My Friends, Colleagues, and Fellow Market Participants,
Those of you who may have read my posts on the Internet Thursday evening are aware that the trading site that I have established and lead, Stock Operators, had the view that this market would implode Friday. It did not. While Stock Operators cannot take any legal responsibility for trades placed by others, and we are not in the business of giving "advice" in a legal sense (please refer to SEC on that, and their flawed interpretation of the Investment Advisor’s Act of 1940), we would wish to stress a few issues.
At STOPS, our alerts are clear-cut and honest. We do not hedge them in any way. We do not call fifty stocks and take credit for the five that move. We do not issue twenty alerts on the same security. Our alerts are ”Consider BUY HERE” and “Consider SELL HERE”; “Consider SHORT HERE,” “Consider COVER HERE.” This opens us up to error, as we call this market without any escape through semantic means. STOPS has no parachutes when its calls go badly wrong except to alert our members to consider cutting them off.
We at STOPS do not maintain positions in the stock market, so questions of any agenda aside from the financial success of our members are raised without any foundation whatsoever.
This market looked to crash. Most here and across the country saw the beginnings of a panic. The only thing that stopped the panic was Wall Street stepping in to scoop up shares of companies that they had previously crashed on almost no volume last night. The following investment recommendations (which may legally be defined as investment advice) were issued to the public Friday Morning morning, on Intel Corporation:
1. DJ 07:42 DJ Chase Cuts Intel To Market Perform From Strong Buy >INTC [INTC]
2. DJ 07:42 DJ Salomon Cuts Intel To Outperform From Buy >INTC [INTC]
3. MW 08:21 INTEL TARGET CUT $70, REITERATED NEAR-TERM 'ACCUMULATE,' LONG-TERM 'BUY' AT MERRILL [INTC]
4. MW 08:20 INTEL PRICE TARGET CUT TO $70 FROM $85, REITERATED 'ATTRACTIVE' AT PAINEWEBBER [INTC]
5. MW 08:16 INTEL PRICE TARGET CUT TO $65 FROM $85, REITERATED 'BUY' AT LEHMAN BROTHERS [INTC]
6. MW 08:35 INTEL CUT TO 'HOLD' FROM 'BUY' AT CIBC WORLD MARKETS [INTC]
7. MW 08:36 INTEL CUT TO 'UNDERPERFORM' FROM 'STRONG BUY' AT DEUTSCHE BANC ALEX. BROWN [INTC]
8. MW 08:36 INTEL CUT TO 'UNDERPERFORM' FROM 'STRONG BUY' AT DEUTSCHE BANC ALEX. BROWN [INTC]
9. MW 09:01 INTEL DROPPED TO 'MARKET OUTPERFORMER' FROM 'RECOMMENDED LIST' AT GOLDMAN SACHS [INTC]
10. MW 09:06 INTEL DROPPED TO 'OUTPERFORM' FROM 'BUY' AT SALOMON SMITH BARNEY [INTC]
11. DJ 10:14 *DJ Prudential Cuts Intel To Accumulate From Strong Buy >INTC [INTC]
12. DJ 10:38 =DJ Top Five Tech Stocks Shed $120B In Combined Market Cap [CSCO,IBM,INTC,MSFT,ORCL]
13. DJ 10:44 *DJ Dresdner Cuts Intel To Add From Buy >INTC [INTC]
14. DJ 11:07 =DJ Intel Sends Techs Swooning; Has The Chip Hit The Fan? [CPQ,DELL,IBM,INTC,KO,LU,MO,MSFT,WCOM]
15. DJ 13:09 *DJ AG Edwards Cuts Intel To Accumlate From Buy >INTC
16. DJ 13:35 =DJ Tech Sector Pulls Back As Analysts Offer Damage Control
17. DJ 14:51 =DJ Tech Sector -2: Strategist Eyes Retail Stocks As Haven
18. DJ 15:12 =DJ Fund Managers See Uphill Battle For Intel; Stk Pressured
19. DJ 17:12 =DJ Late Trading: Intel, Advanced Micro Rebound >INTC AMD
The investment banks of Wall Street, which may be said to be the present and past market establishment of this country, issued no less than THIRTEEN DOWNGRADES on Intel at the height of a crisis in investor confidence. As Intel had crashed no less than FORTY-FOUR PERCENT from its high a mere four weeks ago, this form of advice raises a few important questions. If Intel were such an attractive investment four weeks ago, at a market capitalization of more than $255 BILLION more than Friday morning, why would views be so negative now, and not earlier? Did the Intel earnings outlook come as a complete surprise to Wall Street? I find that hard to believe. I would be very interested to have these investment banks disclose their trading records and net positions in Intel over the past four weeks. I fear it may be quite illuminating. The actions of Wall Street, throwing oil on the fire Friday morning, AFTER a panic had already occurred – and why they did not issue these downgrades at 4:16pm Thursday (when the warning news was issued)and $47 billion in market cap higher the world may only wonder – leave only two conclusions: either the investment banks of Wall Street are completely incompetent, or they have perpetrated an outrageous fraud on the investment community in not completely fulfilling their fiduciary duties under the Investment Advisor’s Act of 1940, which states (Title 15, Chapter 2D, Subchapter Chapter II, Section 80b-6:
Sec. 80b-6. Prohibited transactions by investment advisers
It shall be unlawful for any investment adviser by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly -
· (1) to employ any device, scheme, or artifice to defraud any client or prospective client;
· (2) to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;
· (3) acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph shall not apply to any transaction with a customer of a broker or dealer if such
broker or dealer is not acting as an investment adviser in
relation to such transaction.
· (4) to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The Commission shall, for the purposes of this paragraph (4) by rules and regulations define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.
The foregoing statutes mean that if the investment banks of Wall Street have knowingly used press releases and downgrades to manipulate any equity issues in our markets, they have violated the law. In light of the events taking place in our markets every day – and certainly those of the past four weeks and Friday morning concerning Intel Corporation - the critical question is raised whether the Wall Street establishment is attempting to fulfill its fiduciary duties to its clients. I have committed a great deal of time to these issues the past several months, and will continue to do so.
By contrast, Stock Operators is committed only to the financial success of its members. Our forecast of an extended market meltdown Friday did not materialize – in any event, not after the opening gap down of over 200 points. We miscalculated. We will not hedge or cloud this fact, and we accept any fair criticism which may be leveled in our direction. However, we would point out the performance of the establishment this morning. We at Stock Operators did not miscalculate by forty-four percent. We stand behind our record as the only trading site of integrity in all of day trading. Though we are veterans in this field, and should have seen this coming, we did not. For that, our clearly mistaken projection, we accept judgment. However, Friday was merely one day. We have compiled a record at STOPS we are very proud of. It is solid, realistic and quite unique in the field of day trading. Those of you who have some experience in this field recognize that in the markets, such a thing as perfection does not exist. Long-term success in short-term trading, though we believe it to be a near impossibility at other sites due to vice, impropriety and corruption, we believe has found a home at STOPS. We welcome all of you who are committed and serious traders to come and judge for yourself – over time, and not based on one ultimately erroneous interpretation of the markets. (For those of you who are site design aficionados, please bear with us a few weeks more while we set our final homepage in place.)
Yours Most Truthfully and Sincerely,
Olivier L. F. Asser
Founder and CEO,
Stock Operators, LLC
stock-operators.com |
