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

To: - who wrote (3171)	8/22/1999 11:22:00 AM
From: Don Pueblo	Respond to of 18137

I totally and completely agree with your thoughts. I could not have said it better. You are exactly right. Exactly. (Except it's "Series 7", not "Level 7", and a 7 can't run a firm. That's handled by a broker [broker's license; different thing; two rungs higher on the ladder], like Muriel, who has fiduciary responsibility for the "broker" [salespeople; Series 7, AKA "stockbrokers"] under her, as it were. Level 7 is the Games Area on the Flamfoozy Mark 7, drop by any time, sir.)

To: - who wrote (3171)	8/22/1999 11:46:00 AM
From: marketbrief.com	Read Replies (2) \| Respond to of 18137

Hi P.A.T., I haven't read all of Gretchen's stuff but the ones that I have looked at tend to be be misinformed and off-base. I think the "threat" posed by characters like TokyoJoe are totally overstated... has everyone forgotten Caveat Emptor or what?!? I am agog that lil Joe Park makes 90-180K a month from subscription fees, and I am now considering becoming a pump and dump promoter myself, lol. Would sure beat trading for a living! ~Smart$

To: - who wrote (3171)	8/22/1999 11:48:00 AM
From: OZ	Read Replies (1) \| Respond to of 18137

Steve, I am posting Tokyo joes reply just to add balance. If this guy could already move a stock before, just imagine how much more now after the publicity. Subj: We Demand a Retraction or Correction Date: 8/22/99 12:18:58 AM Eastern Daylight Time August 21, 1999 The New York Times 229 West 43rd Street New York, New York 10036 Re: "Internet Chat Rooms Send Stock Prices on a Wild Ride." Dear Sirs/Madams: I am the Chief Executive Officer of Tokyo Joe's Societe Anonyme. I am also an attorney licensed to practice law in, inter alia, the State of New York. I write in reference to the referenced article that appeared on Page A1 and in the internet edition of your August 21, 1999 paper. I have copied it below from your web site for your convenience. We dispute several key "facts" alleged in the article. Now, to clarify our concern, I will first provide a bit of background. Briefly, our organization at tokyojoe.com runs a real-time Premium Chat room on Internet Relay Chat (not on the web site). Our subscribers are free to post news alerts and updates during the trading day. Our chat room, like virtually every other such room (there are many), encourage our members to keep us informed of credible and verifiable news and rumors that they see elsewhere. The first obvious falsity in the article concerns a "fake press release." On Friday, August 20, our member tiny - the "tiny" mentioned in the article - did what he was supposed to do. He saw a news item on a reputable investment web site, briefing.com, and posted it in the chat room for our benefit. Nothing nefarious was going on, despite the clear insinuation of such by your reporter. The link and text of the news item that member tiny saw: briefing.com 12:42 ET Information Management Associates (IMAA) 12 3/16 +3 11/16 (+43%): Stock continues to trend higher in anticipation of spin-off of its reverse auction unit Buyingedge.com, which is a competitor to Priceline.com (PCLN). Company recently received investment from Internet venture fund CMGI Inc (CMGI). Volume an extremely heavy 6 mln shares. Stock trading at new 52-week high. and here is member tiny's post in the Premium Chat room: 12:42 ET Information Management Associates (IMAA) 12 3/16 +3 11/16 (+43%): Stock continues to trend higher in anticipation of spin-off of its reverse auction unit Buyingedge.com, which is a competitor to Priceline.com (PCLN). Company recently received investment from Internet venture fund CMGI Inc (CMGI). Volume an extremely heavy 6 mln shares. Stock trading at new 52-week high. Now, a couple of things are significant here: 1) tiny posted exactly what he saw on another reputable web site, and had no reason to think it was inaccurate or erroneous, and clearly was NOT making anything up; and 2) tiny's post was most definitely NOT a "fake press release" as stated in the following erroneous sentence from the article: "On Thursday, a subscriber named Tiny posted a fake press release that said IMA. was going to spin off buyingedge.com, the Internet shopping site." This is a cut-and-dried case of a false statement being made to further an unfounded and malicious attack on our organization. Another objectionable false statement is the following sentence about a routine server crash: "Losing the connection was highly unusual, and some traders suspect foul play." This statement is absurd. Server crashes on Internet Relay Chat are fairly common, particularly on the network our chat room uses, and particularly recently due to our recent implementation of a dedicated chat server for our organization. We informed our members our switch to the new server, and have had several problems recently. There was nothing "highly unusual" about a temporary server problem at all, unless you consider things like rainstorms or cloudy days "highly unusual." I doubt any reasonable person who actually knew the facts would find your reporter's conclusion reasonable. This is simply another false statement, perhaps made out of sheer ignorance, but maliciously calculated to create a false impression of nefarious activity in your worldwide audience. What ever happened to journalistic ethics and fact-checking? The facts I produce here are all easily documented. I urge your organization to verify them, as it should have done in the first place. The truly astonishing feature here is that your reporter apparently never attempted to verify anything. Given these demonstrable falsities, we have to question other "facts" in the piece, such as whether the un-named people quoted in the piece (who just happened to further the reporter's apparently malicious agenda) actually existed. We demand a retraction or correction. The article was a disgrace, though with some admittedly titillating fictional touches. Very Truly Yours, James Bjorkman, Esq. CEO, Tokyo Joe's Societe Anonyme New York, New York Prices shown reflect either actual buys or market price at time of call.

