Let's talk ancient microcomputer history. I've been covering investment software for Computer Currents since the early '80s when my machine of choice was a 48K Apple II with two 360K disk drives. I remember being bowled over by some of the great software of that era. No longer did I have to use a calculator to determine the value of my stock portfolio. All I had to do was go to the newspaper, look up each stock's price, and enter it into a portfolio management program.

Then there was my favorite Apple program: Standard & Poor's StockPak. Each month, I would get a dozen floppy disks in the mail that contained fundamental data (earnings, balance sheet, stock prices) on just about every traded stock. I could screen the database for stocks that met certain criteria, such as chemical manufacturers with no debt and increased earnings over the past five years. For each screening, all I had to do was read each of the 12 disks in succession and output the data to a scratch disk. Things might have been easier if I'd had one of those nifty 10-megabyte hard drives that were the size of an orange crate and cost thousands of dollars.

By today's standards these programs are primitive, but at the time, they put me light years ahead of most individual investors. And despite massive changes in technology since then, the premise remains the same: Successful stock market investors are informed investors. The more details you have about the stocks you're investing in and the better your tools for maintaining that knowledge and managing your portfolio, the better your chances of fattening your wallet.

But there's a new twist to the story: the Internet. The Internet evens the playing field among individual investors, institutional investors, and brokers by making relevant investment data available for free or for a nominal fee. This article will look at some ways you can use the Internet to your advantage, not only for gathering, managing, and analyzing stock market and related information, but for actually buying stocks online. What follows are sites we think are superior, although plenty of caveats are noted along the way.

DISCUSSION GROUPS

You are not alone. There are thousands of individual investors on the Net, eager to share investment tips. Discussion groups are found on major online services, at Web sites, and in Usenet newsgroups. The format is generally the same. Someone starts a topic; others who find it interesting add their two cents. Sometimes the discussions are intelligent and useful, sometimes they are inane, and sometimes they are sales pitches in the guise of unbiased opinion.

Whatever the forum, look for discussions that are moderated. For example, I'm the host of the Stock Market Conference on The Well (www.well.com). (This unpaid position compensates me with free connect time.) As moderator, I add new topics and keep the discussion on an even keel. I also make sure that nobody is selling services or touting a stock in which they have a vested interest. The result, thanks to the participants, is an intelligent and mutually beneficial discussion of the stock market and individual stocks. Recent topics have included networking stocks, LEAPS (long-term options), direct investment plans, and the oft-predicted stock market crash of 1997.

Since few Usenet investment newsgroups are moderated, you'll have to wade through the sex ads, spam, and hidden agendas to find useful information. Perhaps the best of the lot is misc.invest.stocks, which tends to discuss individual stocks and brokerage firms. For mutual funds, misc.invest.mutual-funds contains decent discussions of fund providers and investment strategies. Options investors should look at misc.invest.options, and technical investors (chart readers) should visit misc.invest.technical.

SOFTWARE

A few years ago, investment software was way overpriced. The rationale was that people investing in stocks have money; therefore, soak 'em. But with more investors entering the market and with the advent of the Internet, prices have tumbled. Today there's plenty of useful investment software for free or as shareware. Two clear winners in my book are StockTick and StockVue.

StockTick

There are tons of portfolio managers on the market. No longer do you have to enter current stock prices by hand or pay an online service a hefty fee to download stock prices. The new breed of portfolio managers goes out to the Internet, finds a free source of stock prices, and updates your portfolio automatically.

One of the best of these products is StockTick 3.0 for Windows 95/NT (www.naconsulting.com). This $24.95 shareware product lets you maintain an unlimited number of customizable portfolios. Besides calculating the usual profit-loss figures for your portfolio, reports can include information on an individual stock, such as its 52-week price range, PE ratio, and the day's percentage change in the stock's price. A stock ticker can run in the background updating prices during the day. If you invest overseas, the program can obtain price data from 40 different foreign exchanges. You can export portfolio data to other programs, including Quicken. There are some current weaknesses though. It's hard to get access to financial news without a lot of fiddling, and users can't maintain a portfolio history. The company promises to improve these shortcomings in the next version.

