Today was a day of turnarounds
Picked off a few at their lows and actually got to see them move up for a change. Also pinpointed the Nas low at 9:52, which helped with trading. Interesting reading to follow, and, as my subscribers know, I am a whole different breed
If Tokyo Joe's claim to fame was 200% a year, I should have sold in March and stopped back in December.
Still up about 70%, 100%, and 150?% YTD in active accounts, and that's being fully invested long and after the worst few weeks most of us will ever see in our trading years.
When the market is somewhat cooperative, I find movers and stock bottoms. There was little positive movement the past few weeks and little to work with. But there are now more plays than I've seen in a long time. Maybe not as many fast moving stocks for a while due to thinning of daytrader herds, but plenty of legitimate companies which will enjoy astounding growth from the internet and their stock prices will follow.
Plenty of bargains in other sectors as well.
Jon@ScottOnStocks.com
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To: J. Nelson who wrote (43100)
From: Jim Bishop Thursday, April 13, 2000 10:00 PM ET
Reply # of 43120
Here's the Worth magazine article on TMex
Feature
2000/04
He's Not From Tokyo, and His
Name's Not Joe
By Greg Knauss
Photographs by Erin Patrice O'Brien
So, are Yun Soo Oh Park's stock picks--and his claimed 200 percent
returns--any more reliable than his name? Thousands of investors
paying more than $1,000 a year think so. The SEC seems
unconvinced.
Why doesn't he have an underground fortress?
All the really good evil geniuses have underground
fortresses, or moon bases, or exotic island
strongholds. You can take over the world from a
Manhattan penthouse, sure, but it seems wrong
somehow. Everything else is in place, though, and
in spades: a mysterious past, an army of adoring
fans, government agents hot on his trail, and a
maniacal plan to topple the status quo of world
financial markets. Why no underground fortress?
"Tokyo Joe" Park is, variously, a visionary (according to him), a "horror
show" (according to a critic), and a one-man assault on the way things are
done (according to just about everybody). He is perhaps the most influential
stock picker working on the Web today. He's armed with an Internet
connection, an attitude, and a mailing list capable of making small-cap stocks
swing like monkeys from trees. Is what he does immoral? Maybe. Illegal?
The Securities and Exchange Commission thinks so. It filed a civil complaint
against Park in federal court this past January.
But evil geniuses don't get where they're going by following the rules.
FEES PAID BY SUBSCRIBERS TO TOKYO JOE'S MAILING LIST
DURING 1999, IN DOLLARS: 3,500,000
Adored, despised, emphatic, vague, by turns eloquent and incomprehensible,
Tokyo Joe is, if nothing else, a force to be reckoned with. His resume reads
like the fever dream of a soap opera's writing staff. His past is a hazy blur of
cross-continent adventures. And his claimed returns are enormously
impressive--unless you believe that mean ol' SEC, which has charged him
with not disclosing his plans to sell five different stocks he touted, accepting
shares in a company in exchange for recommending it, and overstating his
performance in 30 separate cases.
Societe Anonyme, the subscription-only Web site Tokyo Joe uses to
coordinate and distribute his daily assault on the forces of normality, boasts
3,600 members, each kicking in $100 or $200 a month, many of them eager
to invest solely on his say-so. Park counsels "no fear" and demands total
fealty. His personality is magnetic and his forces legion. He is, he claims, the
future of trading--today the Web, tomorrow the world. You can't help
wondering if there are uniformed henchmen in the works.
LANGUAGES IN WHICH TOKYO JOE IS FLUENT: 6
Yun Soo Oh Park--alias Paku Matsudai, alias Joe Park, alias TokyoMexx,
alias Tokyo Joe--was born in Seoul, South Korea, in 1949. He left for
Mexico in his teens to study art and promptly spent two weeks in a Mexican
jail for entering the country illegally. After returning home, he attended law
school (never a bad start for an evil genius) before dropping out to work for
Korean multinationals in Europe, Asia, and the Middle East. He married, had
a daughter, moved to Seattle, and utterly failed to make a success of himself
in real estate. Resettling in New York, he cofounded a chain of burrito
restaurants and subsequently sold them all off, save one outlet on East 53rd
Street. It was there that he became a fixture in its basement bar, eyes set on a
TV spooling out CNBC and fingers pounding out day trades on a laptop.
