Investors Business Daily review
Investor's Business Daily
(IBD) is a newspaper that was started in 1984 by William O'Neil. He founded the newspaper in 1984 to "offer information not available in The Wall Street Journal and other publications" for "investors and business executives who did not have time for two and three section papers each day." In other words, no fluff.
IBD is a pretty slim paper, having 2 sections with each being about 14 pages: The first section is their business/market news/articles section where each page has its own topic. The topics are: "To the Point" (news snippets), "Leaders & Success", "Internet & Technology", "The New America" (news on up-and-coming companies and IPOís), "Mutual Funds", and "Issues and Insights" (editorials and political crap).
The second section is where the market stats and stock tables are. One of the trademarks of IBD is the unique statistics they give on each stock (like Relative Strength, EPS ranking, and Industry Relative Strength).
Like the WSJ, IBD seems to have gotten a little smaller over the years. This isn't bad because I appreciate concentrated information.
IBD tries to be in tune with what information investors need. One of their taglines a few years ago was "Investor's Business Daily - Donít Read it. Use it." This is notable because one of the tell-tale signs of an investing publication that won't make you money is one that talks about companies but never talks about actual stocks. This is what the Wall Street Journal does. IBD, on the other hand, will talk about which stocks have the biggest increase in volume and which stocks have the highest relative strength. So IBD is a tool that is actually used
instead of something that is just read.
I first got IBD back in 1993. I only got it for a year because I traded only futures and no stocks for my first few years. It is one of the most unique publications out there and is also not overrun by ads. It is on the expensive side so it's not the kind of paper you subscribe to casually - not to mention the fact that the Monday Special (their weekend edition) is sold separately.
Another reason I stopped getting IBD is because I consider IBD to be a newspaper specifically aimed at investors using the CANSLIM method and my investing style is the opposite of the CANSLIM method (although I do recommend it). So if you are deciding whether or not to subscribe to IBD you may want to consider whether or not your investment techniques are similar to the CANSLIM method (buying stocks that have a high Relative Strength and Earnings Ranking). If not then the two or three good analytical articles each day are probably not worth the price. And even if you are a CANSLIM investor then it would probably make more sense to use one of IBDs tools or a third-party program to scan for the criteria you are looking for.
How to use Investor's Business Daily
- Section A. Scan the front page for readable articles and then scan pages 1 & 2 for little news snippets of interest.
- Check out the 'Technology' and 'New America' pages to see useful profiles on new technologies and up-and-coming companies.
- Skip the mutual fund and 'Insight & Opinion' pages.
- Section A also has a 'Weekly Review' section with charts of stocks which meet IBD's buy criteria. If you are a CANSLIM investor (or use some of the same criteria) then this section is very useful as it allows you to scan 100 stock charts really quickly. My trading techniques are not similar to CANSLIM but one thing the charts have that I love is a nice 1-line description of what the company does right above the chart. This is not a bad way to simply get introduced to certain stocks you never heard of. One thing to note about the charts is that many of the stocks will be concentrated within the best-performing industries. For example, if oil is going through the roof then 50% or more of the charts shown may be oil drillers. So if the current hot industries are industries that don't appeal to you then keep in mind that they'll be fewer stocks that interest you.
- Section B. There are more charts. My advice is the same as above.
- The back page of section B is the "Investor's Education" page which gives some nice helpful hints in the form of real-world case studies of stock charts to improve your trading techniques. These can be valuable to newbies but after a few years of trading these hints tend to the kind of stuff you already know (wait for a retracement to buy after a breakout, watch volume on breakouts, etc.).