I see these gurus around SI, posting there picks here on on their sites all day, and spending a lot of after hours time promoting themselves, working on their site, etc in addition to whatever research they do for trading. I don't think I would choose that lifestyle if I was truly a market savant.
Hi Parker!
First, great idea for a thread!
But I got reading about as far as the thread I'm responding to...i.e., beyond A@P in self-defensive mode...and had to comment.
I think there are many reasons why someone who has a good deal of trading knowledge (hard-earned, no doubt), success and (let's be honest) "luck" might want to go "commercial". Some reasons are certainly self-serving, but for the most part, I feel, commercial "guru" sites are motivated by several admirable intentions...such as...
...the desire on the part of the guru to "spread the word" as broadly as possible (consider the evangelistic ferver of the religious convert: she/he could rest quietly in the knowledge of her/his own salvation; but instead feels compelled to share that knowledge so that others might profit from it...)
...the desire for a steadier income than what the whims of the market offers (surely a sound business move, if nothing else)...
...and simply, the desire to "teach". Why teach? Because for some teaching is in the blood; it is what they are and do by nature. Teaching involves countless hours of solitary study, experiment, failure, and the eventual discovery of the truth...one cannot be a professor without having something to "profess"!...and when that happens - whether it is the truth of subatomic structure, or of market patterns - the natural reaction on the part of a born-teacher is to TEACH!!!
I teach by profession. It is a major part of who I am. I also have learned a thing or two about the markets, and through a lot of trial and effort and countless hours of study (just ask my wife!) have developed a trading system...or rather, systems...which have proved very profitable. Here on SI I post my picks for free...as close to real-time entry as possible, giving the reasons for the trade, and what I am looking for regarding an exit...etc. I also have been very open with the rudiments of my trading systems...and to date we have dozens on the thread who have applied and are applying them. All, so far, has been for free.
Still, there is the desire to go "commercial". Why? See the above...
Last year, I was invited by a College's investment team (not my own College's) to give an informal talk on the benefits of technical analyis. The team was made up of both CPA's and students who together invested a portion of the College's endowment in individual stocks (the College is mostly invested in mutual funds and hedges). After my talk, the team went on to double their return over the previous year. This was 1999, and the market had a pretty good year...so I can't take full credit for their success. But was I compensated in any way? The increase represented about an $180,000 difference in return. Did I see any of that? No...I just did it gratis because I love to TEACH...and especially love to teach what I know about the markets.
But why not charge for what is/can be a very valuable service? Gurus are paid to do what the average joe/jane investor doesn't have the time to do: learn what works, and find stocks to apply that learning to...We pay preachers (pretty good salaries too!) to read and interpret the bible for us...doctors to study and body and tell us what is wrong/right with ours...auto mechanics to learn all about car engines so they can fix ours when they break...why not pay stock gurus for what they know, and have the desire to teach?
Personally, I think gurus should be paid on a kind of sliding scale. You give them 10% of your winnings trading the way they tell you to trade. And you charge them 10% if you go home with a loss...
I hope this furthers the discussion.
Again, this is a great idea for a thread. And if you make the likes of A@P, Waxie and TokyoMex squirm, so much the better!
TC
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