It's not hard, reading some of his early posts on the Motley Fool and Silicon
Investor message boards, to see why Park developed a cultish following
shortly after his conversion from burrito slinger to day trader: He's rambling,
funny, and amusingly out of whack. After Iomega jumped almost 12 percent
one day in early December 1996, Park concluded a long analysis with this:
"Go ahead and penalize me for my banality, my energetic mouth, and my
ceaseless libido, but I truly believe in my IO and soon there will be a day
when I can say halleluja, the children of Abraham and the children of
Mohammed sit and play side by side and can say we are truly free, truly free
from this madness. [Signed,] Your not so any more humble burrito maker."
Another message digressed into an extended travelogue of Egypt, including
such sage advice as "Stay away from Egyptian Chinese restaurants."
NUMBER OF MESSAGES POSTED TO THREE TOKYO JOE
FORUMS ON SILICON INVESTOR AS OF FEBRUARY 2000:
161,404
As Park's following grew, he found himself working "16 to 18 hours a day
corresponding via E-mail" with devotees, he says. "I had close to some
20,000 people asking me to put them on an E-mail list to get my stock
ideas." Twenty thousand people, under any circumstances, is a market
waiting to be exploited. Your defi-nition of exploited will determine how you
feel about Park.
"One day, a member said I should charge," he says, and suddenly Societe
Anonyme was unleashed on an unsuspecting populace. Founded in June
1998 with 280 paying members, it nearly quadrupled in size by the end of the
year. After peaking at 4,800 in April of 1999, SA now claims 3,600
subscribers and six employees to handle them all.
RANK, AMONG WORLD'S BURRITO RESTAURANTS, THAT
TOKYO JOE GIVES "TOKYO JOE'S CLASSIC BURRITO" IN
MANHATTAN: 1
Speaking with him, you can't help liking Park. He answers his
command-center hot line with a crisp "Hello! Joe!" and is happy to talk about
almost anything, usually at length. His mild Korean accent thickens whenever
he gets excited or angry (which is most of the time), and he mixes Yiddish
and profanity with the language of the stock market, which is pretty profane
to begin with.
"My dream," he says beckoningly, "is that all my members will one day wake
up and say, 'Look, thank you, Joe. Thank God! You opened my eyes, and
now I know what I'm doing. I don't need you anymore! I can go out on my
own and make money in this market!' That's what I'd like to see." Every evil
genius has a mind-control device to sap you of your free will and seduce you
to his way of thinking. Tokyo Joe's device is his voice. It's a good thing you
can't be hypnotized over the phone.
Part of Park's drive comes from seething anger. He began his trading career
listening to the advice of the big brokerage houses, and he has vowed
revenge. "Every time analysts would tell me to buy something," he says, his
accent rearing its head, "I bought. And the stock would tank by 50 percent!
And I knew something was wrong here. I mean, look at this: Lehman
Brothers told everybody to buy Lucent at $72, saying it would go to $95, the
day [of] the earnings [warning]. Well, guess what? [What: It cratered, falling
to 52. Good thing this is a magazine, so we can get that word in edgewise.] I
bet you Lehman customers all got out. You know what I'm saying?
Qualcomm! Who gave Qualcomm target thousand dollars a share?
PaineWebber, not too long ago. Well, look at the bloody stock now. It's 139
[in late January 2000], post-split; it's now $600; [the target is] still too high!
So where does this analyst come off giving targets like this and having small
mom-and-pop like in Michigan buying this stuff trusting them?" he fumes.
"Traditional boys have been running investors' lives for many years now.
Well, we're smarter than that now."
The other part of Park's drive comes from what allows him to vent his anger
in profitable directions: the Internet and the power it gives him and his
followers to buck the system. Park sees himself as a liberator, freeing
individual investors from the lethargy and incompetence of the large
brokerage houses. "We realized that we were much more smarter than what
market makers were saying," he says. "That's where the empowerment of the
individual investor comes in now. Look at Warren Buffett! Look at how
much he made last year! Zero, nada, zilch! Worst year. While we are making
money. An average member of my club is making 200 percent return last
year. Average 200 percent!"
ACTUAL YEAR's RETURN OF A SELECTED SOCIETE ANONYME
MEMBER, AS A PERCENTAGE: 100
A 100 percent return is nothing to sneeze at--Warren Buffett should be so
lucky--but the member mentions it almost apologetically, as if he's failed the
maximum leader by only doubling his money. "Had I held his picks longer,"
he says, "I would have done better." As a rule, SA subscribers cite others
who boast higher profits, friends of friends, people they've heard about.
