Investment advisories take a beating in Smart Money article.

"Ten Things Investment Newsletters Won't Tell You," in the October issue of Smart Money, describes author Jeff Garigliano's revelations and pet peeves concerning the genre. Here the ten statements, with some brief excerpts:

1. "We own these stocks, and we're hoping you'll bid them up." He cites Global Financial Traders' Daily Speculator, which was sued last year by the SEC "for allegedly bilking investors out of more than $5.8 million by using the newsletter to hype the stock of American Image Motor, a motorcycle manufacturer. According to the SEC, Global Financial owned about 90 percent of the company's unrestricted stock." The newsletter has since suspended publication.

2. "We're paid by the companies we recommend. The SEC has been cracking down on this practice, also known as 'touting stocks,' but given the proliferation of internet investment sites, the agency has its hands full."

3. "Our celebrity editor is AWOL. Looking for Dick Davis? Don't try the Dick Davis Digest. The newsletter pioneer retired years ago and sold the business to outsiders. Publisher Steven Lord says that the name was kept because of its brand recognition.

4. "We want to get our hands on your money. Some newsletters are essentially vehicles for getting subscribers signed up as money-management clients. On the back page of Michael Murphy's California Technology Stock Letter is an ad for Murphy's mutual funds and Murphy's personal account management business...." He also mentions Martin Zweig, "who launched the Zweig Forecast in 1971 and folded it in 1998. By that point, he told subscribers, he wanted to devote himself full time to managing the $7 billion in mutual funds and other accounts he'd built up."

5. "We'll chew your ear off. Some investment newsletters, it seems, are more interested in saving your soul than in making you money. Take Howard Ruff the Utah editor of the Ruff Times, who includes social commentary like the June 1997 story headlined, 'Events Indicate Adultery Will Be Next Secular Victim.'"

6. "We're no better at picking stocks than you are." "... less than a fifth of them actually beat the S&P 500 consistently, according to Mark Hulbert. 'There are a select few that have been able to acquit themselves quite well.'"

7. "We take huge risks." "Al Frank's Prudent Speculator is one of the better ones out there, up about 15 percent a year since 1987, but those numbers are juiced by margin bets.... Jim Collins at OTC insight doesn't buy on margin, but he does make big bets on technology stocks. The downside? Stomachchurning volatility."

8. "Don't believe our hype." "The SEC keeps a tight grip on how mutual funds and money managers can advertise their track records, but the Supreme Court has ruled that newsletters have much greater leeway."

9. "I have a Ph.D.--in education."

10. "Hope you like junk mail."