StockVue 2.0

In the 1996 Holiday Gift Guide issue of Computer Currents, I recommended StockVue, a well-designed commercial Windows 95 portfolio and stock price monitor. Since that time, the program has been improved. And best of all, the publisher, AlphaConnect (888/226-6398 or www.alphaconnect.com/stockvue/download.htm), now offers the program for free. This slick program will update up to eight portfolios. What sets StockVue apart is its access to a cornucopia of free financial data at the click of your mouse. You can get stock price charts, read the latest news on your stocks, and access a company's most recent SEC filings. If you leave StockVue running in the background, you can even get alerts (via email, fax, or pager) when a stock reaches a certain price, percentage change, or volume (although these notifications are delayed by 20 minutes). However, you can't customize StockVue's portfolio manager and you only get a handful of reports. But you can export portfolios to Quicken, Excel, 1-2-3, and other programs for heavy-duty manipulation.

THE WEB

The Web is a boon for investors. Here you'll find everything from stock prices to investment analysis to financial publications to contests. You have to pay for some services, but there are a lot of great free sites, too. Note: Some of these sites let you manage your portfolio and store the results-what you bought, what you paid, and other personal information-on the site. Most of these sites are not secure, so you may want to use them for theoretical portfolios (stocks you want to track).

Where to Begin: Collections of Links

If you're looking for a good starting place, go to a site with a well-edited selection of links. Your first stop should be Douglas Gerlach's Invest-O-Rama (www.investorama.com). Gerlach claims to have more than 4,300 annotated links in 60 categories, from stock investing and IPOs to futures and commodities exchanges.

Another good collection is the StreetEye Index (www.streeteye.com), which even links you to other pages of links. Special features include the ability to obtain five stock quotes at one time and a useful Java applet, the All Seeing Eye Research Robot, that searches the Web for information about a specific stock or a general topic. Unfortunately, each search launches another copy of your browser.

Novices will appreciate InvestorGuide (www.investorguide.com). Besides having a good collection of links (the international investing collection is especially strong), the site contains more than 1,000 FAQs on the basics of investing, a guide to analyzing a potential stock for investment, and a list of stock discussion groups on the Internet. You can also receive InvestorGuide's weekly newsletter via email, which contains a list of recommended stocks (caveat emptor) and Internet news of special interest to investors.

Other good sources of links include The Syndicate (go to www.moneypage.com hit Resources, then choose Brokers & Investing), the annotated lists of The Stock Club (www.stockclub.com/links.html), Wahoo! (www.io.com/~gibbonsb/wahoo.html), and Ohio State's Financial Data Finder (www.cob.ohio-state.edu/dept/fin/osudata.htm).

Researching a Company

Researching a company should go beyond reading its annual report. These glossy documents are filled with pictures of smiling customers and optimistic statements from management. The real scoop is found in reports the company must file with the SEC. For example, the proxy statement supplies details about major ownership and the salary and benefits the big cheeses get, and Form 10-K gives you detailed financial figures and unvarnished prose about the company and its competition. You can write the company for copies of these forms or you can download them the day they are filed. Just go to the SEC's EDGAR Web site (www.sec.gov/cgi-bin/srch-edgar). There aren't any fancy graphics here, and the search engine is crude, but the information is invaluable.

Partes Corporation, a distributor of financial data, enhances EDGAR filings at its FreeEDGAR Web site (www.freeedgar.com). The site not only offers access to the EDGAR database, it explains what the dozens of SEC forms mean. The site's search engine is certainly better than EDGAR's (you can search by stock symbol or by two letters of a company's name), and the company formats these bland documents so they're easier to read. One valuable free service is Watchlist. Whenever a company you follow files a new SEC form, you receive notice via email. And if you like to crunch numbers and compare stocks, Partes offers a free Excel 97 add-in that will plug balance sheet and other data right into your spreadsheet.

Citizen 1 offers a free Windows 95/NT stock research program called Citizen 1 Internet Tool at its Web site (www.citizen1.com). Enter a stock symbol and the program will search the Web for price charts, company profiles, and government filings. If there's a hit, one click will take you to the relevant Web page. The software will also search for general economic indicators, interest rates, and commodity prices. A Java applet is in the works that will make searches accessible for Macintosh and Windows 3.1 users.

Metastock has long been a leading stock charting program, and publisher Equis Software has just launched a Web site (www.equis.com/java) equipped with a Java applet that can generate similar stock charts. Type in the stock symbol, and the program fetches and charts the appropriate data. Unlike other charting sites, this one lets you customize charts by adding indicators such as moving averages, volume, and relative strength. Are you unsure what these indicators mean? There is an excellent online guide to help you. Do you want to see the details in a chart? Click a button to zoom in. What's up with a company? Click a button to get news (although it's often of the PR Newswire ilk). There are limits. Stock data only goes back about a year, you can't save the charts, and you can chart only one stock at a time.