Y'know, them.
It's the potential of becoming one of them that drives a lot of Tokyo Joe's
following. "I can only tell you," says one, "that it has been much easier to
make money using Joe's picks than by any other method I've tried."
"He called Commerce One, CMRC," says another, "and he called it in the
30s, and the next thing I knew it was in the 60s....I rode the sucker up into
the hundreds. I was, like, amazed. I said, 'Wow! Look at this guy here!'"
When asked for his winners, Tokyo Joe rattles off a series of symbols whose
one-year graphs look like the left-hand side of a mountain (see "An Elusive
Genius"). Even his admitted losers--Information Management Association,
Cornerstone--rarely drop by much. One SA devotee recites his experience
with Park as a list of successful picks three times longer than the dogs.
While Tokyo Joe will burp up a dozen or more E-mail dispatches a day, the
true beating heart of SA--and everything a steel conference table is to evil
geniuses everywhere--is its chat room. The main perk of the premium
subscription, the SA chat room will draw upward of 700 people on a busy
day, all eager to joke with, fawn over, and listen at the feet of Tokyo Joe.
And not only because they're not allowed to do anything different.
Members spend the day "interacting like a cyber family," says one
participant--only with Tokyo Joe not so much a father figure as Big Brother.
"Negative comments about SA or its chat room, its personnel or the stocks
that it is following may subject you to discipline, including a temporary or
permanent ban from the room or loss of your SA membership [without
refund]," says the lengthy SA disclaimer. A trap door doesn't suddenly open
under the offender, but that does make a nice visual.
NUMBER OF MONTHS THAT A COMPETITOR PREDICTS PARK
WILL CONTINUE TO SURVIVE: 12 to 18
Not everybody is as enamored with Park as his subscribers. If he hates the
traditionalists, they despise him right back, and the standard-bearers of
financial respectability have lined up across from Tokyo Joe, ready to sling
every damning adjective they can think of.
Financial writer Joseph Nocera railed against Park in a March 1999 editorial
in The New York Times, claiming that Tokyo Joe and his kind mark the end
of life as we know it. He describes the effect of the Internet on investors using
the same verb Park does --empower--but puts quotes around it. "To me," he
wrote, "when a character like Tokyo Joe arrives on the scene, it's a sure
signal that the end of the bull market is near." James Cramer of
TheStreet.com wrote in March 1999 that Tokyo Joe "is clearly less
responsible than I am" in disclosing con-flicts of interest when he announces
his picks.
But perhaps Tokyo Joe's biggest detractor isn't some hidebound traditionalist
or disapproving higher-up, but a peer. Anthony Elgindy--aka
Anthony@Pacific--runs a similar Internet service charging $600 a month, and
while he shares Park's enthusiasm for the Internet and the freedom it
provides, he doesn't mince words when it comes to Park's methods. Tokyo
Joe is a liar and a cheat, claims Elgindy; he's someone flat-out not to be
trusted.
"He's profiting because of his members," Elgindy says, "at the expense of his
members. It's different from someone who wants to profit with his members."
Elgindy's complaint is with how Park discloses his conflicts of interest: He
doesn't. Tokyo Joe allows himself any liberty, up to and including the
freedom to talk out of both sides of his mouth. From the Societe Anonyme
disclaimer: "Tokyo Joe...may sell or short or buy any security at any time
without notice. Tokyo Joe...will not necessarily announce all or even most of
[his] transactions. Tokyo Joe may say he likes a stock and still sell it. Tokyo
Joe...can and will change his opinions on stocks at any time without notice."
It's that dismissive disregard for consequences that disgusts many of Park's
critics. "Tokyo Joe is the kind of person who would like to see himself make
$10 at the expense of some piker losing $10,000," says one former SA
member. "That's the way he thinks."
"He doesn't disclose anything," says Elgindy. "He lies, as a matter of fact. He
would say, 'ABC stock is at five bucks; it's going to twenty,' but he'd have
orders to sell at seven and eight and nine dollars. You have a target at twenty,
but you're selling at seven, eight, nine, into your own buy recommendation. It
looks very, very, very, very, very, very fishy."
Elgindy's information is a little out of date: SA's disclaimer now specifically
states that it won't provide target prices for stocks. "We put that in after this
SEC nonsense," Joe says.
