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From: "G Stolwyk" <>
Date: Tue, 26 Dec 2000 13:37:57 +1300

In our entry of Dec 23, we referred to the advice given by brokers through their advisors. This is based on research done by themselves, bought in, or-in some cases-'borrowed'.
H:Unfortunately, some excellent companies may be 'overlooked' for a variety of reasons: if a broker has a company 'A' as a client-and declares accordingly- then he may not necessarily recommend an investment in a competitor of 'A'
Thus, there may be a Buy on 'A' and a Hold on the other one; or, the other one may not be mentioned at all!
On the other hand, he could claim that he does not 'cover' the competitor! That could be true, because another broker may have the company as a client! 
G: In this case, the well informed advisor, working in a high-pressure environment, may well have a problem with recommending 'A' if he thinks that the competitor is a better company. However, one would hope that a senior advisor has a greater choice of recommendations to make.
H:There may be a number of variants of this theme and a novice investor, thinking that he/she gets excellent advice, could miss out.
Often, a share price suffers because no broker is representing the company! 
What about the brokers who kept recommending 'doom stocks'(a new expression)  when the boom was on? I think that they would have lost quite a few commissions-and investments-had they done otherwise!
Then, we had the broker who had 'a bob each way.' He would say that there was not much upside left on the boom stocks. At the same time he would aggressively recommend some of them. This also happened in 1987!
The attitude from-and service given by- some brokers have improved over time, though!
G: Some unit trust managers were loathe to disclose 'hidden' fees and it took quite some time before the investor heard about them. We already discussed the -in my opinion-misuse of average and compound returns: refer to my entry of Dec19.
H:How do you use any recommendations?
G: The routine stuff arrives too late most of the time to be of any use and is ignored. Over the years, I learned something about companies and therefore am only interested in a few recommendations.
As I tend to be a long term investor, any selected company will need to pass stringent tests! 
I then file the remaining data in a folder. Over time, few selections will be acted on! 
H:A friend of mine checks any remaining recommendations on the web site and compares these with alternative companies. He then enters the selected companies-with the vital data-alphabetically on a spread sheet as a back-up.
He then deletes or adds to, when necessary.  He just deleted a whole lot of 'communication' companies and threw away the stored paper!
He tends to do his own research as well, though.
G: I need to know something about companies as my friends tend to discuss ' financials' and sometimes want to know my opinion for what it is worth. 
H: I do the study myself; this Sharechat site has a lot of links to various sources of data and its own NetBroker will do the transactions at much less cost!  

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