Thinking about Investment Courses
03/09/2005
Before I move onto my stock and spread bet outlook for the week, I thought I would give my views on investment courses. I get a lot of emails from readers essentially asking if they should spend large sums of money on courses.
Since there are so many courses out there I thought I would create my '15 Point Investor Training Checklist' - this should be in my view the industry 'Gold Standard' for deciding if you should undertake a particular course, seminar or other such product.
1. Public Performance
Have they had their stock performances tested publicly - ie live during its lifetime, not just ex-post facto. (for instance on Bloomberg TV!) By reputable independent 3rd parties (eg Financial Times, or Barlcays)
Number of course attendees is not verification. Offer courses for free and of course you'll get thousands of attendees. Also cheques from their brokers are not enough either - a clever scam is to open two brokerage accounts and do exact opposite trades and only show the winning account!
2. Independent or work for a broker?
An employee if a brokerage is not ideal. Independent training is best because you are not being educated from a skewed perspective and only shown one set of products.
3. Have they won any industry awards?
See the industry/peer reviews not just private investor ones. Many trainers are simply not respected by their peers and so will be loathe to quote the industry view about them.
4. The media wrote about them so they must be good!
Some soft journalist piece about the wonders of your trainer is not good enough.
5. Do they manage money?
What is the name of their FSA regulated firm which is authorised to manage money (not just authorised to publish tip-sheets etc) It's all very well trading your own cash, anyone can do that. But do other people entrust them with their money to manage? Are the regulated by the FSA to do that?
6. Do they offer money back guarantee?
Are they that confident in their product, or do they HAVE TO take your money and run?
7. Do CEOs of leading institutions back them?
It's easy to get private investor testimonials if you teach enough people - someone is bound to be happy by chance. But will CEOs put their own reputations on the line to back your tutor?
8. Has a prominent publisher backed them?
Has a prominent publisher like Financial Times, Wall St Journal, Bloomberg or on the web someone like ADVFN, backed their credibility and considered their content such that it merits them risking their own reputation on the teacher?
9. As seen on TV! No!
Any fool can get on TV, whether it is Bloomberg or whatever. That counts for nothing. But does the TV company have enough faith in the commentator to offer them a paid contract?
10. Magazines - so what?
Does the magazine have so much faith in their know-how they made them a regular columnist or even better a guest editor?! Having written a few articles counts for nothing.
11. Academic Credentials?
So they claim to know about trading? Presumably they have some academic credentials to back it up? And no, having a degree does not count. And don't let them pass you off with that 'left school at 16' or 'college drop out rubbish' - what you think Soros doesn't have a degree in economics? You think the Head of Trading at Goldman Sachs left school at 16? That might work for business and Microsoft, but it does not for traders.
12. Communications Skills?
Where were they taught communication and teaching skills? You wouldn't accept 'practice' from your doctor would you. Did a TV company teach them presentation skills or their profession (for instance Justin Urquart-Stewart is a good communicator because he was a barrister).
13. International?
Their publications been translated? By reputable publishers? Are their financial trading columns syndicated abroad - are they that good? Or did they go on holiday and lecture the guy on the next table and call it international experience?
14. Which institutions investors have they taught?
Which reputable institutions have trusted your tutor to teach their clients? What number of institutions? One is not enough. Ensure the tutor was not just an employee but independent outsider.
15. Website
Just as they say to judge a man, look at his shoes. So does their website look professionally designed and best of breed calibre or is it a bit cheap, and 'fly-by-night'?
Does it have stock market data? After all if they're teaching you about the markets, you'd expect their site to have market data.
Hope you found that useful. Anyway, back to the markets. When I look through some of the major companies ie see broker upgrades, so other brokers buy in, earnings doing well, or company announcements being positive - all leading to rallies.
For instance, BHP, Man, Rio, Aviva, mm02. In fact of my 6 picks on BBC2 in January for the year - all, bar one, are outperforming the FTSE 100, 250 and All Share indices - an of course all are up.
Value-Growth
On my value growth criteria which are based on stocks meeting revenue and profit growth and good value based on criteria such as price earnings growth, the following names come up. Remember they are for a 6 month outlook: several same as last week and a couple new names: Allied Irish Banks, Kier, Galliford Try, Nord Anglia, Brandon Hire.
Remember I am targeting about 20-20% with the value growth criteria. Last year it produced 33% return.
Momentum
Looking for the pure momentum price plays, ignoring value and growth for a moment the strongest trends are in the following and are worth examining: Xstrata, International Power, Croda, Savills.
Crazy Small Stock
These are high risk volatile stocks which could move sharply higher or move sharply lower in my view, but will almost certainly not stand still. Names on the radar include: Plantation, Global Natural Energy, QXL.
Also, if you would like a free multi-media CDROM on 'Investing Better', which covers spreadbetting, CFD trading and momentum indicators like the MACD, posted to you then drop me an email with your postal address to alpesh@tradermind.com.
Spreadbetters
Spreadbetters and futures traders often look at hard and soft commodities. Here's my quick take on the action for the week ahead:
- Oil: Mixed
- Copper: Mixed to lower
- Gold: Mixed to higher
- $/£: Mixed
- Dow: Mixed
- FTSE 100: Lower
- Soyabean Oil: Higher
Email me if you'd like to know about my spreadbetting trader training CDROMs: Alpesh@tradermind.com
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