"What to buy" has always been the hardest decision in investing. There have always been investment newsletters offering ideas. And public companies have always hired public relations firms to promote themselves. But the Internet era has produced an entirely new breed of promotional creature: the compensated e-mail newsletter.

What is a compensated newsletter?

It is a publication, electronically distributed as e-mail, that is paid by the company it "covers" to "tell the company story." (There is also a recent proliferation of printed "magazines" that highlight stocks.)

The e-mail looks like a research report, or an e-mailed article copied from some other source or, often, appears to be an e-mail that is sent only to "subscribers." But, somehow, it shows up in your mailbox.

What to think of these PR pitches?

All companies, reputable and otherwise, want to get their story out. The best public relations (PR) campaign a company can have is an extremely positive write-up in a well-known and respectable publication. But when they can't get that kind of coverage a compensated newsletter looks appealing.

Compensated e-mail newsletters are not illegal.

However, the law does require that the compensated newsletters fully disclose both the amount and the nature of the compensation, for each promotional occurrence. This means that the compensated promoter must disclose either the dollar amount of a cash payment, or the actual number of shares granted, including any restrictions upon them, or any combination of compensation.

Many compensated newsletters include the information, but it is sometimes hard to find.

How can you tell if an e-mail you receive is from a compensated newsletter?

The first thing to do is look for the disclosure. Often it is at the bottom of a very long e-mail message. Whether or not this is intended to make it harder for you to find the disclosure is anyone's guess.

Some of the newer print compensated newsletters put the disclosure on the masthead page of the magazine. This makes it harder to find, but you should look there if you can't find any disclosure in the article itself.

Some e-mail newsletters put a line stating *Advertisement* at the top of the newsletter. This declaration does not meet the disclosure requirements.

Occasionally, the newsletters include the full disclosure as a link to their Web site. Briefing.com is not in a legal position to determine whether this actually complies with the full disclosure rules.

Just because a public company has hired an e-mail newsletter service to tell its story does not mean that the stock is a bad investment.

But you should realize that what you are hearing is only what the company wants to tell. Compensated newsletters write what the client wants. They don't do original research and they don't offer independent opinions. They write what they have been told to write.

But that doesn't mean there isn't something there to invest in, or that the story is a scam. It does, however, scream at you to do additional research.

You need to find an additional, outside way to verify the story in the compensated newsletter. This can be very difficult, because most companies hire compensated newsletters because they can't get any additional write-ups. But start with the Edgar filings at the SEC (http://www.sec.gov/cgi-bin/srch-edgar).

So what should you do if you receive an e-mail promoting a company and it sounds good?

The first thing you should do is assume that you are not the first to hear about the "great breakthrough." Even though it may be news to you, and the story may be real, and you can't find anything about the company in chat rooms, it doesn't mean that you have uncovered a secret.

It may feel like it, however, because that's the way the stories are usually written.

In the past several months, Briefing.com has collected a list of compensated newsletters we have received. Here is a brief, and certainly not inclusive, list:

Don't forget that the information in a compensated e-mail newsletter is just an advertisement to buy stock.

Briefing.com does not accept payment from any company for coverage. Furthermore, we do not manage money or have any vested interest in any stock we cover. We do allow our analysts to continue their many years of experience in the stock market by buying and selling stocks and options. However, no Briefing.com analyst may write about any stock in which they have a personal position.

Robert V. Green