I thought you might find this very interesting. For many years I
have told others about the games that are played on Wall Street with
investor's money ! I have spoken to investors about how they must do
their own research and learn to think for themselves. After 18 years
as an analyst on Wall Street, stock analyst McClellan has written
a "tell-all" book revealing how analysts and corporate executives
are not the best sources for information about a company's health.
McClellan makes it clear his book is not for mutual fund investors,
but those who want to pick their own portfolio of individual stocks.
And by avoiding what Wall Street says, investors can find success by
doing their own research. "Full of Bull: Do What Wall Street Does,
Not What It Says, to Make Money in the Market." (FT Press, $22.99).
Too often, investors are misled by corporate spin and analyst views,
when instead they should tune out the noise and focus on finding
their own stocks that can provide yields for the long term. His
questions that stock buyers need to answer by doing their own
research include:

1. Is the company in a new or niche market? If it is, its growth can
be higher by being in the first stage of growth and not having much
competition.


2. Is the company's product or service specialized and simple? If
you can't understand what it does or sell, move on.


3. Is its revenue growth consistent?


4. Is its profit margin at the high end of its peers?


5. Does it have low debt? If debt is less than 20 percent of its
assets, it has a better chance of avoiding financial problems and
has the cash for growth.


6. Does it have strong management? Look for managers with a long
tenure and record of success.


7. Is its annual revenue in the $1 billion to $2 billion range?
McClellan believes that a company in this range is small enough to
still have growth ahead and at the same time making enough money to
support itself now.


8. Is it in a rising industry? Obviously, investing in a declining
industry is something to avoid.


9. Does it have a low price-to-earnings ratio? A common belief is
company stock with a high PEs can be overpriced. Under 20 is a good
rule of thumb.


10. Does it pay a dividend? McClellan prefers dividend-paying stock
as a sign of an established company and one that is stable.


11. Is the stock listed on the New York Stock Exchange? While not a
necessity if it meets most of the above criteria, a stock listed on
the NYSE is a sign of a more stable company.


12. Are the executives overpaid? Some of the worst companies have
overcompensated executives, which can indicate arrogance. Also watch
for backdating of stock options and lucrative severance packages.