Stock Pick Services, Scams or Not?

[aiki14]

I am going to make the case for scam. I am not going to pick on any one since I believe they are all a waste of your money at best and an out and out criminal enterprise at worst.

My premise is as follows:

As "Pay for service" entities they are out to make money.
If you have a system that accurately predicts stock movements over time, the most profitable thing to do is invest your own money in those positions (think Buffett) or to actively manage other peoples money in the positions (think Hedge Funds) while keeping your methodology, and actual positions, a closely guarded secret.
If a company is clearly the former (pay for service), yet elects not to be the latter (most profitable), there must be a reason. The first and most obvious is that they do not possess a predictive methodology, and must therefore do something else to make money. Second, maybe they are just really nice people who want you to be rich.
Occams razor certainly hints at the answer.

When I get back in the states and have more time I will demonstrate how these entities appear to be successful, and why they are just a modified ponzi scheme that must at some point collapse under their own weight. A point of interest is how many of them have a multi year record of success.

I wonder if any of the folks who have given these companies their money will defend them on a motivational level. Explain where my premise is erroneous as opposed to saying they made X amount on this trade or that.

[Bman409]

I'd say that stock picking services are no more of a "scam" than financial planning services.


Same thing. Not everyone can be an expert in all fields.


Same thing with a show like Jim Cramer's Mad Money. What's the point of his show? Why doesn't he just go back to running a hedge fund. As you say, its would be more profitable.

The answer is because there are alot of regulations involved in running a hedge fund.

I think some people like to educate others, as well. If you think about it, the same thing could be said about anyone who writes a "how to" book.

[kingfisher]

Bman

From what I have experinced with Financial Planers is: They explain the choices, usally Mutual Funds in depth. The person still has to make there OWN Choice as to what they want to invest in if any. Compared to someone picking stocks and promising you huge gains. IMO the only sure Gain is for them with the cash you gave them!

[reef]

LOL, this will be an interesting thread. They are scams. Maybe a few lucky picks here and there but i would never trust it.

[Bman409]

Originally Posted by kingfisher

Bman

From what I have experinced with Financial Planers is: They explain the choices, usally Mutual Funds in depth. The person still has to make there OWN Choice as to what they want to invest in if any. Compared to someone picking stocks and promising you huge gains. IMO the only sure Gain is for them with the cash you gave them!

Well, if someone is offering you a SURE GAIN, its a scam

No matter what.

That's for sure.

I think of a stock picking service as what Jim Cramer does, or actually, what many of us do on this board.

It simply brings your attention to stocks that you might not know about

[netwrangler]

Of course paid stock-picking services are scams.

I worry about folks who steadfastly defend these services.

• Are they in league with the scams?
• Are they just naive?

Well, I guess it's possible to be both.

[Bman409]

Originally Posted by netwrangler

Of course paid stock-picking services are scams.

I worry about folks who steadfastly defend these services.

• Are they in league with the scams?
• Are they just naive?

Well, I guess it's possible to be both.

Well, I write a stock picking newsletter which I sell for a fee... so I'm clearly in league with them.. or at least I'm in league with my own service


Bman

[TonyM]

Originally Posted by Bman409

Well, I write a stock picking newsletter which I sell for a fee... so I'm clearly in league with them.. or at least I'm in league with my own service


Bman

This explains your bias on the subject. Now, the important difference (assuming there is one) between what you are doing and what the stock trading robot is doing, lies in how you advertise your newsletter and any promises made?

[netwrangler]

Originally Posted by Bman409

Well, I write a stock picking newsletter which I sell for a fee... so I'm clearly in league with them.. or at least I'm in league with my own service


Bman

Yup.

[kingfisher]

Originally Posted by Bman409

Well, I write a stock picking newsletter which I sell for a fee... so I'm clearly in league with them.. or at least I'm in league with my own service


Bman

I would like to see what Education Level you have and any other job experiance you have that makes you any different from the robot.




There is a Fool somewhere that parts with his money everyday!