Wall Street money manager James J. Cramer has all the tools of his craft. A pair of expensive proprietary machines provide him with instant stock quotes, historical trading data and financial information from markets around the world, at a price average investors could never afford.
Early on a recent morning, however, both machines crashed.
Once, that would have been a crisis. No more. Cramer simply logged on to the Internet, clicked on to one of his favorite sites, Yahoo Finance (quote.yahoo.com), and perused Reuters financial news from around the world. “It’s a terrific site,” Cramer said. “It’s a way to go into deeper stuff, too.”
In fact, the site, a part of the Yahoo! Internet service, has so much free news and market information that Cramer began wondering why his firm pays $1,500 a month for Reuters service.
It’s not just Reuters that is putting so much information on-line. For individual investors, the Internet represents a quantum leap. Research materials that three years ago were available only to the pros, or that carried prohibitive price tags, are now available on-line. Free.
“It’s really leveled the playing field,” Cramer said. “Individuals are doing it themselves. They either have more time or they feel the game is no longer rigged.”
Any investor who has surfed the Internet knows it’s a snap to get instant stock quotes. Just two years ago, those quotes cost $300 a month. A year ago, many services still charged $30 a month.
“You are talking about over two years something that’s lost all of its paid value,” said Michael Gazala, senior analyst at Forrester Research.
Similarly, not long ago an investor who wanted Securities and Exchange Commission filings had to buy them from a service in Washington, D.C., and pay for delivery or fax service. Getting a 10-K, the annual report companies file with the SEC, typically cost $30 plus shipping.
No more. Now all SEC documents are available free at the agency’s Web site (www.sec.gov). There is even an archive (www.sec.gov/cgi-bin/srch-edgar) to find older documents.
Getting quotes and reading SEC filings are just the start. Along with the boom in on-line stock trading–Charles Schwab said 40 percent of all its stock trades are now handled on-line–has come a torrent of free news and research materials on-line.
One of the easiest ways to get started is the Yahoo! site My Yahoo (my.yahoo.com). My Yahoo lets a user create a personalized newspaper and monitor a portfolio of up to 30 stocks. With a click or two of a mouse, investors can retrieve basic financial information and Wall Street research, or link to other sites, including one for paid subscribers run by Cramer called The Street (www.thestreet.com).
Another excellent free site is StockMaster (www.stockmaster.com). New users must register and volunteer some personal information, but in return StockMaster makes it easy to build and monitor a portfolio. This site also has plenty of information about mutual funds and makes it easy to read SEC filings.
In particular, StockMaster lets an investor pull up the most important part of a company’s annual 10-K filing, a section called Management’s Discussion and Analysis of Financial Condition and Results of Operation. This is where a company tells the SEC about its performance over the past year and its financial condition, without any sugarcoating.
Another free site is The New York Times (www.nytimes.com). It offers portfolio tracking and probably has the best financial news of the big free sites. America Online also offers a wealth of good financial news and information to its members, who pay $21.95 a month.
Don’t forget either that most mainstream business magazines, such as Business Week, Fortune and Money, and daily newspapers also operate Web sites. Most of them let readers get quotes and track portfolios and also put their print content on-line free. “I’ve canceled a ton of subscriptions,” Cramer said.
For investors interested in chatting with others about stock ideas, the Motley Fool (www.fool.com) and Techstocks (www.techstocks.com) have good bulletin board services.
Be aware, however, that boards are often preying grounds for people who hype or disparage stocks without accountability. “Manipulators tend to flock to Web sites to promulgate gossip, rumors and outright falsehoods,” said Steven Eber, a Coral Gables, Fla., money manager who prefers to use the Internet to get SEC filings and industry reports.
To temper the hype of the bulletin boards, visit First Call (www.firstcall.com), a service that compiles Wall Street research and issues consensus earnings estimates. Or, to do a little research yourself, zip over to Stock Screener (www.stockscreener.com), a service that lets users plug in their own criteria and then searches for stocks that match it.
For investors who trade individual stocks, brokerages now make research and news available on their Web sites. SmartMoney magazine recently rated Charles Schwab (www. schwab.com) No. 1 among a dozen major on-line brokers.
The Schwab site can be used by people who don’t have accounts, although account holders can access more information. The site includes discussions with Wall Street analysts, stock screening tools and insider trading information.
SOME SITES TO SEE
– To build and monitor a portfolio–My Yahoo! (my.yahoo.com); New York Times (www. nytimes.com); Stock Master (www.stockmaster.com); NASDAQ (www.nasdaq.com); The Motley Fool (www.fool.com); Quicken (www.quicken.com); America Online (www.aol.com)
– To research stocks–Quote Yahoo! (quote.yahoo.com); First Call (www.firstcall.com)
– To research mutual funds–Morningstar (www.morningstar.net)
– To find SEC filings–Securites and Exchange Commision (www.sec.gov). To search the SEC archives directly, try www.sec.gov/cgi-bin/srch-edgar
– To build stock charts–Stock Screener (www.stock screener.com)
– General news sources–Money magazine (www.money.com); Smart Money magazine (www.smartmoney.com); Barron’s (www.barrons.com); C/Net (www.news.com and www.cnet.com); Business Week magazine (www.businessweek. com); Worth magazine (www.worth.com); The Street (www.thestreet.com); Wall Street Journal (www.wsj.com)
– Bulletin boards–Tech Stocks (www.techstocks.com); The Motley Fool (www.fool.com) charges a subscription fee.