In corporate America these days, having a Web presence is de rigueur, so don't forget to visit a company's Web site when doing research. At the very least you'll get an idea of how the company presents itself to the world. If the company is on the ball, you should have access to its financial and shareholder data. For example, IBM's site gives plenty of information about the company's products, but it also has valuable financial information (www.ibm.com/IBM/finance), including video clips and the transcript of IBM President Lou Gerstner's address to the annual shareholder's meeting. Even troubled Apple Computer offers plenty of financial data (www.apple.com/investor), including the current and past annual reports in Adobe Acrobat format. One of the best company sites I've seen is Safeguard Scientific's (www.safeguard.com). Safeguard is one of the few publicly traded venture capital companies. The site offers full information on the company, its activities, the companies in its portfolio (with links to each one), and the stock prices of Safeguard and all the stocks in its portfolio.

Financial Publications on the Web

Bloomberg is a major publisher of financial data, whose 78,000 data terminals are used by brokers worldwide. The company's media presence includes a financial radio station, a magazine, and a weekly television program. Bloomberg's Web site (www.bloomberg.com) brings some of its data to the general public. It offers real-time U.S. and world market stock indexes, daily reports ranking the top-performing mutual funds, and each day's big market movers. The news section is especially complete, with a good collection of major financial news, top financial stories from major foreign newspapers, and company news. Unfortunately, there is no search engine, so if you are looking for a story on a particular company or industry, you'll have to wade through a lot of material.

There's a link to live RealAudio broadcasts from Bloomberg's all-business New York radio station WBBR. You can also read articles from each issue of Bloomberg Personal Magazine. If you're a magazine subscriber, you get access to a special section that profiles most listed stocks, from company descriptions to balance sheets. The subscriber's section includes an excellent portfolio management application that not only tracks your gains and losses, but also charts price history and balance sheet data.

Of course, The Wall Street Journal and Barrons are essential reading. But their combined Web site (www.wsj.com) is perhaps less so. What do you get for your $49 per year ($29 if you're a print subscriber)? You can read all the articles from these publications and click links to financial data for all public companies mentioned in a piece. You can search back issues-but only 14 days back. You can search 3,600 other business publications, but you have to pay $2.95 for each article you read. (Headlines are free.) You can track up to 30 stocks in an online portfolio, but other sites do this better.

So why would you bother with this site? Well, you can create up to five folders on any stock or subject of interest, and relevant stories will automatically be funneled into these folders for you. Stay connected to the Internet and you'll get live headlines about those subjects as they're added to your folders. A click displays the complete story. You also get a company briefing book, which contains comprehensive information on most listed stocks, the company background, news, financials, and even earnings estimates.

A distant second to wsj.com is upstart Investor's Business Daily's site (www.investors.com), which offers selections from each day's newspaper. It's a worthwhile 5-to-10-minute read. There are no search engines, hyperlinks, or back issues. Also missing is the Daily's innovative stock price tables. But the site offers a decent (if self-serving) tutorial on basic investing.

Free Comprehensive Sites

The Daily Rocket (www.dailyrocket.com) tries to be irreverent and humorous but mostly falls flat, especially with its sophomoric RealAudio daily market summary. A better use of the technology would be a weekly interview with a market authority. Another weekly feature is a market strategy Q&A run by a market expert. The questions are good and so are the comprehensive answers. You'll find good moderated discussions on topics like the fate of Apple, networking stocks, and whether financial conglomerate Fidelity is headed for a fall. Topics are initiated by The Daily Rocket. Daily Rocket offers free Windows 95 software that can access data on the site without using a browser. Although the software runs in the background, it can flash major news and price changes.

Intuit's well-designed Web site, NETWorth (www.networth.quicken.com), is useful for both beginning and advanced investors. You can maintain up to 10 stock portfolios (that hold five stocks each) and download the portfolios directly into Quicken. Each stock in the portfolio has links to the latest news and analysis. Much of the news comes from BusinessWire and PR Newswire, and the analysis is drawn from Zacks Investment Research, an excellent compilation of earnings estimates from analysts. You can generate price charts for almost any time period you want and can compare the price fluctuations of two stocks or against market indicators. Charts can be saved in GIF format for later evaluation. Mutual fund investors will appreciate the listing of top performing mutual funds by category, from Latin American Stock to Mid-Cap Value. There is a small section for beginners on investing basics, but this area needs beefing up.

Researchmag.com (www.researchmag.com) offers both free and fee-based services. Many sites that offer both skimp on the freebies. Not Researchmag.com. For example, the site's search engine will comb through a stock and mutual fund database to find investments that meet your criteria. For example, tell it to "Find mutual funds that invest at least 70 percent of their funds in NASDAQ stocks, have had an annual return of greater than 25 percent over the past 12 months, and require a minimum investment of less than $500," and the site will display detailed information on each stock.

