Monday, September 12, 2005
Dealing With Disasters
IS THERE ANY WAY TO PREPARE your finances for the possibility of a disaster on the order of Hurricane Katrina? If you trade or bank online, or use a computer to track financial matters, you might want to think seriously about creating a disaster plan for your computer-based records—now—because information about brokerage and bank accounts, insurance policies and the like can get lost, along with personal effects. Yet most computer-users don’t get religious about creating backups until they lose some important files.
While backing up data used to be a somewhat onerous task, especially back in the day of the old 5¼-inch floppy disks, it now just takes some foresight.
If your computer has a DVD burner, you can quickly copy four to 8.5 gigabytes of data (including photos, e-mails, bookmarks, financial records, and more) onto a DVD.
You can also install a second hard disk in your computer relatively quickly, especially if you opt for an external drive, and just copy the entire contents of your computer’s primary drive onto that one.
One problem with planning what you’ll back up is the way most computers intermix data with program files on your computer’s hard disk. You can be vigilant and keep data separate from program files, and back up the data frequently, but frankly that takes more computer know-how than most people have. Plus there are some programs that crash if you don’t use their default data location.
Physical backups are great if, for instance, your computer gets a virus, or the main hard drive just plain crashes. But what if your house burns down or gets flooded? If you have an external hard drive, which typically is the size of a book, you could grab it and take it with you. If you had two internal hard drives in your computer, however, they would both be ruined simultaneously in the event of a disaster.
I’ve taken to using a Google e-mail (mail.google.com) account for backing up my more frequently changed files, by compressing an entire folder into a .ZIP file and mailing it to myself. This works great for things like my word-processing folders and my personal-finance data files. It’s cheap—free, actually—but it’s a little time-consuming. Plus there’s a limit of about 2.6 gigabytes (but growing daily) that I can store in one Google e-mail account. You can then access such files from any computer, via your Web-based e-mail.
You also can subscribe to online services that allow you to back up your data over an Internet connection to a computer located somewhere distant, so if disaster strikes your hometown, your files are safe.
The online-storage alternatives can automatically back up the files you designate to a remote location. These are handy, because once you set up the schedule, and keep your Internet connection up and running, the backups are automatic. You could, for instance, tell the service to back up the files you want at 2 a.m. every day. But don’t even consider using one of these unless you have a high-speed Internet connection. Initial backups of a couple of gigabytes can take six to 10 hours, even over a high-speed connection; I don’t even want to think about how long that would take over dial-up.
Windows users have a variety of online-backup choices. One of the more popular is Connected DataProtector (http://onlinebackup.connected.com), which is very easy to set up and use. First, you install a program called the DataProtector Agent on your computer. Run the program, and while following the prompts, tell it which folders and files you want backed up. The Agent will automatically do the backups at a specified time each day; it looks for files that have been created or changed since your last backup, and avoids storing duplicates.
Connected’s services include the ability to “roll back” your computer to a previous backup. Or you can have the service send you CDs with all your data, in case the computer you’ve been using is completely disabled. You’ll pay $165 per year to keep 2 gigabytes of data backed up; other plans that range from $80 to $800 a year for up to 30 gigabytes of data are available.
IBackup (http://www.ibackup.com) has backup plans for Macs and Linux-based computers, as well as those running Windows. This service is far more flexible than Connected’s, but the unfamiliar interface and multiplicity of options might take getting used to. be using the computer for a while. (You can perform most functions on your computer while the backup is running, but it will run much more slowly than usual.)
Another good insurance policy is to have more than one online-brokerage account, for those times when you can’t get through to one of your brokers, and a backup Internet access provider, for when your main connection goes haywire. Also, if you’ve got a high-speed Internet connection, it’s still a good idea to have dial-up access available, just in case.
Based on how we stretch PCs to their limits sometimes—say, during our annual review of online brokers—it’s not a bad idea to have more than one PC. Given that you can get a basic, if unexceptional, desktop for as little as $299, it’s inexpensive insurance if you’re actively trading a significant portfolio. Or with laptops going for as little as $500, one could serve as a backup if your main desktop fails or if you need to relocate on short notice.
Clarification: In our Aug. 29 column, “Read All About It,” we took a shortcut and referred to RealTick as an online broker, which is not an adequate description. RealTick is an independent market-data, analytics and direct-access trading platform—available globally through a variety of institutional and retail brokers. Through the RealTick interface, users can also route trades to multiple brokers. Many financial institutions offer customers RealTick in conjunction with other electronic-trading platforms.
