storyThe
story
NymbleInvestor.com is a subscription-based site offering a unique blend of short, medium, and long term equity investment prospects. Also available are extensive research reports on market sectors and specific companies, commentary on new directions in the market, educational articles, and audio interviews.
Investors are flocking away from traditional brokerages. They save huge sums of money in commissions but at the cost of losing access to important information about markets and specific investments. Most independent investors now obtain the majority of their news on the Internet. However, the Internet can be a mind-numbing and dangerous place.
NymbleInvestor.com was created in response to the twin developments of the move toward independent investing and the rise of investing-related Internet sites. To meet the challenges of the first development, our research and prospect lists will provide information on specific investment vehicles investors used to get from their brokers. Our "Daily Report", accessed via an e-mail sent to you before market open each day, is formatted to provide information without a lot of noise or hassle. To address the pitfalls of the second development, NymbleInvestor.com has a primary focus on honesty. We'll tell you up front if we have a position in an investment we discuss on the site. Furthermore, we'll update the disclosures of our positions daily with any changes we made the previous trading day. No other site offers this level of disclosure for their entire staff.
According to an Associated Press wire story, online trades in the first three months of 1999 averaged roughly 450,000 per day. This was an increase of more than 30 percent for the second consecutive quarter. Investors on the Internet do about 440,000 trades daily from a total of over 6.4 million online brokerage accounts. The research firm International Data Corp. expects the number of online trades to double by the end of 2000. At last count, one of every seven trades was being made over the Internet.
An article appearing in the April 5, 1999 Wall Street Journal suggests that the decreasing inflow of money into mutual funds is largely the result of investors like you taking stock choices into your own hands: "Laszio Birinyi, a trading strategy consultant to Deutsche Bank Securities, says that many investors, unhappy with the results in mutual funds, have shifted to trading stocks themselves. 'Individuals first buy stocks they know, and secondly they buy stocks that have done well...'"
In an April 1999 Bloomberg Feature Article, the president of market maker Herzog Heine had this to say about the new paradigm in investing: "Individuals are now taking the thrust that institutions used to have in moving markets." He added, "The genie is out of the bottle, and you're probably not going to put the genie back in..."
You, as an independent investor, are participating in a major paradigm shift reaching to all corners of the globe. You are able to sit at your desk and with a minimum investment in software, hardware, and subscription services are able to trade 24 hours a day in exchanges all over the globe. You have immediate trading access to commodities, futures, options, equities, currencies, bonds, and derivative investments.
Into this exciting new world have stepped some not so nice folks. These folks have only their own interests in mind and will do anything to make sure they get ahead of you.
Contacted by the SEC is a well-known habitant of the Silicon Investor boards, Joe Park, aka Tokyo Joe. Park was also profiled in a recent issue of Money magazine. The SEC is concerned that Park is "front running" the stocks recommended on his $70 per month service. "Front running" is the process where a person enters a stock and only then recommends their customers enter a position. This way, any recommender with a following can virtually guarantee making money for themselves. The reason frontrunning is illegal is that it calls into question the motives of the person doing the recommendations -- are they making the recommendation to benefit themselves or their subscribers? Park maintains that he discloses this practice, which he does in general terms on the web site, but the SEC is very interested in him nonetheless. (Update 1/5/2000: The SEC announced today the filing of charges against Joe Park for frontrunning, deceptive disclosure of performance, and other issues. 3800 people currently pay him as much as $200 per month for access. The US Atty.'s Office would not comment about criminal charges, according to a New York Times story.)
It isn’t just Internet denizens participating in a game designed to fleece you. In early 1999, SEC Chairman Arthur Leavitt expressed concern about the practice of Street analysts "padding" their recommendations for the benefit of the investment banking side of their business. By 2001, this problem was even more obvious, causing Congress to hold hearings on the subject. The concept here is that if the investment banking side of the business is about to pitch their services to a company, the covering analyst at the firm will upgrade the stock or maintain a rating the stock would not normally deserve. To illustrate his concern, Mr. Leavitt pointed out that current analysts have eight buy recommendations for every one sell recommendation. This is a huge change from the 80’s where the ratio was closer to one to one. Analysts even have a name for situations where an upgrade is given to increase the chances of his or her investment bank co-workers obtaining business – such upgrades are called "booster shots." If you want a good example of practice, check out the "Heard on the Street" column in the April 2, 1999 Wall Street Journal.
OK, what does all of this have to do with NymbleInvestor.com? We have read dozens and dozens of web-based recommendation sites. We’ve read tens of thousands of posts on chat boards such as those found at Yahoo and Silicon Investor. We’ve watched investigative reports on CNBC and read about SEC investigations in the Wall Street Journal. While there are some sites we felt like we could trust, we could never be sure exactly what was going on behind the scenes.
NymbleInvestor.com, with its complete and conspicuous disclosure of staff members’ positions in any stock we write about, is different. We don’t take payments from companies to tout their stocks. We don’t purposefully front-run stocks although we may end up buying and selling around the same time our readers do – after all, we’re investors too. We passionately believe this level of honesty is important. There are too many macro-level things to keep track of in the stock market to have to worry constantly if you are getting scammed by the service you trusted to inform you of investment prospects.
We are passionate supporters of the trend away from traditional brokerages and towards individuals managing part or all of their own portfolios. In our experience, the Street and their entrenched processes are designed to separate you from as much money as they can get away with. While no investor can escape all these activities, hopefully we can give you a fighting chance by keeping you aware of of possible pitfalls.
When you cut the apron strings from your broker, your commissions drop and freedom increases. However, access to important market information and in-depth knowledge often suffer. Even though conventional wisdom sees brokers as being wrong more often than right, they were still an important source for information for most investors. More than anything, that’s why NymbleInvestor.com was started – to give you an independent and honest source for information about as many facets of the markets as we can cover.
At NymbleInvestor.com, you’ll get everything from swing trading ideas to rumors about buyouts. We’ll share amazingly thorough research into market sectors and companies – research of such high quality we’ll place it head to head with research from the biggest brokerages in the world. You’ll read about long-term prospects and even strategies and ideas for investing in mutual funds. In short, something for every portion of a modern independent investor’s portfolio.
You are why we are here. You are using modern trading tools in an increasingly fast paced marketplace. Our daily publication assists you, the independent investor, in being "nymble" and informed.
We cannot pledge to you to be correct all, or even most, of the time. What we will pledge is that we will work very hard to present you with our best ideas. Above all, we pledge all of our activities will be done with honesty and with full disclosure.
Thank you for visiting, reading, and hopefully subscribing to our service. Please feel free to contact us with comments, ideas, questions, and concerns. We love to hear from you.
P.S. (November 2000) We've carried this same philosophy over to our new site at BiotechMonthly.com -- except now we're focused on development stage biotechnology stocks. Come check us out.