Endless source of information

So, $$$ has been a personal obsession for a while now. Along the way, I have signed up for various newsletters, etc. Quite frankly, I have lost track on what I have signed up and what I have not. Also, from being registered as a stock trader in my previous life, I am sure I am on some sort of lists... Because I get a lot of random mails about trading and investing. Within the last 24 hours, I have received the following:

1. The Motley Fool's FoolWatch Weekly newsletter
2. Elite Stock-Market Advisory stock profile
3. SFO: Stock, Futures and Options Magazine

This list shows that there is virtually an endless source of information with regards to personal investing. But, be advised: not all information source is created the same.

1. The Motley Fool's newsletter
I am going to guess that at one point and time I have given Motley Fool (http://www.fool.com/) my email address. It is a website that is tailored to the average investors. You can find a lot of good information on this site. However, information sources such as this are not without their problems.

In the investing world, it is a popular to use history as an indication of future success. But history is exactly that: history. Too often at the beginning of a new year, such sources would provide a list of best performers from the prior year. However, what had happened in the prior year is unlikely going to happen this year. Thus seriously undermining the usefulness of such information.

For example, within this newsletter was an article about dividend paying stocks. I am a big fan of dividend paying stocks. Good downside hedge. However, searching for the right one is not always that easy. The newsletter highlighted Bank of America (NYSE: BAC). It highlighted many good reasons on why it would be a good investment. But interestingly, just today, a major piece of news surrounding Bank of America's purchase of the troubled mortgage lender Countrywide Financial (NYSE: CFC) changed everything.

So, the bottom line: I personally would never take these cookie cutter advice without a grain of salt. I generally appreciate the general information that they are able to provide, but I would rarely rely on such sources for specific investment advice.

2. Elite Stock-Market Advisory stock profile
The people at Fools.com is going to die when they see their newsletter mentioned along side with this one. This professional looking piece of newsletter arrived in my mailbox suggesting a specific stock that I could purchase for $2.00 and sell for $40. However, make sure you read the fine print: "This stock profile should be viewed as a paid advertisement..."

The bottom line: For most investments, if it appears to be too good to be true, it probably is.

This is a good point for me to familiarize the readers with a popular scam: Pump & Dump. If you have watched the movie "Boiler Room", you'd know what I am talking about. Apparently legit looking financial service professionals will try to pump up a stock. You become the buyer for a stock that they want to dump. However, after the originally owners finish selling their stock, they have no more reasons to keep the stock priced inflated, the price would likely fall. At this point, you may want to sell, but no one want to buy... If I am not clear, just go rent the movie ;)

3. SFO: Stock, Futures and Options Magazine
This magazine found its way into my mailbox, along with an offer for a free subscription. I found this self proclaimed "The Official Journal for Personal Investing" surprisingly informative. Though, I would say that the content is too sophisticated for your average investor. It is geared toward more active traders.

The bottom line: Free subscription to a source of information is never a bad thing. Just know that it is only one piece of information. You should view each piece of information with a critical eye, and never rely on a single source. Do your homework!

Disclaimer: Once again, this is a personal blog. Don't buy or sell stock names mentioned in this blog base on information provided here. Also, I am not qualified to judge the legimacy of the information sources.