Online Broker News: Schonfeld Group, a proprietary and retail trading and investment firm, has acquired the Electronic Trading Group, further consolidating the high-end active-trader market. The Schonfeld Group historically has served traders who use their offices, rather than traders who work remotely. This acquisition extends the firm’s presence in the remote-trading business.
The numbers are huge at this end of the business. ETG’s proprietary traders and retail-trading customers trade on average 5 million shares a day, one-third of which are traded remotely. Schonfeld Group trades approximately 140 to 150 million shares per day, or 2% to 4% of all listed and OTC volume. Once the deal is done, Schonfeld will be home to approximately 1,200 active traders, nearly half of whom are retail.
Published in Barron’s September 12, 2005
Monday, August 29, 2005
Read All About It
AS A NEWS JUNKIE, I THOUGHT I’D REACHED Nirvana a couple of years ago when I started playing around with Google news alerts. I happily set up several dozen news alerts, and when one of my search conditions got a hit, I’d get an e-mail with a link to the entire article.
Well, Google news alerts are still useful, but they’re so 2004.
One major drawback is that they depend on you checking—and reading—your e-mail to see what’s happening. They also poll only a few hundred news sources. What if you’ve become addicted to a variety of weblogs as well as financial news services? You could easily spend hours every day checking all the sites you’ve bookmarked.
Take it to the next level by setting up your own Really Simple Syndication news aggregator. RSS technology lets you consolidate your favorite online news and Web sources, such as trading and investment sites, newspaper, trade, magazine and corporate sites, as well as blogs and podcasts, into a single aggregated reader. This is done by subscribing to each site’s RSS feed.
Because RSS feeds deliver information directly to subscribers’ desktops—not via e-mail—they are secure and spam-proof. Assurance Systems recently reported that 22% of legitimate e-mail does not make it to the intended inbox, and found one Internet-service provider (ISP) that is blocking more than 36% of the opt-in messages, such as Google news alerts, entering its system. As the fight against spam intensifies, these false positives increasingly prevent critical information from reaching consumers. The only way to find them is to wade through your e-mail spam folder, which can be ugly.
If you bounce around a Website that includes news, you may see some boxes that say “XML” or “RSS”. Those boxes indicate content you can push to your computer using a newsreader, rather than having to find it yourself. If you click on one of those red or blue boxes, however, you’ll see a page full of what looks like gobbledygook. Each RSS feed is set up to send out a list of article titles with short synopses.
RSS aggregators, or newsreaders, deal with mountains of what appear to be arcane and unreadable pages filled with programming codes, and turn them into easily readable pages full of news headlines. Best of all, you can pick and choose from among the news items available and customize your own financial alerts.
The newsreader periodically checks each RSS channel, updates all recently published news and items, and displays the results. When a headline is of interest, you can click it and go directly to the source.
One of the easier news-syndication programs available is FeedDemon from Bradbury Software (http://www.feeddemon.com, $29.95 to register). The program has hundreds of news feeds built in, which you can customize so you’re not faced with stories about Britney Spears when you’d rather be reading about insider trading.
FeedDemon’s screen has a three-part layout that lets you skim through available articles quickly. On the left, you’ll see a list of Channel Groups, such as Business, Entertainment and Technology. Clicking on a group displays all the online publications, Websites and blogs that are available within that channel. Should you click on a particular link, the center pane will display all the headlines available. When you click on a headline, the content of the article is displayed in the right-hand pane.
Certain publications will allow only a paragraph or two from the article you want; with a click, you can open a new window that will take you to the originating Website and let you read the article there. FeedDemon also includes a search tool that looks for other news feeds that might interest you. You can try it for free for a limited time.
On Alex Barnett’s blog, there’s a terrific tutorial for using FeedDemon entitled “RSS 101.” Check it out at http://www.extremepodcasting.com/screencasts/usingrss101.htm. Barnett’s screencast, which will run automatically in your browser, describes how to set up an RSS feed very eloquently—turn up your speakers to hear him chat through the process in his charming British accent.
There are quite a few news readers available these days, but most seem to be geared toward the serious propeller-head.