To: - who wrote (3171)	8/22/1999 12:33:00 PM
From: Don Pueblo	Read Replies (1) \| Respond to of 18137

I just realized that my last post could cause more confusion for some people that it tried to explain, and I've never seen an explanation of the different licenses on SI, so with your permission: The securities industry is, I think, the most regulated industry on the planet. I suspect this is due primarily to the fact that you can make a very large amount of money in a very short period of time. In order to work at a firm that sells securities [stocks, bonds, options, futures contracts, etc.] you gotta have a license. (Tokyo Latino or whatever he calls himself does not have a license, because he buys stocks in his own personal account and then tells other people to buy them, and a licensed broker maybe goes to the Federal Graybar Hotel for that if he gets caught. ) An ordinary "stockbroker" has, at a minimum, a Series 7 license. He's a "seven". There is a lot of stuff he can get in Major Trouble for if he screws up; from calling somebody he never talked to before at the wrong time of day to calling somebody in the wrong state and lots of stuff in between. If you sell securities through a firm, or even talk about it, and you don't have a license, and Dad catches you, you are, as they say, "Texas Toast". This stuff is all covered in the Securities Exchange Act of 1934; that is the reference document if you want to see the Actual Specific Facts. Some of the different licenses and a homestyle description of each: Series 3- commodity futures license Series 4- this is a "ROP", Registered Options Principal. You gotta have a current 7 or you can't get a 4. A 7 can sell options without a 4, but if you have a broker that is making options trades for you, you might want to ask him if he is a 4. Series 6- can sell mutual funds and insurance products only Series 7- General Securities Representative License, [AKA "registered rep" or "a Seven"]. This is the first license that a stockbroker gets. They can expire. Registered Reps don't let their licenses expire as a general rule. Series 8 - Sales Supervisor, you gotta have a current 7 or you can't get an 8. Series 11- Assistant Rep Order Processing (AROP) can take an unsolicited order, fill out a new account card, and other stuff. Series 63- the license that a rep or a broker must have to sell securities in a specific state. All 7s have a 63. Series 24- General Securities Principal License, kinda like a "Manager". You gottta have a 7 to get a 24, and you gotta have all the other licesnse that everybody has that you are training or bossing around. You can't just hold a 24 and not a 3 if you are yapping at your rookie commodity salesman, for example. If there is a 4 at the firm, then his boss, the 24, has to have a 4 too. The person that whips the 7 that just screwed up on the phone is the 24 (under ideal circumstances); it's his ass if some customer gets cranky or one of his boys gives a customer a price and time prediction like "double in the next 7 months". Regular folks have no idea what kind of trouble a 24 can get into if things go wrong on his day off. Broker-Dealer- this is called a "BD" and is the license the FIRM and the OWNER of the firm has to have to do business. AKA "Big Fill-in-the -blank" So basically, the OWNER of the firm, THE FIRM ITSELF, and every dang person that WORKS at the firm with the exception of the guy that cleans the coffee machine, has at least one license and probably 4 or 5, and they all have to be kept up or they expire. The hypesters and stock touts don't have to follow the same rules, they have no liability if they do not have a license and don't work at a firm. A tout can, for example, buy 50,000 shares of stock, then put out an e-mail that says "Buy this, it is going to double this afternoon, and when it does I am going to sell everything I already bought before I sent you this e-mail" and no law is broken as far as I know. If a 7 did that, his clothes would be out of style when he woke up. Next time: how firms make hundreds of millions of dollars not counting "commissions".

