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Showing posts with label Free Stock Tips. Show all posts
Showing posts with label Free Stock Tips. Show all posts

Sunday, September 16, 2012

Are you Aware of Truth Behind Free Stock Research Reports?

Highly Qualified Stock Analysts are hired to provide free research work, not it surprises you? Why is it so?

Most of us have a brokerage account. Most of us also receive free research reports from our brokers.

Of late though, the quantum of free research from brokerages seems to be on the uptick. Most brokerage houses employ a research team that is dedicated to coming out with stock picks and publishing research reports on the same. A lot of money is spent on setting up these research teams. People, databases, office premises are just a few areas where expenses are made.

So we ask ourselves, when the brokerages spend so much in setting up these teams, then why do they dish out the reports free of cost? Do they get anything in return? Or are they putting up reports to just educate and help their investors?

The truth is far from this.

"A leading daily has conducted a study of leading brokerages to establish the reasons for giving out free research. The main reason cited is that the stock based research reports help to generate momentum in the concerned stocks. For example if a brokerage gives a 'Buy' report then the prices of that particular stock are seen rising."

By generating this momentum, the brokerages earn their brokerage fee.

So the next time you receive a free research report, ask yourself. Are you being given an advice on a stock based on its fundamentals and valuations or are you just helping the brokerage house in earning more income for itself?

Considering a "Buy" call given by a brokerage firm, retail investors get into the stock at a higher price.

Many brokerage houses first circulate their research reports internally with all their clients and generates handsome brokerage by suggesting them to have position in the specified stock for short term. Later same research reports are made public using free media like news channels and financial websites to increase buyers and trading volumes. This gives an opportunity to their clients to exit from the stock and poor retail investors relying on these free research reports stuck buying the stock at higher price most of the times.

We suggest all our readers to do ensure that free research reports available through financial websites, news channels should not be expensive for your investments.

Saral Gyan Capital Services is an Independent equity research firm and not a brokerage house, equity analysts at Saral Gyan publish unbiased and authentic research reports of small/micro cap and mid cap stocks under Hidden Gems and Value Picks services. We do not make our research reports public and share it with our paid subscribers only.

Our Services: Hidden Gems | Value Picks | 15% @ 90 DAYS | WEALTH-BUILDER

Posted by Saral Gyan at 9:30:00 PM
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Wednesday, November 16, 2011

Free Trading Tips Can Erase Your Capital

Dear Readers,

Being a stock investment advisory firm, many confuse us for tipsters. Though we have clearly mentioned that we don’t suggest trading nor do we offer short term stock/market prediction tips, but somehow it’s difficult to explain it to people the difference between tips and investment advice.

Now, this article (The below story was shared by Prof. Bakshi in one of his articles in Outlook Profit) is dedicated to all those who seek free tips for intraday & short term trading. Reading this will probably enlighten you on the tricks used by tipsters to dupe you of your hard earned money.

It’s a same old story where you get some initial free tips right and when you finally join the service and act on the next tip (that too with good stake), you end up losing.

There is an element of naiveté involved here and that is this: if anyone possessed the ability to accurately predict stock market movements consistently, he would become a very very rich man so quickly (by trading in his personal account) that he would not find it necessary to sell his forecasts to the general public. Most investors, however, choose to ignore this basic fact and continue to make their investment decisions on the basis of tips. It’s not for nothing that we find common sense so un-common.

And here comes The Story:

This is the story of the man who publishes a stock market prediction newsletter offering advice to prospective clients. One day you receive his newsletter in which you’re offered a free prediction. The prediction is that the stock price of Reliance Industries would rise by more than 10 per cent during the course of the next month. Not paying much attention to the free tip you’ve just been of offered – you toss the newsletter aside.

A month later you notice that Reliance had indeed risen by more than 10 per cent. “It’s a coincidence,” you correctly conclude. Very soon, you receive another free prediction. This time the author predicts that Reliance will fall by more than 10 per cent in the next month. A month passes and you notice that the second prediction has also come true.

Next week, you receive another free prediction. This time you’re told that Reliance will remain range bound and won’t change by more than 10 per cent in the next one month. Bingo! This prediction also turns out to be accurate. Now you’ve three correct predictions in a row!

This goes on for another three times. Every time you get a free prediction, it turns out to be correct.

Can six accurate predictions in a row be a coincidence? “Of course not!” you conclude. “This man has real predictive powers.” So, when the next tip is offered to you as part of a monthly subscription, which would cost you Rs 5,000 per month (some 50% discount offer valid only for 2-3 days), you have no hesitation in writing a cheque immediately. It does not even occur to you that if this man really had predictive powers, why would he offer to sell it for just Rs 5,000? Surely it would be far more profitable for him to keep his secret with himself and trade on it in the futures and options market. Wouldn’t it? These questions do not occur to you. But they should.

Soon after your cheque has cleared, the seventh prediction arrives and this time you act. You take out all your savings and take a leveraged position in the futures market. And you lose everything and more, because your gamble did not pay off since the prediction turned out to be dead wrong!

What is going on here? Were you duped? Yes! But how?

Let us explain by telling you the same story but this time from the perspective of the man who duped you.

This man has no clue whether Reliance will go up, down, or remain unchanged. But he knows, one of the three things must happen. So, he picks a list of 36,450 gullible investors and sends them his first prediction. To a third of them, that is to 12,150 of them, he predicts that Reliance will rise by more than 10 per cent. To another 12,150 recipients, he predicts that it will fall by more than 10 per cent, and to the remaining 12,150 recipients, he predicts that Reliance will be range bound.

It’s obvious that one of the groups would have received a correct prediction and the other two would receive predictions that were false.

