As Web Levels the Playing Field, a Step-by-Step Tour of One Site

If you wanted a market price for your stock, you had to call your broker or hang out in a brokerage office, where you could watch the ticker--an electronic message board that reports trades a few minutes after they happen. When you wanted to buy or sell stock, you called your broker too, and you expected trades to cost from $100 to $500 in commission. A few days or a week later, you'd get a written statement that showed how much you paid--or got--for your stock.

These days, Takeda can get earnings releases in real time and real detail the moment they're complete, and so can virtually any investor with a computer.

Want a current market price? You can have it with a few keystrokes. To trade, all you need is a computer, an account and a modem. Those costly trading commissions have shrunk to $8 to $30, often confirmed before you sign off.

"The playing field is getting leveled because the individual investor can see the information as quickly as we do," says Takeda, vice president of securities research and economics at Merrill Lynch & Co. in New York. "We all have access to the same information. The challenge is to figure out how to use all that information effectively."

Where do you go online to get company information and research? Dozens of sites offer everything from companies' annual reports to detailed technical analysis of individual stocks.

For the Net neophyte, here is a tour of one site that can be a useful place to start: Yahoo's finance channel.

If you type http://finance.yahoo.com, you'll arrive at a site that asks you to feed in ticker symbols, the market abbreviations that are used when buying and selling stocks and mutual funds through an exchange.

Don't know the ticker? To the right of the window is a button called "symbol look-up." Click on it and then type the name of the company you want. If you have a full company name, and you've spelled it correctly, you'll get the symbol. If you've typed a partial name and there are several possibilities, you'll get a list. Scroll down the list and click on the company you want.

Let's say you want to know about IBM. You click on "symbol look-up" and type IBM in the box. The response is a list of about a dozen symbols, many of which refer to IBM's preferred shares. You want the common shares, so you scroll down until you get to the simple "International Business Machines Corp." listing. The symbol turns out to be predictable: IBM. Click on it.

The next screen gives you a detailed look at IBM's daily trading activity, including the number of shares that exchanged hands that day, the normal trading volume, the 52-week high and low, the company's earnings per share, price-to-earnings ratio, dividends, dividend yield, and a chart that can be modified to show short- or longer-term trend lines.

If you had done this May 13, for example, you would have seen that IBM's stock soared $20, closing at an all-time high of $246 on twice the normal trading volume--a hint that something was up. If you click on "news," the site brings up recent headlines. Click again on any story you want to read in full.

In IBM's case, that day's news revealed that Chairman Louis Gerstner said there was pent-up demand for the company's products because of rising acceptance of the Web. Gerstner isn't usually so positive, so the market reacted strongly.

But let's say you want to know more. What were the company's most recent earnings? Are company executives buying or selling IBM stock? What do securities analysts think of IBM? It's all there, with a few more keystrokes.

Go back to the page with the IBM chart, and click on "research." This gives you an analysts' consensus rating that ranks the company on a scale of 1 to 5, with 1 meaning "strong buy" and 5 meaning "strong sell." In a series of charts, this screen shows how many analysts are recommending the stock as a strong buy, a buy, a hold and a sell. Analysts rarely say "sell," so anything neutral is considered relatively negative. In this case, IBM gets high marks from the bulk of analysts.

Hit the "back" icon again to return to the IBM chart, where there's another option called "profile." This takes you to a page that includes a brief company description, the names of top executives, a chart with pertinent earnings and cash flow data, and a lineup of links labeled "company news," "upgrade/downgrade history," "latest stock price," "insider trades," "SEC filings," "investor relations" and "message board."

The message board is where a host of people--many of whom know less about IBM than you--tout or trash the company's stock. Consider this the electronic equivalent of cocktail party chatter.

If you feel nosy, read it. But when you're considering an investment, ignore it.

You already know the company news, as well as the stock price trend and the analysts' views of IBM.

The insider trading history can give you a hint of how well company executives like the stock. However, because many executives receive discounted shares as part of their compensation packages, you should expect there to be more insider sales than purchases.

The chart will show how shares were bought--in other words, whether they were acquired though the exercise of employee stock options or on the open market--and sold. Many analysts see open-market purchases as the most positive insider move. They can also be useful in tracking how many shares top officers continue to hold and whether, over time, they're adding to their holdings or divesting themselves of the stock.

For in-depth earnings data, go back to the profile page and click on "SEC filings." There you can read everything from the company's latest annual and quarterly reports to its proxy statement, which details how officers are paid and what outside business relationships the company has with its directors.

The profile page also allows you to hook directly into IBM's own site, where you can learn about the company's history, its top officers, its financial results and employment opportunities. Want to read a recent press release? Click on "news."

"It's all there," Takeda says. "Most analysts are using the Internet as a very useful source of information these days. And, what we're looking at is virtually all the same information that you are seeing on Yahoo."

Online Resources

Looking for sources of information on stocks, mutual funds and other investments, or an inexpensive place to set up an online trading account? Here are a few sites to check out:

* * * Informational sites

* Cyberinvest: http://www.cyberinvest.com is a friendly super-site that acts as a guide to other sites. Its "cool tools" feature tells you where you can find online calculators, tutorials and technical analysis. The site also has links to hundreds of other Web pages.

* Individual Investor: http://www.iionline.com caters to investors in small-company stocks. It offers news and information as well as a "stock of the day."

* Go2Net: http://www.stocksite.com offers a daily newsletter and a personalized "ticker," where you can watch your stocks' latest trades.

* Smart Money: http://www.smartmoney.com, the online version of Smart Money magazine, has a "portfolio tracker" that enables you to plug in your holdings, initial purchase price, trading commissions and other factors and get an update on what your portfolio is worth and how much you've gained or lost. The site's written features also are among the best.

* * * Discount online brokers

A sampling of discount online brokers, and their per-trade commission prices:

* Suretrade: http://www.suretrade.com (Commission: $7.95)

* Ameritrade: http://www.ameritrade.com ($8)

* Datek Online: http://www.datek.com ($9.99)

* Discover Brokerage Direct: http://www.discoverbrokerage.com ($14.95)

* E-Trade: http://www.etrade.com ($14.95)

Note: Commissions are generally higher when trading by phone.

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