To: - who wrote (3171)	8/22/1999 6:13:00 PM
From: TFF	Respond to of 18137

Bingo.

To: - who wrote (3171)	8/25/1999 11:46:00 PM
From: -	Read Replies (2) \| Respond to of 18137

Here is a great article relating to this Muriel Siebert quote, written by Greg Capra at Pristine - spot-on, pointing out what typical anti-trader baloney it is. It's copyrighted, so I post it here with permission from our trading friends at Pristine. -Steve ================ PRISTINE CHART OF THE WEEK - WEEK OF 8/23/99 Chart can be viewed online at: pristine.com NEWS ITEM Muriel Siebert, chairman of the discount brokerage firm that carries her name, expressed outrage over a similar zest for her company's shares last April. When recommended in a popular chat room, the stock catapulted from just over $19 to about $70. It closed Friday at $18.875. "There's a lack of accountability in these chat rooms, and it's necessary for the regulators to do something if these people move individual stocks," Ms. Siebert said. "If the regulators want me to lead a parade against some of the things going on, I would do it." People approach her on the street, she said, describing their anger over paying $70 for a stock that has now returned to a more reasonable level. Securities regulators as a matter of course do not comment on investigations into suspicious movements in stocks. PRISTINE COMMENTS Stocks in the same sector will often display very similar chart patterns. Institutions and traders react to bullish or bearish news about that sector causing them to move in unison. We can see this clearly by overlaying the charts of these companies on top of each other. This weekend Muriel Siebert, chairman of Siebert Financial Corporation (SIEB), leads readers of the NY Times to believe an internet chat room caused the shares her company's stock to move from $19.00 to $70.00 last April (Actually, the $70.00 high was hit in February). She tries to put blame for the abnormal run up in price and subsequent drop on chat rooms. This sounds like an attempt to transfer heat from angry shareholders mentioned in the article to the new whipping boys of Wall Street, "Day Traders". A quick, cursory look at a few charts in the brokerage sector will clearly show that Mrs. Siebert theory does not hold much validity. The true cause for the run up and collapse in SIEB is neither the fault of Siebert Financial, nor is it the fault of Internet chat rooms. The speed at which information is dispersed has changed for sure. The Internet now enables virtually anyone access to breaking news, leveling the playing field between institutions, traders and investors. This dynamic does shorten the amount of time in which all can react, at times causing exaggerated moves. I for one am grateful for the leveling of the playing field. The "old" Wall Street, on the other hand, is likely wishing it still had that edge. As chartists we always look for the truth in the charts, not in the news. Once news on a particular stock is out, we look to the chart of that stock to find out what the truth is. As we have always told our subscribers, charts don't lie. The charts shown above of J. B. Oxford (JBOH) and M. H. Meyerson & Co (MHMY) clearly show how they followed the same pattern as Siebert Financial (SIEB), day by day. My question is, "Did these 'evil' chat rooms cause abnormal moves in all these stocks also?" Of course not. The charts shown above indicate that this was a sector move, driven by large institutions vying for position in the on-line brokers. A further look will reveal similar patterns in Southwest Securities (SWS) and E Trade (EGRP). Unlike the others, these two stocks moved to new highs after February, indicating their leadership in the group. Again, "Did chat rooms push these two heavy weights to new highs too?" "Or were the fundamentals of these companies just a bit better at the time?" Needless to say, I think the latter is the case. In any event, all of these stocks are currently at, or below, their February levels. And at the time of this writing, they are starting to show some signs of stabilizing. The next time you read about the next great stock in the paper, hear an analyst upgrade, or an earnings report that beats estimates, my advise is to check that chart and the charts of companies in that sector. If you find that they have been moving up strongly prior to the news release, it's likely the effect of the news was already anticipated. If the effect of the upcoming news is already reflected in the stock, the odds of the stock dropping on the news is higher. Failure to understand this concept causes far too many to buy the day's high when a news item is positive. While the playing field has been made more level, the "old" Wall Street still does have an edge, simply because they control the news, to a large extent. If Mrs. Siebert really wants to do something useful, perhaps she should lead a parade against some of the dubious brokerage upgrade/downgrade tactics and other longstanding news tricks practiced by the very same industry that made her. There will certainly be some bigger fish to fry there, as opposed to the small ones found in chat rooms like ours. Careful though Mrs. Siebert. The big ones fight back harder. Greg Capra Pristine.com www.pristine.com =================