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No. of Recommendations: 17
Greetings to the Discount Brokers Board from a new Fool!

I would like to apologize, in advance, for the extreme length of this post -- but I have some people to thank, and I would like to relate the history of why such thanks are so well deserved -- so I beg your indulgence:

Back in November of last year, in a wee-hours-of-the-morning kitchen-table discussion, three of my friends and I reached the consensus that the novelty of the riverboat casinos in our area had begun to pale. We had fallen into the habit of making regular forays to the casino boats, with funds specifically set aside for this purpose (never gamble with “hard” money), but we couldn't help believing that there must be a better place for our dollars than the coffers of the casino operators. So …

The concept seemed simple, at the time: continue to set aside the money that we'd been using for casino trips, but use the resources available on the Internet to attempt to identify teeny, tiny, as-yet “undiscovered” stocks that seemed to have potential for impressive future appreciation (sort of “long-term speculation”). The “real” objects of this exercise would be 1) - Hone our Internet research and DD skills; 2) - Maybe make a little money; 3) - Have fun in the process, using money that we had already written off.

Now, as it turns out, I discovered later (much, much later) that, without realizing it, we were each already somewhat Foolish: all credit card balances at zero, all vehicles paid off, decent LTBH stocks in both regular and IRA accounts (at local non-online “discount” brokers), and a little money in the bank. None of us was new to investing, but none of us had any experience with online brokers, either. It showed.

The first order of business was to decide on an online broker, “because their commissions are lower”. Ha! After some preliminary looking around, it began to dawn on us that this “broker thing” was not so quick and simple.

Well, to make this part of a long story a little shorter, the others soon came to me and said (greatly condensed and paraphrased), “We knew that this might take a little time, but we didn't think it would be so much work, just to find a broker. What's it going to be like when we have to find stocks to play with? Besides, we like playing blackjack”.

So: time to re-evaluate. Do I feel like doing this by myself?

Well, hmmmn no debt except the mortgage, two accounts of LTBH stuff already, a little cash in the bank -- I would be using what would be essentially “toy” money, and the overwhelming majority of any profits would go to buy more LTBH things. And I would learn a lot, more (I think) than I would ever learn with a 100% mechanical, blue-chip approach: It is one thing to experiment with “imaginary” money, and quite another thing to do it “for real”, even with money that you've already decided to treat as “gone”. I decided to “Press On, Regardless”.

So back to the broker search. I looked around some more. I found gomez, and read as much as I could stand. I found Don Johnson's excellent (and extensive) site and slogged through all of it. In retrospect, it was probably a good thing that I found gomez first. I left that site, for the last time, with a large, healthy case of paranoia, and a resolution to be very careful.

And then I found the TMF Discount Brokers Board. What a place!

I read the most recent page of posts, and I got the impression that the contributors here are much more knowledgeable (and civil) than elsewhere.

So I went back seven days, and started to read. I quickly found the FAQ, and read. I followed its links, and read. I went to the Thirteen Steps, and read. And then I came back to the board again and read some more. Now, maybe I thought I knew a little more about these things than the random “man in the street”, but when I slowly began to realize how much I didn't know, well

So I decided to go way back. I went back over a year, to January 1, 1999, and started to read. I read every post. And when I finished, I went back and did it again.

I followed, fascinated, the February odyssey of FoolishMommy, who showed how it should be done.

I made it through the mid-year Datek Flame Wars (and since I had no particular axe to grind, I found it highly entertaining).

I made it all the way through to the end, twice. And along the way, I “met” a handful of people who, collectively, have saved me from certain disaster ---

SoundFX, and OilyFool, and awysocki …

megeranski, for the terrific FAQ

And Castigs, and OhYeah, and kevjtaylor …

zathrus1, for his brilliant # 19621

Even BellaVista, for the comic relief.

And, saving the best for last, the courtly RheS, the (lower case) wisest Fool of all, who always kept above the fray, always stayed on point, and always seemed to be gentle with new people, without coddling. An anthology of his posts, alone, would be sufficient for anyone to make a sound start.

Thanks to you all, and to all the others, both frequent posters and seldom: You have all helped to keep my chestnuts from the fireplace.

So what was the final choice?

Well, what I had in mind (for the time being) was a very specific and rather limited exercise. I made a short list of requirements:

* A willingness to execute a trade in any stock with a ticker symbol, from XOM all the way down to the rankest “pink sheet”, for the same price.

* Checking (there are some horror stories (perhaps apocryphal, but …) about brokers refusing to cut checks when people ask for some of their money).

* Reasonable commissions

* Identical commissions for market and limit orders

* Browser-based (some aren't)

* Decent customer service

Desirable, but not absolutely necessary:

* Real-time account updates

* Money Market sweeps

* Blazingly fast website

I then attempted to emulate the FoolishMommy model: I made a list of about thirty firms, and the manner in which each of them addressed my own specific requirements. I made phone calls, I sent e-mails, and I requested documents.

In the end, I narrowed it down to four. The last ones I eliminated were:

* FreedomInvestments: At evaluation time, they required the use of proprietary software, and they have the audacity to charge for connect time.

* R J Thompson: At evaluation time, they were not yet licensed in my state, and they did not offer checking.

* Waterhouse: Tempting. They are adored by some, vilified by others. In the end, my experience with them on the telephone was discouraging.

So who's left standing?

Sutton Online is a nearly unknown outfit that caters almost exclusively to daytraders. They offer three service levels: their Level 2 and Level 1 ½ are direct access systems; Level One service is the familiar, browser-based order entry.

Account Minimum: $2000.00 ($5000.00 for Level 1 ½ and Level 2)

Commissions: OTC BB: $14.95, market or limit. Listed: $14.95, market or limit, plus .01 per share. I can live with that.

Free checking

Money Market Sweeps

Customer Service: I made several calls, on different days, at different times. The phone was always answered on the first ring, and I never had to wait more than 30 seconds to speak with someone. Everyone I spoke with was, if not exactly affable, at least courteously businesslike, professionally tolerant, and (seemingly) competent.

Account Setup: Execute preliminary documents online. Accomplish this early enough in the day, and your account number arrives, by e-mail, within two hours. A full set of documents arrives by snail mail. I did everything else by snail mail, including the certified check with the acount number written on it. The entire process took about two weeks, the way I did it, but the market won't disappear. There is one tiny, potential glitch: they apparently use the same set of documents for all three service levels when establishing accounts. If you do not wish to accidentally establish a daytrading account, you must clearly specify that you wish Level One only, in which case some of the documents will be unnecessary.
All in all: stress-free, pain-free.

Website (after login to trade): So far, it seems intuitive, uncluttered, and almost ridiculously easy to navigate.

I am a satisfied customer.

So that's the story from my own little corner of the world. I don't go to the riverboats anymore; it seems much more Foolish to spend that time on research. And I have done a few careful trades already, and I have discovered a thing: To earn money as a result of one's own research and DD is infinitely more exhilarating than “getting lucky” at a casino. More Foolish, too, I suppose.

So I'm going to hang around for awhile. I don't know whether I'll be of any use around here (and I'll certainly keep my mouth shut on subjects that I know nothing about), but I am vastly indebted to this board, and the people on it, and I'd like to make at least a feeble attempt to give something back.

Once again, thanks to everyone. Sorry this took so long.

--- Hoplite

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