Before you buy another car you walk around the lot, kick the tires, slam the doors and look at the mileage indicator. That's an odometer. I know. That is about all the "research" you can do other than what the car salesman tells you and I hope you know better than to believe him.

The same goes for buying stocks or mutual funds. All the brokerage companies tell you to do your research before you buy. Kick the tires. Slam the doors. Look at the odometer. But how do you do this and can you really get the true story about any equity because you can't take it for a test drive and you don't want to believe any broker. Wall Street wants you to read the prospectus, study the annual report, find out about management, learn the P/E ratios, see that their sales and earnings are increasing and on and on and on gathering statistics until your head hurts.

OK, now you have all that information, but what do you have?

The Annual Report. The title ought to give you a clue. Much of the information in it is already a year old and much older depending upon when you are looking at it.

The Prospectus. Did you know that this complex document was not written for you, the investor? It was written for some Dilbert in his cubicle at the Securities and Exchange Commission in Washington who studies it to be sure it meets all the regulations for full disclosure, whatever that is. If you read the prospectuses for any stock or mutual fund that is a real winner and another where you will lose all your money you will find they are both almost identical. It is a waste of time to read these. They belong in the bottom of a birdcage.

Company management. Do you think they are going to tell you anything bad? Come on.

Shall we keep on going or are you getting the idea? What you are gathering is information that everyone else can access, some of which can be distorted and will not tell you the most important thing of all. Will the stock or mutual fund go up if I buy it? Your broker has all this information so don't ask him as he will regurgitate this mess and make it sound important. In other words he doesn't know either.

When it comes to buying stocks and mutual funds you cannot do any worthwhile research the way Wall Street tells you. When your stock goes down and you lose money they can look you in the eye and say you did your research and it is not our fault you lost money. It is their way to keep from being sued for bad advice.

Kicking tires the way the big boys tell you doesn't work. In a later column I will go into how to find equities that do go up and you won't need any of that Wall Street disinformation to find winners.