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DECEMBER 8, 2000
By Robert Barker
What's New in Investing Sites? Plenty Some are hidden treasures, others are merely interesting. Even the best, though, should be used with caution
Only this past summer, I brought you a list of new investor-oriented Web sites (see BW Online, 7/21/00, "Ten Sites Worth Investing Your Time In"). I figured that list would last until next summer. I was way wrong.
So many Web sites are popping up now that I'm back this week with another bunch, most of them entirely free, aimed at individual investors. If you're in a hurry, check this table to see a list and Web addresses. If you have five minutes, read on to see what I discovered about each when I took a breakneck Internet tour recently.
The first, 3DstockCharts, has been around since last winter. My first impression then, which was reinforced last summer, was that this was really great for day traders but not so useful for the rest of us. Since then, I've reconsidered. What this site does is create information-packed charts of stocks trading in the "third market" -- that is, on one of the new off-exchange, off-Nasdaq trading systems, also known as "ECNs," such as Instinet, Archipelago, and Island.
After registering at the site's home page, I punched in KREM, the ticker symbol for Krispy Kreme Doughnuts. It took a few moments, but then a cool, three-dimensional chart of the "buy" and "sell" orders appeared. In this picture, I could swiftly see the market for the stock -- that is, the price of the most recent trade and all the orders stacked up to buy below that price and all the orders to sell above it. Most investors don't need this most of the time, but it wouldn't hurt anyone preparing to trade to check the market before acting.
WATCH OUT BELOW! At insiderSCORES.com, the giant market-data firm Thomson Financial brings together a lot of the scattered information about stock trades made by company officers and directors. It next grades these insiders' ability to make timely investment moves and then highlights new moves by insiders with good track records.
What good is this? Investors in Burlington Resources, for instance, might be interested to know that CFO John Hagale, who has seen Burlington shares fall after each of his past five sales, recently reported another sale. I wouldn't make a trade myself based only on one such bit of information, but what insiders are doing, especially ones that have shown foresight in the past, is worth considering.
Money.net bills itself as a one-stop financial site for individuals, so it gathers a bunch of personal-finance tools and information. The only unusual feature I found is a free, real-time portfolio tracker called "Screamer." Enter your portfolio, and you can watch the price of each holding change in real time. The risk here is becoming fixated on the moment-by-moment changes in value. But compared to the static portfolio trackers found at most free sites, this is a big step up -- and a preview, I bet, of what will be commonplace not long from now. I wish it would let users import portfolio data to avoid having to labor at the keyboard.
TAKE A STRESS TEST. Another neat toy can be found at Portfolio Science. Here, you can create a portfolio and see its risk of losses on a daily, weekly, monthly, or annual basis in either percentage terms or actual dollars and cents.
To test it, I created a four-fund portfolio. This took about five minutes. Next, I asked the site to analyze my portfolio's risk, and up popped a screen telling me that on any given day this $220,000 portfolio might lose $4,047.62, or 1.84%. I also was able to compare that with the risk in the Standard & Poor's 500-stock index and other indexes and to perform a "stress test" designed to show how badly my portfolio would be hurt if the S&P 500 dropped a given amount. Depending on how your portfolio is invested, the results of a stress test might be eye-opening.
Early this year, GainsKeeper.com showed how much more easily we all could keep track of the tax implications of portfolio moves. Its portfolio tracker was built with the idea of producing a Schedule D, the tax form used to report capital gains and losses to the Internal Revenue Service. I think its service is great, but it costs $49 a year for a basic subscription.
AN EXERCISE IN OPTIONS. GainsKeeper has a new free competitor, My Capital Gain. At the moment, it's a stripped-down tool and not all that user-friendly, with little in the way of online support and educational material. Given the price, this might be adequate for some traders. But my bet is that any active trader will still find the subscription fees at GainsKeeper a bargain.
An even tougher math problem for most investors is figuring when to cash in employee stock options. A number of sites have popped up featuring tools to help with the calculation. Now comes one from Pennsylvania State University professor Steve Huddart. With admirable directness, he calls the tool Should I Exercise My Stock Options?
The calculator takes into account how long until the option will expire, the underlying stock's exercise price, and its current price to figure out how much of the option's likely value you might capture by exercising now. The results and explanations may be a bit complicated for many individual investors. But I think a trip to the site is a worthwhile detour for anyone bent on exercising their options.
DIGITAL WIZARDS. Just how smart are brokerage firm analysts? That's the question that StarMine attempts to answer by rating the top stock analysts in various industries and then alerting investors to their boldest picks. After registering at the site, you can also view StarMine's SmartEstimates, a way of trying to improve on consensus earnings estimates by putting more weight on those made by the analysts with the best track records. Good idea.
Not such a good idea is SmartRatings.com, which bills itself as a virtual investment adviser whose "wizards" can make "buy" and "sell" recommendations. These wizards are really daily computer searches that use various stock-picking strategies. Since the basic service is free, it probably can't hurt to troll here for ideas, but this should be the just first step in an investment search. You also can subscribe ($24.95 monthly) for an expanded service, but I'm skeptical: There's nothing truly automatic about investing.
TheLion.com is another free research tool that's designed for the compulsively comprehensive investor. It gathers all the message-board postings about a given stock from many investor sites, including Yahoo! Finance, Raging Bull, and The Motley Fool. All told, TheLion.com claimed the other day to have access to 26,892,367 messages. That's got to be more blather than this world needs. Then again, it works swiftly and would probably save some people some time.
IS AMAZON UNDERVALUED? My last stop was at ValuEngine.com, a site featuring some of the stock-valuation models of Zhiwu Chen, a professor of finance at Yale University's School of Management. It's a fun place to play for free (premium subscriptions, granting use of extra features, run $19.95 a month).
You can call up the site's opinions on whether any given stock is overvalued or undervalued. I punched in Amazon.com as a test and found that ValuEngine thinks the stock, at $26.75, was 38% undervalued. That questionable conclusion alone sums up what I think you should bear in mind at all of these sites: If they help you think through an investment problem, fine. Just don't take their answers as gospel.
Barker covers personal finance in his Barker Portfolio column for Business Week. His barker.online column appears every Friday, only on BW Online
Questions? Comments? Let us know at our barker.online interactive forum
Edited by Patricia O'Connell