Our man now disregards the two groups which received incorrect predictions and instead focuses on the group who received the correct prediction. There are 12,150 people in that group each of whom is sent the second prediction. A third of them, that is, 4,050 people are told Reliance will go up, another 4,050 are told it will fall and the remaining 4,050 are told that it will be range bound. Inevitably, one of these three predictions will be right and so, of these 12,150 people, there will be 4,050 people who would now have received a second correct prediction without the predictor having any idea about the future price action of Reliance!

If this process is continued, it won’t be long before 450 very gullible people would have received four accurate predictions in a row. All of them would be very impressed with the track record they observed and most of them would be willing to buy the Rs 5,000 monthly subscription.

Thus, you become one of those 450 unfortunate folks who lose not just Rs 5,000 subscription cost but substantial capital loss while betting on the short term tips as a part of your subscription. The only one who makes money is the smart tipster, who makes a mockery of your naive thought process.

Next time, use some common sense. After all, it’s your money. 

Happy Investing.


-Saral Gyan Team

Our Services: Hidden Gems | Value Picks | 15% @ 90 DAYS | WEALTH-BUILDER

Posted by Saral Gyan at 8:30:00 PM
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Saturday, October 29, 2011

Truth Behind Free Research Report

Highly Qualified Stock Analysts are hired to provide free research work, not it surprises you? Why is it so?

Most of us have a brokerage account. Most of us also receive free research reports from our brokers.

Of late though, the quantum of free research from brokerages seems to be on the uptick. Most brokerage houses employ a research team that is dedicated to coming out with stock picks and publishing research reports on the same. A lot of money is spent on setting up these research teams. People, databases, office premises are just a few areas where expenses are made.

So we ask ourselves, when the brokerages spend so much in setting up these teams, then why do they dish out the reports free of cost? Do they get anything in return? Or are they putting up reports to just educate and help their investors?

The truth is far from this.

"A leading daily has conducted a study of leading brokerages to establish the reasons for giving out free research. The main reason cited is that the stock based research reports help to generate momentum in the concerned stocks. For example if a brokerage gives a 'Buy' report then the prices of that particular stock are seen rising."

By generating this momentum, the brokerages earn their brokerage fee.

So the next time you receive a free research report, ask yourself. Are you being given an advice on a stock based on its fundamentals and valuations Or are you just helping the brokerage house in earning more income for itself?

Considering a "Buy" call given by a brokerage firm, retail investors get into the stock at a higher price.

Many brokerage houses first circulate their research reports internally with all their clients and generates handsome brokerage by suggesting them to have position in the specified stock for short term. Later same research reports are made public using free media like news channels and financial websites to increase buyers and trading volumes. This gives an opportunity to their clients to exit from the stock and poor retail investors relying on these free research reports stuck buying the stock at higher price most of the times.  

We suggest all our readers to do ensure that free research reports available through financial websites, news channels should not be expensive for your investments.

Saral Gyan Capital Services is an Independent equity research firm and not a brokerage house, equity analysts at Saral Gyan publish unbiased and authentic research reports of small/micro cap and mid cap stocks under Hidden Gems and Value Picks services. We do not make our research reports public and share it with our paid subscribers only.

Our Services: Hidden Gems | Value Picks | 15% @ 90 DAYS | WEALTH-BUILDER

Posted by Saral Gyan at 2:15:00 PM
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Why to Avoid Free Stock Tips?

The stock markets are characterised by a constant hustle bustle. And if stock tips were rainfall, we would have enough of a deluge to drown the entire island city of Mumbai. They come from numerous sources. Through the talking heads on TV, ridiculous stock market games on business channels, magazines, newspapers, SMS, brokers' sales forces, ads and the list goes on. The average person having even the slightest interest in the stock markets is bombarded with stock tips all the time. 

Amongst all this noise, it is often difficult to keep track of who said what, and just how much actually came true. Over a long period of time, finding out which source of 'tips' have consistently lost investors money, and who those tips belonged to, can be next to impossible. There is no regulation governing this activity and no official record keeping.

This sorry state of affairs though is a huge opportunity for many. It creates a platform where almost anyone, no matter how clueless or unscrupulous, can come along and throw in a tip or two. And get away completely scot free, even if that tip turns out to be a disaster of a long term investment. And even more alarming, without any records of past performance, he can continue to do that over and over again without ever being held accountable. Bad advice very easily drowns away in the incessant noise of the markets. And so do the deeds of bad advisers.

As things stand today, probably the most important thing for an investor to do is to ascertain the credibility of his source of investment advice. And strictly keep away from those sources of tips that have no accountability whatsoever.

We have observed that many times investors simply invest relying on broker’s calls, tips over SMS, free tips floating in market by various media channels etc without evaluating the actual value behind the investment. Such investors simply ignore considering stock investment tools like EPS, PE ratio, PEG ratio, price to book value, ROE, ROA etc before making an investment decision.

It’s always advisable and recommended to go through the company’s fundamental before investing your hard earned money into stock market. Do go through reliable and authentic research reports to make an educated investment decision.

If you are a serious investor, you can subscribe to Hidden Gems & Value Picks, to make an educated investment backed by unbiased and sound research reports of micro, small and mid cap companies. Team of equity analysts at Saral Gyan, do review the companies performance covered under Hidden Gems & Value Picks on six monthly basis and update our investors to either hold the stock or to sell quantum of their holding to do partial profit booking.

Our Services: Hidden Gems | Value Picks | 15% @ 90 DAYS | WEALTH-BUILDER

Posted by Saral Gyan at 1:00:00 PM
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