The Best Market Newsletters

OVER 350 newsletters claim to tell you which stocks to buy to make money, and the editors of some of them have done amazingly well over long periods. But such advice does not come cheaply. Newsletters typically cost about $150 a year, though the cost ranges from $18 to $895 or more.

If you don't know much about the market and have a few hundred or few thousand dollars to invest, you might be better off letting mutual funds manage your money. But a good service might be helpful if you have, say, $15,000 to invest.

Of course, many newsletters also have done poorly. Almost anyone can do some research and put one out. The Supreme Court has ruled that newsletter publishers no longer must register with the Securities and Exchange Commission as investment advisers. They can publish anything as long as it is not misleading or fraudulent information. In fact, the publishers have included high school dropouts, an electrician and a hairdresser. Some of the investment services are addicted to self congratulation, often making ambiguous forecasts and then boasting that they have been "right on target." Published performance records often overstate gains and understate losses because they don't take buying and selling commissions into account. For example, if a service advises buying a stock at $ 10 and then decides it should be sold at $11, the service credits itself with a 10% gain. After brokerage commissions on a trade of 100 shares, the investor's real gain might be closer to 3%.

Thus, the need for weeding the good newsletters from the rotten is more important than ever. To find the best, you can read services that keep score on them. The Hulbert Financial Digest (316 Commerce Street, Alexandria, Virginia 22314; $37.50 for a five month trial) rates about 125 advisory services on their performance. Another service, Timer Digest (P.O. Box 1688, Greenwich, Connecticut 068367700; $175 for 18 issues every three weeks or $95 for nine issues), monitors 85 newsletters that claim to call the major turning points in the market and reports on the 10 best. These publishers may give you a free copy if you call or write, or you can probably see a copy for free at a stockbroker's office.

It's wise to sample as many advisory services as you can before committing yourself. Most offer a one to six month trial subscription for a low price, and some will send you a sample copy at no charge. The best way of getting to know a variety of services is to write for the free catalogue published by Select Information Exchange (2315 Broadway, New York, New York 10024). It describes hundreds of services and offers a trial subscription to 20 of your choice for $11.95.

The major advisory services that focus mainly on fundamentals often are the most useful. They provide earnings estimates, industry and company analyses, investment strategies, stock recommendations and model portfolios a package of investment materials that you cannot find assembled elsewhere in one place.

One of the largest advisory services is The Value Line Investment Survey (711 Third Avenue, New York, New York 10017). This weekly service costs $495 a year, or you can try 10 issues for $60. For those who learn to use the vast amount of information and guidance it offers, Value Line can be very valuable. Every week its staff of 100 analysts, economists and statisticians evaluate 1,700 stocks. Each issue also includes a comprehensive overview of the market.

Another major service is The Outlook, published weekly by Standard & Poor's Corporation (25 Broadway, New York, New York 10004) for $255 a year; a 12 week trial subscription costs $29.95. The Outlook is cautious. It's easy to read and digest, does not encourage taking great risks and is backed by the large analytical staff of Standard & Poor's. It lists the best and worst acting stock groups and gives a weekly updating on some 800 issues with recommendations for buying or selling graded on year ahead appreciation potential.

For a quick scan of economic and market indicators plus computer based forecasts and lots more, a popular publication is the twice monthly Market Logic (3471 North Federal Highway, Fort Lauderdale, Florida 33306; $95 a year). It counsels subscribers on almost every aspect of investing, from stocks and mutual funds to options and gold.

Charles Allmon, noted for finding growth stocks ahead of the crowd, publishes the twice monthly Growth Stock Outlook (4405 East West Highway, Suite 305, Bethesda, Maryland 20814; $175 a year). His is one of a handful of publications whose recommended stocks Finally, the Dick Davis Digest (899 West Cypress Road, Fort Lauderdale, Florida 33309; $120 a year) reprints excerpts, including specific recommendations, from 400 market letters.

Beyond looking into the advisory services, you would profit from reading several books on investment. A pair of classics are The Intelligent Investor by Benjamin Graham and The Battle for Investment Survival by Gerald M. Loeb (no kin, incidentally). A modern com¬ pinion to these is Gaining on the Market by Charles Rolo and Robert Klein.

Also for information on specific stocks, you can call almost any corporation's shareholder relations department for information. Request the annual report, the 10 K form that public corporations file with the Securities and Exchange Commission, all recent corporate reports to shareholders and transcripts of presentations the firm has made to brokerage societies or analysts' groups.