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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Dave O. who wrote (2700)	8/13/1999 12:42:00 AM
From: Dan Clark	Respond to of 18137

I haven't got much use for day trading firms like All Tech. But, I still agree 100% with Houtkin.

To: Dave O. who wrote (2700)	8/13/1999 3:45:00 AM
From: -	Respond to of 18137

Harvey Houtkin for President! :) That is just too great of material, not to have it posted in full on-thread. The truth! Especially the part about them not going after all the web brokerage ("on-line") accounts, where the real problem is. But they couldn't do that... the trail would lead directly to Fidelity, Schwab, DLJ, and their market makers / NASD pals. Go get em' Harvey! ========================= Day-trading report called 'trash' Head of largest firm says study by states was tainted By Brenon Daly, CBS MarketWatch Last Update: 2:11 PM ET Aug 12, 1999 Software Report Options Report SEATTLE (CBS.MW) -- The head of the largest day-trading firm in the United States is engaged in a little spin control. On the eve of one of the largest gatherings of individual investors in the Pacific Northwest, Harvey Houtkin is telling virtually anybody who'll listen that day trading is safe and sane. Houtkin is the founder and head of All-Tech Investment Group, which claims nearly 3,000 clients using All-Tech's direct trading system to dart in and out of stocks dozens of times a day. All-Tech was a focus of a blistering 46-page report from the North American Securities Administrators Association that reported seven of 10 day traders are likely to lose money. Only 11.5 percent of the quick-twitch traders have even a hope of turning a profit, the report concluded. See our story on the report. "The report is a disgrace: It's a piece of trash. It's a self-serving, nonsensical, meaningless document that has no points to it whatsoever," Houtkin said as he prepared to court investors at the Money Show in Seattle. He said the report was based on information from just 17 accounts -- less than 1 percent of the total accounts -- in a "problem office" to deliberately show day trading as overly risky. "They cast (day trading) in a disparaging light because they have an agenda. You notice there were no complaints from day traders," the pugilistic Houtkin said. "And they didn't go after the online accounts, where all the problems are, where all the complaints are and where the massive losses are." The NASAA report distinguished between day traders, who use special systems to directly access the markets, and online traders, who go through an existing brokerage. Get rich quick? Or broke? Houtkin said the regulators "are in the pocket" of powerful brokerages and banks, such as Morgan Stanley Dean Witter, J.P. Morgan, Merrill Lynch and others. "They don't like what our technological is bringing to the marketplace," he said of Wall Street's big names. All-Tech also was in the news two weeks ago, as its Atlanta office was one of two day-trading firms where Mark O. Barton went on a shooting rampage. Barton, who had reportedly lost hundreds of thousands of dollars day trading, killed nine people. Houtkin said there was no correlation between Barton's day trading and his murderous rampage. "I could see if seven or 10 of these things happened back to back -- then, yeah, there's a pattern developing." The NASAA report took particular issue with the get-rich-quick theme in most marketing messages from day-trading firms. Houtkin dismissed this, saying he has always emphasized that day trading isn't for every investor and that seven of every 10 day traders should expect to lose money. Besides, Houtkin added, "I only spent $150,000 in marketing last year. How much false and misleading advertising can I do on $150,000?" Still, All-Tech has attracted increasing regulator attention. The firm, for example, can't add traders in Massachusetts for the next two years following that state's finding that the All-Tech branch there illegally moved customers' money around. The NASAA has called on the Securities and Exchange Commission to adopt a rule proposed by the North American Securities Dealers Association that would tighten screening and risk-disclosure requirements. The Money Show runs for three days and attracts a number of top investment professionals including CBS.MarketWatch.com columnist Elaine Garzarelli, president of Garzarelli Capital; BankBoston's chief investment officer, Ned Riley; options guru Bernie Schaeffer; and Kevin Landis, co-head of the Firsthand Technology Value Fund