Hail Mary pass: A Hail Mary pass or Hail Mary play in American football refers to any very long forward pass, or long bomb, made in desperation with only a small chance of success, especially one thrown at or near the end of a half. The expression was made famous when it was used to describe the game-winning touchdown pass by Dallas Cowboys quarterback Roger Staubach to Drew Pearson in a NFL 1975-76 divisional playoff game. Afterwards, it was reported that Staubach said, "I closed my eyes and said a Hail Mary." Wikipedia

An inventory of sources of investment information

 How do we decide to invest our money? An individual investor can do his own research (for example, by directly reading documentation issued by listed companies) and make his own decisions, but few do so. He can seek information and/or recommendations from an investment advisor, members of his family, friends, reading, listening or watching the media, drawing inspiration  from investment gurus (e.g. the Warren Buffet’s of this  the world ), participating in investment clubs, and we could go on.

 In this commentary we look at a source of recommendations that certain investors use: the investment newsletter.

Investment newsletters: in general

Originally newsletters published for investors were written as well by brokers as by persons or companies independent of brokers. In some cases it was necessary to subscribe and pay to receive them. They gave information on market trends and analyzed specific securities. Some letters merely provided information, while others specifically formulated recommendations to buy or sell.

 An American lawyer in 1986 proposed the following definition of publishers of investment newsletters, and thus indirectly of investment newsletter themselves, reflecting a then recent decision of the U.S. Supreme Court (of which we'll talk about later):

Investment advisory Publisher means the publisher of any newspaper, news magazine, or business or financial publication who renders impersonal investment recommendations or who issues or promulgates analyses or reports concerning securities and who does not otherwise qualify as an investment adviser as defined in this section. Source: Hall or as PDF doc.1565

This definition seems too broad to us today. We would distinguish investment newsletters from the following products or information sources:

• Services that are specialized in making market forecasts, for example Forecasts ,  MartketTrack ,  Alela , and PricePatternPrediction . 
• Research reports by analysts working for investment dealers which are now typically distributed exclusively or primarily to institutional investors.
• Financial journalists with main-stream media, television commentators, bloggers, economists and finance professors who may occasionally make predictions or recommendations but who do not publish regularly and on a subscription basis  texts that provide information on investment, typically with buy and sell recommendations and/or price forecasts.

Investment letters and US regulations

Before the creation of the Securities and Exchange Commission (SEC), there was no legal distinction between publications written by investment brokers, financial institutions and by independent authors. The individual investor could seek stock market forecasts just about anywhere;  in general,  on the value (typically unreliable) of sources of investment information at that time, see a study in 1932 by Cowles or as a PDF doc.1566  .In general, on this remarkable individual, see Wikipedia and Yale University or as a PDF doc.1567 .

It seems that there were many abuses by the authors at that time of investment newsletters, who often saw themselves as financial publicists for unscrupulous stock promoters; in general on the history of the regulation of investment newsletters in the USA, see an article by Hall or as a PDF doc.1567.

 Following the Great Depression the SEC was created and brokers and investment advisers were forced to register with the SEC. Since the dividing line between an investment newsletter and an investment adviser was often difficult to establish, until 1985 publishers of investment newsletters were usually forced to register as investment advisers. In 1985 a cause celebre (Lowe vs. SEC or as a PDF doc.1568  ) made it to the US supreme court, which ruled that registration of publishers of investment newsletters as financial advisers was not required provided that the activities of a person or company were limited to the issuance of general advice, that is to say the advice was given without regard to the particular circumstances of investor.

Because the content of petitioners' newsletters was completely disinterested, and because they were offered to the general public on a regular schedule, they are described by the plain language of § 202(a)(11)(D)'s exclusion. The mere fact that a publication contains advice and comment about specific securities does not give it the personalized character that identifies a professional investment adviser. Thus, petitioners' newsletters do not fit within the Act's central purpose, because they do not offer individualized advice attuned to any specific portfolio or to any client's particular needs. On the contrary, they circulate for sale to the public in a free, open market. (emphasis added) Source: summary at the beginning of the decision. For a summary of US rules today, see the securities law site of Astarista