and I think you'd get the best out of that book if you had at least taken off your training wheels, and had some experience in the market. It's a seriously good book, but it is a serious book.

Quite liked 'Investment Madness' by John Nofsinger too, in terms of the psychology of the market. Easy reading, interesting and quite a few funny anecdotes. Although the repeated message of it's almost impossible to beat the market, is somewhat depressing in terms of that is exactly what everyone who invests in the stock market is trying to do.

If your advisor's recommendations are so good, why isn't he or she making the same investments? You know the answer to that one. Financial advisors make money on commissions and fees, while financial institutions often practice exactly the opposite of what they preach to their clients.

 ...Continues here - Bonds and Index Linked Gilts

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