Stock Market Gurus: Are They Necessary For You to Become a Better Trader?

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Here's a little secret. I used to be a "stock market guru." From the end of 1998 until the end of 2001, I ran a stock market newsletter that was pretty successful. I had hundreds upon hundreds of people paying me every month, and I had tens of thousands of dollars flowing in per month. At the end of 2001, with the popularity of my newsletter pretty much at its apex, I decided to pull the plug, and just focus on my own trading.

Some "gurus" out there I have respect for, some I don't. If anyone tells you that they are a wildly successful trader, but that they still want to charge you $30 per month to be a subscriber to their newsletter, you should take what they say with a grain of salt. Truly successful traders don't want to be tied down to anything, and they certainly don't want to give away their best secrets. The headaches and aggravations that come along with running a newsletter or chat room would prove to be too much for a successful trader, which is why you really need to question why a "guru" who claims to be successful would charge a monthly fee for their newsletter.

If they tell you that they aren't doing it for the money, then don't believe them. The fact of the matter is that most of these "gurus" make the majority of their incomes from their newsletter and/or chat rooms. Crack open their books and you would see that they aren't the successful traders that they claim to be. There are some exceptions, sure, but in most cases, they aren't nearly as successful as they claim to be. Take away their newsletter or chat room income and they are looking for a job.

The question is: do you need a guru in your life? My answer is, absolutely not. You have all of the tools and information at your disposal to become an outstanding investor. All you need to do is put the research in, and you will be rewarded. Read, read, and then read some more. Follow the markets. If you want to be a trader, then you need to watch stocks on a daily basis. Find a list of the biggest losers and winners on the Nasdaq and NYSE on a daily basis. Find out why they moved. Note their reaction to the news. Note analyst reactions to the news. Note other stocks in the sector and how they reacted to the company's news. Get a subscription to briefing.com. Read through it every day, and see which stocks moved and why. After a while, you will start to recognize patterns that repeat themselves over and over and over again in the stock market. That is what trading is all about, recognizing patterns and exploiting them for profit; you don't need to pay someone $100 a month to have them tell you that. You can become a great trader by yourself.

So put away that money that you were going to give to a guru, and invest in yourself. Buy a subscription to briefing.com and maybe WSJ.com. For all of your other information, Yahoo Finance will do you just fine. Immerse yourself in the stock market for a year, and by that time, you could be the one being called a "guru."
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