I normally don't write magazine reviews, but I cannot remain a bystander. I have subscribed to the Forbes for a year and did not renew my subscription. There is a reason for this.
About the Magazine
magazine is a financial publication that aims to provide information
and help one with financial matters. There are is wide variety of topics
covered: retirement planning, stock and mutual fund picking, general
financial advice and more.
What I Enjoyed
The magazine has relatively comprehensive coverage and publishes articles from "experts" with varying viewpoints.
of the "experts" actually provided good advice (e.g. Gary Shilling),
but they were vastly outnumbered by "experts" who probably don't
understand basic math.
What Is Not So Good
coverage is not objective and the "experts" provide generally horrible
advice. The viewpoint of the publication is most likely formed by Steve
Forbes. Its general viewpoint is that of a perma-bull, which is helpful
only until it isn't. The general mantra is "buy-buy-buy". You know, it
is like real estate industry tells everybody that "now is the good time
to buy real estate", always. The same applies to this magazine. Various
experts tell you "now is the good time to buy stocks". Always.
is an example: one of the constant contributors (Lisa W. Hess)
recommended buying Freddy Mac and Fannie Mae repeatedly, over a course
of months as their stocks were going down from $29 and $35 respectively
to $4 and $5 to about a dollar. Every time she acknowledged that she was
"too early" making a "buy" call, but now is certainly the time. Reading
her articles made me cringe. I feel very bad for her clients (she is
some kind of investment advisor) and the readers who actually followed
her advice and bought the stocks that are both now close to 60 cents.
other "experts" recommended buying a bunch of other stocks as the
economy was going down more and more. They all claimed that there was
going to be a rebound very soon and then those stocks would skyrocket.
The stocks they recommended were only going further down. So how is this
supposed to work - are they going to recommend you buy this or that
stock, then reiterate their "buy" recommendation throughout the stock's
fall, until the stocks actually starts going up a little and then they
will feel vindicated? Let's recall that even a broken clock shows
correct time twice a day.
Then, there is a section where about three stocks are quickly analyzed and recommended to either be bought or sold short.
general, people who need advice about what stocks to buy or short,
especially from a magazine (without looking at a stock's balance sheet,
earnings, debt, etc.) have no business buying and selling stocks, lest
they like to gamble with their money. This is not investing, this is
what's called speculation. I read a research where performance of the
list of professionally-picked stocks was compared to a random selection
of stocks. The randomly-selected stocks did better overall. And those
professional stock pickers were better than those clowns at Forbes, at
least they had good track records.
Buying individual stocks works under two conditions:
You know how to do fundamental research and actually do it (provided
the company provides objective information, which is something Steve
Forbes apparently dislikes - see below).
2. You get lucky or you buy almost anything is a strong bull market or short almost anything in a strong bear market.
Otherwise, good mutual funds are a better approach.
Forbes himself wrote many an article about how mark-to-market rules
ought to be suspended. You know, they don't reflect true value, et
cetera. Sure, let's follow the example of Japan and pretend for decades
that underwater mortgages are worth close to their original value. God
forbid investors who consider buying bank stocks discover that those
banks are actually insolvent.
Pros: Good articles on topics that don't provide advice on picking stocks or general economy.
Cons: Repeated horrible "advice" from "experts" that don't understand basic math, agenda-driven content.
magazine is a good source of information on a few topics. Some articles
provide a balanced point of view. But the "advice" that "experts"
provide on its pages can be financial suicide. Consider yourself warned.