LAS VEGAS -- If you've ever attended a
investors' conference, you know it's more sales pitch than education. But amid the cornucopia of booths, tote bags and khaki-clad company reps, some valuable insights and tips do emerge. Here are some observations from this week's show.
If you're an investor who trades through a conventional online broker, a whirl through the Money Show would leave you feeling decidedly uncool. Sure, a few online brokers like
showed up. But that's not where the action was. This show was all about Level II
quotes, tick-by-tick charting, options montage display with greeks, limit alerts via cell phone and the ultimate: intelligent order routing.
Companies with names that all sound the same,
, held court. (In fairness, Fido's booth had some buzz with its InstantBroker trade-via-pager gizmo.) These trading/data firms showed off vibrant, multicolored screens split eight ways between bid-and-ask lists and candlesticks. While the trained eye might appreciate the differences, to the old-school investor they all look pretty much the same.
But that's not to say that they're unimportant. To the contrary, these services herald good things for all online investors, even the fuddy-duddies. Think of it as the food chain effect. Until recently, these kinds of toolboxes were accessible only to professional investors with black-box technology on the company's expense account. Now they've migrated to ultra-active individual investors. Soon enough, ever-savvy standard online brokerage customers will realize that they too could benefit from these services now aimed at daytraders.
An example: "smart" or "intelligent" executions. Cybercorp and Tradescape are two firms that are said to get their customers better executions because they don't sell their orders to other firms to process. Rather, their execution systems bypass the broker and look for the best price among exchanges and electronic communications networks, or ECNs. The customer pays for this kind of service, but the theory is that ultimately it pays for itself in better executions.
Now, if these features follow the trend of all things online, the pressure will be on the online brokers to give their customers the better deal. "Even long-term buy-and-holders can benefit from a good purchase price," says Mark Ingebretsen, a writer for
and a panelist at the show. Ingebretsen predicts that either daytrading firms will create a simpler version of their interfaces for the broader market or that the major brokerages will offer some of the fancier features directly.
is already on its way, having recently acquired Cybercorp.
For more developments in this area, see one of Ingebretsen's recent
Tools of the Trade columns.
Some good suggestions from Jeremy Pink, editor-in-chief of
, as well as Ingebretsen, on sites for the international investor:
ADR.com: Pink recommends this free site run by
J.P. Morgan (JPM) - Get Report for folks interested in ADRs, or American Depositary Receipts, which allow investors to trade shares of foreign companies on U.S. exchanges. The site explains the different types of ADRs and which ones are liquid enough to be sensible investments for individuals. It also has a good screener.
Worldlyinvestor.com: Another good ADR screener, according to Pink. (Permit him the promotional plug.)
Intltrader.com: This site doesn't limit itself to ADRs but enables trading in other foreign stocks. A good place to expand your proverbial universe.
Standard online brokers: While brokers, Pink says, are prohibited from
soliciting your business in overseas trading, if you ask for specific stocks they actually can place those trades for you, says Pink. He mentioned E*Trade and Schwab as folks who would oblige. Anyone have any experience to share on that score?
Let us know.
Local brokerages in foreign countries: Pink says to check out
Boom Securities to trade local shares in Asia. (
Caveat emptor: You can face some serious currency and liquidity risk.)
Interactivebrokers.com: Said to be a way to play foreign exchanges for the super-sophisticated investor.
Closed-end funds: A bet on an individual country, with active management. (For more on closed-end funds, see our
On comparison shopping: Ingebretsen likes
youdecide.com for everything from home equity loans to auto finance. ... Jeffrey T. Seely, chief executive officer of
and a former veteran of several Wall Street firms, makes this point on initial public offerings: If they're hot, there are never enough shares to satisfy the institutional demand. If they're not, there's plenty to dump into the lap of retail investors. ... And for bond trading, Seely says to keep an eye on
espeed.com. Today it's institutional. But tomorrow?... In the never-ending search for the quote service that's just right, Ingebretsen points to
money.net -- more than your average quote fare but not as costly or detailed as Level II. For convertibles, try Morgan Stanley Dean Witter's
convertbonds.com. It's a paid site, but you can sample two weeks free. And Pink's tip on mutual funds: Check out writer Andrew Tobias's site,
www.andrewtobias.com. You can't predict performance but you can measure costs, which is what this site does.
Agree, disagree or care to amplify on anything in this story?
Let us know, and perhaps we'll do a follow-up column.