The Tout Sheets: Part 1 - Investing (Canada): 03/09/1998

Let me start off this week with a warm welcome to the Mining Company's newest Guide in our Business and Finance hub. She is Keitha Campbell, owner of Independent Financial Planning in Ottawa, who is the Guide for the new Retirement Planning (Canada) site. She's a Certified Financial Planner and brings knowledge, excellent writing and a great sense of humour to her pages. Be sure to check it out!

Now about this week's feature. A Tout Sheet is generally thought of as a tabloid you can pick up at the race track telling which horse is likely to run the fastest. But it can be anything promoting the virtues of a particular investment. In this case, I am referring to websites that actively anlyze and recommend certain stocks. There are quite a few of them and I will look at two Canadian sites this week and in three weeks Part 2 will look at another Canadian and an American site.

Horse Trading on the Internet

The stock market intrigues us all. Who hasn't had the dream of being able to pick the next Microsoft or the next Intel before it becomes big? Who hasn't dreamed of investing a modest sum in some relatively unknown obscure stock and striking the motherlode? But then we remember Bre-X and realize investing in speculative ventures can lead to ruin if we're not careful.

There are several websites on the Internet that try and take some of the guess work out of stock picking. They research and analyze selected stocks and then post their "hot" picks online. Some have bulletin boards for aficionados to discuss their picks. Some send out regular newsletters keeping readers informed on updates and late breaking news. How good are they? What are their track records? How much stock (so to speak) can you put in their picks?

The standard rule, in this, as in all investing, is caveat emptor, buyer beware. Treat all you read with a grain of salt. Do your own due diligence and check out the reports you read for accuracy and timeliness. Think for yourself! Don't rely on others to do your thinking for you!

This said, the online Tout Sheets are still useful as a starting point, as a resource for bringing possible investments to your attention. Read the Touts. Consider their track record so far. Differentiate between speculative and value oriented approaches. And, depending on your temperament, act accordingly.

Two Canadian Sites

This week - two interesting Canadian sites for your consideration. In three weeks I'll look at two more sites, one Canadian and one American. The approaches taken by all these sites varies.

The Stockpage promotes itself as "an internet based newsletter profiling undiscovered and undervalued public companies whose stock we feel will at least double within 6 months". They use three criteria in picking their selections:

They profess to use a buy and hold strategy, picking undervalued stocks and holding them at least until the market catches up to the fundamentals.

Their current pick, selected in mid-February, is Rich Coast Inc. (KHRC/NASDAQ) because of its subsidiary Waste Reduction Systems. They believe the stock, which traded at $0.4375 on February 13, will reach $3 this year. It has traded as high as $0.81 and is currently trading at $0.625

Prior to this they selected Net 1 UEPS Technologies Inc. (NUEPS/OTC BB). Net 1, a South African company, developed the smart card technology which has now been licensed to VISA. The Stockpage recommended Net 1 at $12.50 a share and it went as high as $18 before settling to its current level of $16.00.

Prior to that The Stockpage recommended Sideware Software of Vancouver. Formerly called Jot-It Software, the company produces a computer version of the sticky note and has agreements with both Lotus and Digital. Price when first recommended by The Stockpage was $0.92 CDN. It's traded as high as $1.94 but has since dropped to $0.47. I can also tell you that Multiple Opportunities Fund (in which I own shares), used to have a stake in this stock.

The Stockpage has recommended other stocks, but these three are the only ones currently listed on its website. From their newsletters which I have been receiving since Oct. 17, I'ved compiled the following chart of their picks to date. Date means date recommended. Current prices listed are as of Mar. 6, 1998.

Company	Symbol	Date	Price	Target	High	Current
Skin Biology	VSE:SBI N:SKTGF	Oct. 17	$0.60	$2.50	$0.65	$0.13
Sideware Systems	VSE:JOT	n/a	$0.92	n/a	$1.94	$0.47
American Stone Industries	N:AMST	Oct. 3	~$5.00	$7.10	~$5.00	$2.00
Sidus Systems	TSE:SSM	Oct. 31	$4.00	$10.00	$4.50	$1.80
Net 1 UEPS	N:NUEP	Nov. 14	$12.50	n/a	$18.50	$16.00
Rich Coast	N:KRHC	Feb. 13	$0.4375	$3.00	$0.81	$0.625

Unlike the anonymous folks at The Stockpage, Bidding on Bay Street is edited by a New Brunswick resident with the interesting name of Laurel de Yturralde. Unfortunately, Miss de Yturralde updates her pages infrequently. The last update was Oct. 27. The update prior to that was August 19. While current information should be sought out as a matter of course, it is even more important to do so when the information on the website is quite old. You can, however, subscribe to her free newsletter for more regular updates.

Bidding on Bay Street, like The Stockpage, warns readers to exercise caution and prudence in investing. In particular the site states that "Bidding on Bay Street is not meant for traders & tries not to cross the fine line between providing information & 'hyping' stocks. We look for companies with good reasons to prosper & continue prospering over a period of several years "

They suggest using BBS as a starting point to gather information. And they advise that they will note when a stock discussed is more speculative, in which case they say, "the rule of thumb is to 'buy low or not at all' & 'take early profits' on any run-up, to protect initial capital."

This noted, let's look at a chart of their seven selected stocks and two recommended previously to see how they've done. For more information on the stocks, check out BBS's website.

Stock	Symbol	Date	Price	High	Current
InnoMat Solutions	C:INAT	May/97	$0.24	$0.39	$0.13
Environmental Remediation	N:ERHC	July/97	$1.62	$4.12	$1.50
Internet Liquidators	C:ILII	Aug./97	$0.95	$5.00	$3.75
Major Drilling	TSE:MDI	June/95	$6.00	$36.80	$14.50
Sharpe Resources	MSE:SHO	Aug./96	$0.48	$3.90	$1.01
Royal Standard Minerals	MSE:RSM	Aug./96	$0.85	$1.50	$0.35
Eastmain Resources	TSE:ER	Sept./96	$0.90	$1.14	$0.30
Goran Capital	TSE:GNC	Nov./96	$26.50	$55.00	$36.70
Newstar Resources	TSE:NER	June/97	$1.45	$7.65	$4.00

Looking at these two charts, it's clear that stock picking is a risky venture. Of The Stockpage's six listings, four are down from the price at which they were recommended and two are up. And of the four that are down, only one ever went significantly higher than the price at which recommended.

Bidding on Bay Street has a better track record with five of nine recommendations up and four down. Still, the record is only slightly better than 50%.

If I was inclined to pursue any of these investments, what would I do? Probably check out the ones that are down! If the fundamentals are as solid as the Tout Sheets seem to think, then they are selling at bargain prices. But frankly, such is not my inclination.

Links to Sites Mentioned

Disclaimer: As with all my columns here, I should re-iterate a precaution. I am not a professional financial advisor. I am a financial journalist and editorialist. The views in these columns are my personal opinions.

American Readers: Looking for a broker who can sell you Canadian stocks? One of my brokers is licensed to sell securities to Americans in 26 states. She works for Canaccord Capital which is an excellent company with a superb research department. They are particularly knowledgeable on resource issues. Send me a note if you want to get in touch with her.

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