NUMBER OF PAGES OF DOCUMENTS ON TOKYO JOE SENT TO
THE SEC BY ANTHONY ELGINDY, APPARENTLY SPARKING THE
INVESTIGATION: 1,900
Tokyo Joe isn't one to let a little SEC complaint bother him. His methods
may trouble those with a stronger moral compass and a weaker financial
sense, but there's a long way to go until anything's proven.
As if to underscore that point, Tokyo Joe owns up to at least one of the three
charges leveled against him without hesitation. The government claims that
"Park fails to adequately disclose his prior ownership of a recommended
stock, and his intent to sell his shares while he simultaneously recommends
the purchase of such shares." But the allegation might as well have come
directly from the Societe Anonyme disclaimer. "They say I'm a
pump-and-dump," he told TheStreet.com when rumors of the investigation
first surfaced. "Who isn't a pump-and-dump?"
The laws at issue--both passed before television was common, much less the
Internet--allow "any bona fide newspaper, news magazine or business or
financial publication of general and regular circulation" to skip registering with
the SEC as an investment adviser and therefore avoid the rules that regulate
those advisers, including the strict disclosure requirements. Not to extend
similar protections to the Web and E-mail "constitutes an impermissible prior
restraint on speech," writes Columbia University law professor John C.
Coffee Jr. in a New York Law Journal article. If newspapers aren't subject
to the disclosure rules, why would a Web site be? And if Tokyo Joe needs to
register, does Anthony Elgindy? TheStreet.com? Anybody who posts to a
discussion group on Yahoo?
In the past, the Supreme Court has drawn a line between personalized
advice, which is the kind given by investment advisers and which requires
regulation and disclosure, and nonpersonalized advice, which is provided by
the mass media. Web sites and E-mail complicate the equation, because both
can be used as one-to-one or one-to-many mediums. Where does that leave
Tokyo Joe? "Even if recommendations of specific securities on message
boards are safe," Coffee writes, "E-mails are more personalized, and Joe
sends them in volume." But, he adds, if Park makes his recommendations
without any knowledge of his subscribers' portfolios, that might preclude
them from being called personalized and, therefore, requiring disclosure.
Technology has out-paced the distinctions of law.
The other two charges against Tokyo Joe include swapping a
recommendation for a stake in the company and exaggerating his
performance on up to 30 issues, by as much as 2,000 percent. No one from
SA will discuss strategy because a response to the complaint has yet to be
filed, but Joe's attorney (and former SEC regional director), Ira Lee Sorkin,
promises an energetic defense. "There are significant First Amendment issues"
with the government's case, he says. "There are investment advisory issues.
There are statutory issues."
Things would be so much easier if they could just be settled with a gun battle.
AMOUNT TOKYO JOE ESTIMATES HE MAKES PER
DAY--EXCEPT IN FEBRUARY AND OCTOBER, WHICH IN HIS
WORDS "SUCK"--IN DOLLARS: 20,000
Certainly Park has personality to spare, an attitude that leaves a slick trail of
confidence behind him as he moves around. Certainly he has made plenty of
money. Certainly he's smart. But the same could be said of hundreds of other
people, none of whom have gathered the accolades, the attention, or the
wrath--both from the financial establishment and from the government--that
Park has, even on his worst day. So why him?
Here's what it is: He was in the right place at the right time with the right set of
skills, simple as that. The potent combination of the Internet and online
trading cracked open a fissure in the space-time continuum between a burrito
restaurant and the upper reaches of financial success. Tokyo Joe dropped
through and landed on a mountain of cash--$7 million in the past two years,
he claims. But opportunity doesn't mean much if you can't take advantage of
it, and Park is flush with what any would-be evil genius needs: relentlessness.
"I never give up," he says. "Like the way I went to Mexico. I had no visa to
go to Mexico because I had a Korean passport. So what? The border was
made for monkeys, and I felt that as [a person] I deserved to be in Mexico,
because I wanted to be there. So I crossed the fence; I jumped it illegally."
Park is a tidal wave reshaping the landscape of the financial world without
much thought as to how. "I never stop," he says. "I have nothing to lose. I
came to this world empty. I made this money"--he searches for a
word--"unintentionally. I never thought about it, that I would make this
money. Understand? So I have nothing to lose. Therefore I have no fear."
He sure doesn't. Not of the SEC, not of the traditionalists, not of a
government agent slinking into Park's underground fortress. Because Tokyo
Joe doesn't have an underground fortress, remember? He doesn't need one.
Greg Knauss wrote about Continuus Software's IPO in the February
issue of Worth. |