Portfolio analysis is also a major strength. You can analyze your portfolio by a variety of criteria and order the data as you see fit. For instance, you can rank your portfolio by return on equity or its current value versus a 52-week high. Other features include email reports, which alert you when a stock reaches a certain price, and a Java-enabled ticker tape.

Once the exclusive domain of America Online, The Motley Fool (www.fool.com) is now on the Internet. The Fools are two brothers whose commentary had a major effect on the price of several stocks, including Iomega's. This site is great for beginners, who will find a well-written guide to investing and a useful tutorial on the fundamentals of balance sheets. There's daily market news and reports on stock screens. But most people come to the Fools for their commentary, analysis, and investment advice. I love the Daily Double and the Daily Trouble. The Daily Double is an analysis of a stock that has doubled in value. Especially useful are the tips on how you could have picked this stock before it surged. The Daily Trouble offers similar analysis of stocks that have plummeted. The Fools offer sample portfolios (with up-to-date analysis of these stocks), and each week they post an abbreviated snapshot of an industry. (The full version is available via subscription.) To cap it off, there is an active set of message boards.

Commercial Sites

With so much free stuff on the Web, why pay? Paid sites offer more data, timeliness, and ease of access. Three sites meet these criteria in spades.

The Silicon Investor (www.techstocks.com, $75 lifetime membership with a two-week free trial) is a well-designed site dedicated to biotechnology, medical, and computer stocks. The site's selling point is the intelligent discussion by its subscribers. Stock charting is also a standout. You can chart up to seven stocks at once within almost any time period. Each stock is linked to charts, company links, fundamental financial data, competitors, news, SEC filings, and discussions about the stock on Silicon Investor's Web site. You'll also find detailed profiles of 408 high-tech stocks. The Silicon Investor's weakness is that it only covers the high-tech industry, yet it doesn't cover all high-tech stocks.

An emphasis on commentary and analysis is found at The Street (www.thestreet.com, $12.95 a month with a two-week free trial). The site's staff keeps a wary eye on Wall Street. The material is timely, and you get a sharp, insightful newsletter in your emailbox each morning. I especially enjoy James Cramer's cynical daily column on trends, overpriced stock, and market news. You'll also find daily reports on the market's action and a summary at the close of market.

You can maintain portfolios of unlimited size and gain easy access to SEC filings via The Street's well-designed search engine. Mutual fund coverage is especially strong, with a weekly list of the top ten performing funds in a variety of areas (sector funds, fixed income, global). Another useful feature is the site's list of guests on daily cable and network financial shows. The Street monitors what these gurus say and how well they've done in the past. (The Street reports on its own performance as well.) The site is strong on commentary, but its user conference forum is currently out of service. The company promises to revive it.

Quote.com (www.quote.com) offers freebies such as noncustomizable charts, news headlines, and limited balance sheet data and quotes. But if you become a subscriber ($9.95 to $99.95 a month, two-week free trial), the site becomes indispensable. Quote.com's best feature is its portfolio tracking. For $24.95 a month, you can maintain up to four stock portfolios containing 50 stocks each. Specify a target price for a stock, and when it hits that price, you'll be informed via email. When news breaks on a stock in your portfolio, the article will arrive by email. And I'm not just talking press releases. Quote.com also finds hard news from sources such as Dow Jones, the Associated Press, Investor's Business Daily, regional business publications, and the PBS Nightly Business Report. You'll get email reports on insider trading and SEC filings. At the end of the day, you'll receive a portfolio report in your choice of format, including Quicken, tabular, or comma delimited. When you visit the site, a Java applet can update your portfolios on the spot. The site also offers access to valuable data sources, including Zacks and First Call earnings estimates, Vickers Inside Trading Reports, historic price data (essential for stock-charting software), customizable stock charts, and annual reports by mail. As you might guess, $9.95 subscribers have access to fewer data sources; $99.95 subscribers have more.

Fun and Games

Not all the investment sites on the Web are deadly serious. If you want to show your investment prowess without losing a cent of your own money, enter one of the many portfolio contests on the Web. You will be given virtual dollars to invest in real stocks and will be pitted against investors from all over the world. Some of the better sites include the elaborate Final Bell (www.sandbox.net/finalbell/pub-doc/home.html); Investor Guide HedgeHog Competition (www.marketplayer.com/sponsor/investorguide) with its own set of market indicators; and for worldwide investing, Global Strategist (www.global-strategist.com).