Another popular news reader is NewzCrawler (http://www.newzcrawler.com), which looks like Microsoft Outlook Express. NewzCrawler lets you subscribe and check for updates on sites that do not (yet) supply their content in syndicated format, such as Barron’s Online (http://www.barrons.com). This program is not quite as easy to set up and use as FeedDemon, but it does let you view and participate in newsgroups. The most recent version, 1.8 RC2, is much more friendly than the version (1.7) you may find available around the Web, as it includes a tutorial and a Startup Wizard that helps you through the initial configuration. Newz-Crawler carries a registration fee of $25.
Recently released in the U.S., NewsInABox (http://www.newsinabox.com) has one of the easier methods for adding a newsfeed to your page—just click on the “XML” or “RSS” box on the Website with the feed you’d like to follow, then drag and drop it onto your NewsInABox page. Adding a feed to most other newsreaders involves, at the very least, copying and pasting a Web address. NewsInABox is $19.95.
You don’t have to pay to set up your own RSS newsfeeds however. Firefox browser users can integrate RSS feeds, though it’s not nearly as easy as using FeedDemon. You can set up a personal “My Yahoo” page, by bringing up http://www.yahoo.com and clicking on “My Yahoo” in the top left corner. This is also somewhat more tedious than FeedDemon, but it’s free.
Speaking of news for traders and investors, StreetInsider.com (http://www.streetinsider.com) recently remodeled its site. The basic content, available for free, offers reports, delayed by one hour, of fundamental events (such as earnings and management changes), as well as rumors, analyst ratings, insider trades, trader talk, mergers and acquisitions, and other items of interest to those in the market.
Premium members can get it all in real time, and have it displayed according to the category of the article. Members can receive e-mail alerts on stocks in their portfolio (StreetInsider reports, press releases, SEC filings) and can receive alerts on any of the 20-plus actionable trading categories. You can also view the reports published on StreetInsider in your RSS newsreader.
Online Broker Update: Townsend Analytics (http://www.taltrade.com) now offers a free RSS feed that alerts interested parties to important information from Townsend Analytics and its RealTick direct-access trading platform (http://www.realtick.com). As far as I can tell, it’s the first online broker to jump into this arena.
MBT Technologies, parent of MB Trading (http://www.mbtrading.com), is rolling out its direct-access currency- trading system, featuring its MBTX direct-access smart router. This will allow traders to bypass deal desks and connect directly with electronic liquidity pools and banks. MBT Technologies offers more than 20 currency-trading pairs, such as euro/dollar yen/dollar, British pound/dollar, to name a few. Starting August 30, traders will be able to open accounts for a minimum of $1,000 (it’s now $2,000), or sign up for a free live-data demo.
Published in Barron’s August 29, 2005
Monday, August 15, 2005
Lowering the Velvet Rope
DETERMINED NOT TO BE JUST A BRIDESMAID, E*Trade is hooking up with Harrisdirect. Ameritrade, of course, had previously turned down E*Trade’s overtures, and instead wound up marrying TD Waterhouse.
Both E*Trade and Ameritrade have been intent on bulking up to benefit from the economies of scale they can realize, given the excess capacity of online brokers. And Harrisdirect and TD Waterhouse, both units of big Canadian banks (Bank of Montreal and Toronto-Dominion, respectively), never achieved the size needed to make them competitive with their eventual merger partners, or other leaders such as Charles Schwab. Indeed, according to a research note from First Global, the operations of Harrisdirect were “more or less immaterial” to the bottom line of BMO. E*Trade, however, gets “the high-quality, affluent client base of Harrisdirect.”
Such customers—the sort reading this now—are the Holy Grail of mainstream online brokers, which seek to sell them an array of financial services. One way is to give breaks to the richest, most active clients. An example is Wells Fargo’s online brokerage firm, WellsTrade, which is connected to its banking site at http://www.wellsfargo.com. The site slashed its commissions for customers with a Wells Portfolio Management Account to zip for the top tier.
A PMA includes money-market interest rates, no-fee linked checking and savings accounts, a Wells Fargo credit card with no annual fee, free checks, free online banking and bill paying, overdraft protection and a combined statement that links all accounts.
Most brokers count only brokerage assets in determining the perks accorded to the biggest customers. Wells’ PMA takes into account bank checking and savings deposits, personal loans, credit balances, investments including individual retirement accounts—plus 10% of a mortgage balance with Wells. Counting a portion of your home loan, especially if you live in an expensive real-estate market, significantly lowers the bar for top-tier treatment.
