Tread Warily on Media Stock Tips

This column was originally published on RealMoney on Sept. 23 at 12:47 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Often investors, both professional and amateur, will run across what seems like a great investment idea in the media and run to act on it. My advice is simple: Wait. For months, perhaps.

I'll lay out my approach to media touts, as well as a list of current stock tips, later on. But first, let's see how the market reacts to them.

Say that the idea is to go long on a stock. At the market open after the story appears, a rush of orders will push the stock's price higher. Then, as the day progresses, the stock will drop and end the day lower than at the open, but usually higher than the prior close....