IN THE MAIL

The Web is a great source for financial information, but if you don't have easy access to the Web, two services can fetch stock news and prices via email.

InfoBeat (www.infobeat.com) is a free, advertiser-supported service that can email you a variety of investment news reports. These include closing prices and news on stocks that you specify (up to three portfolios); market reports during the day; and news on commodities, currency rates, and business activity on the Internet. The ads that accompany the reports are unobtrusive, and I haven't received any junk email associated with InfoBeat yet. You set up your portfolio and maintain your preferences at InfoBeat's site.

Farcast (www.farcast.com) is a commercial service with a different approach. For $9.95 a month (two-week free trial), you can receive news on any stock via email plus company or industry updates from AP, Hoover's, and other business sources. Reports can be sent every hour, and you can email Farcast any time to get a stock's current price. You set up requests for information via email using a simple form. Farcast can send you a variety of closing stock reports including big movers, indices, and general news. Farcast maintains a database of press releases from PR Newswire and Business Wire. They organize these reports by industry and maintain a separate listing of press releases on mergers and dividends. Choose your industries, and a list of summaries is sent to you in several mailings during the day. Simply check the ones you want, send it back, and the full press releases will arrive a few minutes later.

BUYING STOCKS ONLINE

In early 1983 I logged into CompuServe and found Max Ule, perhaps the first registered stock broker to trade online. I placed an order for 100 shares of MSI Data at $20 a share. A few minutes later, Max called to tell me the transaction went through. My reward for trading online was a 20 percent discount on the commission. But the difference was a mere $1.60. And since my regular discount broker was just a phone call away, I could have used him and avoided CompuServe's connect charges.

I didn't trade online again for 14 years. How things have changed! Today, most online trades are easily and cheaply transacted at brokers' secure Web sites. Some use dedicated trading software. (Either way, you'll have to set up a minimum account balance of several thousand dollars or pledge to pay within three days.) Remember: If you trade online, there is no handholding. Nobody will offer suggestions or tell you you're making a boneheaded (or brilliant) move.

A recent Barrons article rated online brokers on ease of use, reliability, range of offerings, research, and commissions. Topping the list was Lombard (www.lombard.com), followed closely by Waterhouse (www.waterhouse.com) and E*Trade (www.etrade.com).

I have been trading at Waterhouse's secure Web site since earlier this year and I've been pleased. One big draw is the small commission. Waterhouse charges only $12 for any trade up to 5,000 shares. The downside is that the company locks you into online trading. If you trade via phone once you've opted for online trading, commissions are higher than normal.

Placing an order is as simple as filling out a straightforward form. Submit your order and you're given a confirmation number. Trades are not instantaneous, but I have generally received a confirmation phone call within the hour. During peak trading times, the site is far too slow. One day I couldn't access the trading module. I called technical support; they took my order over the phone and charged me the online rate.

Another plus with online trading is instant access to your account information, including a list of trades, holdings, and up-to-date account balances. Like most online brokers, Waterhouse offers customers free research services. You can get real-time stock quotes (100 for each stock trade), earnings estimates and analyst recommendations from Zacks Research, Standard and Poor's stock reports, and access to news and charts. You can also track up to 10 stocks in a separate portfolio with links to news and fundamentals.

THE BOTTOM LINE

Years ago, the wizards of Wall Street supposedly got together to learn the secret to eternal riches in the stock market. They connected all their mainframes and pumped in every bit of stock market data available. The mainframes churned and churned and finally spit out the secret: "Buy low. Sell high."

Now that you know the secret, there are still some slight problems. What do you buy? When do you sell? The Internet has become an essential tool for any serious investor. The information you'll find there will keep you informed, let you evaluate investments, and track the prices of stocks you own or are considering purchasing.

Keep in mind that much of what passes for news is nothing but a company press release. Look for sites and services that go beyond BusinessWire and PR Newswire. If you like discussions, you might want to spend time at sites such as the Motley Fool or Silicon Investor that have active discussion groups. If you live and die by email, Quote.com might be your ticket.

Whatever your source, playing the market requires time and attention. If you can't spare either, you're better off keeping your money in a mattress or turning over your hard-earned cash to a commission-hungry broker. But if you decide to take control over your own investments, the rewards can be great, both financially and intellectually.

© 1997 Saul Feldman. All rights reserved.

Saul Feldman has been an active investor and a computer journalist since Microsoft sold for a dollar a share. You can reach him at sfeldman@sirius.com or care of Computer Currents.