PMA customers with more than $250,000 in total-relationship balances qualify for 50 commission-free online trades per year. Accounts with $100,000 to $250,000 get 50 online trades annually for $2.95 each. After those 50 online trades, it’s the same $9.95 commission paid by the hoi polloi with under $100,000 in balances in their PMA. More than 800 no-load, no-transaction-cost mutual funds also are available at all levels.
The Wells brokerage site is easy to use but somewhat spare in terms of amenities. In our annual review of online brokers ("Speed or Comfort?” March 7), it ranked near the bottom of our list; its formerly higher-than-average fees certainly hurt its ranking. But the new fee structure makes a WellsTrade account very attractive to a PMA customer with a large mortgage who wants to build long-term assets in a cost-efficient manner; for example, with regular purchases of exchange-traded funds.
Back to School: Three interesting resources for students of investing and trading hit my desk this week. One is a book entitled, The Investors Free Internet: How to invest in the U.S. stock market using free information from the Internet, published by Investors Internet (http://www.investorsinternet.com). The 281-page guide tells readers about a variety of free investment sites on the Internet, and how the information on each site can be used. It draws parallels between the business of investing and the operation of major companies. The authors picked their favorite freebies from the 2,000 sites they studied, then put together this guide on how to find, organize, synthesize and use the information available.
The book is can be purchased at its Website, as can a variety of subscription services based on the researchers’ findings. The book is $37.50; subscription services range from free to $29.97 per month.
The second resource is a CD-based course on chart reading and investment research, called InvestorsHelper. The designers estimate it would take about four hours to go through the material provided, after which the student would be prepared to analyze stock-price movements and predict price swings. Topics include charts, trend lines, channel lines, level lines and various forms of moving averages, as well as analyzing income statements, balance sheets, cash-flow statements and other fundamentals.
The lessons on the CD are extremely simple, occasionally a little too simple. If you’re new to the concepts of technical and fundamental analysis, the videos are helpful. There is a heavy focus on stock-price shifts, and how to predict them. InvestorsHelper is available at the company’s Website ( http://www.investorshelper.com) for $29.95. The CD includes a charting package called the Playground; it features the basic technical studies covered in the lessons.
It’s possible to find all of the technical-charting capabilities included in the Playground free at sites such as Prophet.net and Stockcharts.com, along with explanations. The CD does a good job of explaining “how to,” but seldom takes the extra step of explaining “why to.” InvestorsHelper is published by the Boloto Group, which, according to the Website, will be offering $10 trades at its soon-to-open online trading site, Boloto Financial.
Lastly, GAIN Capital (http://www.gaincapital.com) offers an online course for novice currency traders, called “Learn to Trade Forex.” This course, which can be found at http://www.learn-to-trade-forex.com, gives the student 60 days of access to course materials. Along with the program, students receive a demo trading account with $25,000 in virtual funds, allowing them to apply lessons learned.
Analytical Platform Updates: Townsend Analytics has added the Nasdaq’s market-data product, TotalView, to its RealTick trading platform (http://www.realtick.com).
TotalView provides market transparency by showing the complete depth of the Nasdaq market at all price levels, including the aggregated size of all quotes and orders available for execution in the Nasdaq Market Center for each Nasdaq National Market and SmallCap stock. It also includes multiple attributed quotes for each Nasdaq market participant, and net-order-imbalance information for Nasdaq Opening and Closing cross-eligible securities.
TotalView provides very fast Nasdaq order-book information as Nasdaq has made technology investments to reduce TotalView’s latency by more than 75%, to an average of less than 50 milliseconds.
ESignal, which provides streaming, real-time financial market data, news, analytics and decision support tools to professional and individual traders, has added Nymex Direct to its futures-data platform, FutureSource Xtra. A Web-based Java application, FuturesSource Xtra supplies the commodities, financial futures and foreign-exchange trading community with real-time market data, decision support systems and services covering a broad range of markets.
FutureSource builds its offerings from several core features, including streaming real-time quotes from over 50 worldwide exchanges, real-time interactive tick charting, full options coverage and news feeds delivered immediately on demand. Users can add or subtract modules as needed; for a complete list of FutureSource features, as well as an overview of the entire product line, go to http://www.esignal.com/futuresource.
Published in Barron’s August 15, 2005
