Zora, is this what you were looking for???
+Auric Goldfinger (61130 )
From: +TokyoMex
Thursday, Mar 11 1999 10:35PM ET
Reply # of 61872
Money Mag April
Article by Peter Carbonara
WHILE CNBC RATTLES ON in the background, Joe Park sits at a small desk in his
Manhattan living room in front of three computer screens. A stack of how-to trading
books collects dust on a shelf behind him, and a pack of Marlboros is within easy reach.
One computer screen displays the give-and-take in an online financial chat room.
Another shows Nasdaq Level Two quotes, the up-to-the-second prices being bid and
asked by marketmakers like Merrill Lynch and J.P. Morgan. A window on vet another
screen shows an online brokerage account that on this rainy December day looks to
contain about $700,000. U So how's business? U “It's tremendous,” says Park.
“So far I'm up 6,400% [for 1998]—6,400 fl~1 PETER CARBONARA bloody
percent!” U Talking quickly and
loudly, Park, a wiry 40-year-old South Korean immigrant and former owner of four
Manhattan burrito restaurants, offers a recipe he believes any investor can use to make
money fast—like right now—in the current bull market. First, put about half your money
into something nice, safe and boring. Then take the rest and buy stocks that have fallen
well off their highs, particularly thinly capitalized issues that have the potential to move
quickly When they do move, sell. Immediately. Don't hold out for a huge score. Pocket
a gain of a quarter point or even a sixteenth of a point. Repeat as necessary until rich. U
An astute trader
NOT TO BE CONFUSED WITH WARREN BUFFETh TOKYO JOE PARK IS
THE LEADER OF A NEW BREED OF ONLINE STOCK
GURUS WHO ARE MOVING STOCKS AND CLAIMING SCORCHING
RETURNS. CAN WHAT HE DOES BE LEGAL?
PHOTOGRAPH BY WARREN SAL OWE
MONEY April 1999 87
ONLINE TRADING ______________
who times his moves correctly, says Park, can make money moving in and out of a
single stock all day. “Let's look at COOL:' he says, pulling up figures and charts on
Cyberian Outpost, a company that sells computers and software over the Internet. “This
stock has traded between $25.25 and $27 today By being smart on a thousand shares,
just going for one-quarter of a point, you can make $250 in a matter of five minutes.
Let's say if you did it 10 times and screwed up three times but were successful seven
times, that's what? Seventeen hundred and fifty dollars to take home.... That's what
anybody can learn?
This is not traditional Warren Buffet buy-and-hold investing. “This is speculation,” says
Park. “We're not talking about investment; we're talking about moving on—hit and run.
You will not get 6,000% return—as I have done—buying AT&T. It was down at $60
in July and August. If I had bought then and sat on the bloody thing until now, I would
not have gained anything. That sucks, you know? XVhy bother?”
Joe Park is a day-trader, but he's not just one of the thousands of market obsessives out
there trying—and usually failing—to make a living buying and selling stocks via their
PCs. In fact, as “Tokyo Joe” or “TokvoMe4' Park is arguably the most influential online
market analyst and stock picker in the country More than 800 investors around the
world, most of whom pay him $100 a month—making his take more than $70,000 a
mont—are members of his SociitffAnonyrne, which entitles them to receive a daily
barrage of stock tips and trading advice via e-mail. These members also get the
password to a private online chat room, where Park holds forth throughout the trading
day In addition, Park has attracted the largest following of all the cyber-gurus who post
tips and analyses on Silicon Investor (www.techstocks.com), a popular financial
Website with about 100,000 subscribers. On top of that, Park claims that some -thing
like 200,000 people a day visit his own Website (www.tokyojoe.com), where he posts
his tips for free—albeit after first sending them out to paying customers. All of this has
given Joe Park serious mojo in the market.
Last Dec. 11, for instance, Scott Kessler, an equity analyst at Standard & Poor's in
New York City, saw one of the stocks that he follows do some odd things. The shares
of FileNET Corp., which makes document management software, jumped about three
points to $11 a share, and volume rose to about 3.5 million, more than twice its recent
daily average. File-NET which had been in free-fall since last summer, was bouncing
back—for no apparent reason. Then Kessler took a look at Silicon Investor and saw
the hand of Tokyo Joe. Park had announced that he liked the stock over the short term
(the very short term) and expected it to go higher. And that, says Kessler, was enough
to make the stock dance.
The rise of Tokyo Joe represents either a) the coming of age of the Internet as a force in
investing, b) the ultimate democratization of the market for financial advice, c) “irrational
exuberance” in full hysterical flower, d) the pumping and dumping of highly chancy
stocks or e) all of the above. Whatever it is, Tokyo Joe's act has got the attention of
com
panies, online investors, Wall Street analysts, XVeb message-board operators and
almost certainly the Securities and Exchange Commission (although John Stark, the chief
of the SEC's recendy created online enforcement unit, declines to discuss Park).
Admired and reviled online in about equal measure, Tokyo Joe — extremely shrewd,
occasionally charming, frequently arrogant and invariably profane—is a kind of Matt
Drudge for investors, the most influential of a small but growing counter-establishment of
Internet stock gurus.
KEYWORD: FOOl
M
ost of these gurus, including Park, have followed a similar trajectory to Internet stardom.
First they're just investors who like to discuss the market via online message boards and
chat rooms; then a virtual congregation forms around them as they become stock
prophets whose wisdom is eagerly sought by the anxious and the avaricious; then one
morning they wake up and ask themselves, “Why give these people advice for free
when I can charge for it?”
Many day-traders—notwithstanding their frequent claims of independent thinking and
manly seW-reliance—are happy to take guidance wherever they can get it, and an
online industry has grown up to feed that hunger. The most p01-ished and
professional-looking of these operations is Pristine (www.pristine.com), a White Plains,
N.Y outfit—half online tip service, half finishing school for would-be day-
“THE INTERNET IS NOT INVESTMEN17'
SAYS TOKYO JOE PARK, “IT'S HYPE.”
traders—that was launched four years ago by partners Oliver Vdez and Greg Capra,
who've recently had preliminary conversations about joining forces with Tokyo Joe.
Numerous other smaller entrepreneurs run electronic cottage businesses out of their
homes. Among the more reputable and influential is Barbara Simon, a 38-year-old
graphic desiguer in Boca Raton, Fla. who began posting on Silicon Investor a few years
ago under the handle Jenna. Simon then launched a XWbsite (www.marketgems.com)
and subscription e-mail tips service. Many of the online gurus have surprising influence,
particularly on volatile technology issues. “Once you get a following' says Pristine's
Oliver Velez, “it takes no special skill to move a stock?' For breadth of influence,
though—not to mention sheer audacity and salesmanship —Park is the reigning king, the
current numero uno.
The origin of “Tokyo Joe,” as told by Joe Park, goes something like this: Raised in
Seoul, South Korea, he was a smart but wild kid who soon discovered he had a taste
for travel and the good life. As a teenager, he ran away to see Mexico. After a series of
adventures there, including a few days spent in a squalid jail for entering the country
illegally, he returned home to get a law degree. He held a
88 April 1999 MONEY
U
~m~~NG
______________ ONLINE
series of corporate jobs in Korea, Europe and Japan before experiencing a descent into
yuppie hell: plenty of success, money and l98Os-style excess accompanied by nagging
attacks of “XVho am I?” and “What does it all mean?” Following a tearful epiphany in a
Buddhist temple, he decided to start over. He married and brought his wife to the U.S.,
landing in Seattle, where he crashed and burned trying to make it selling condominiums
before eventually working in a gas station. Then the Parks migrated east to New York
City, where they now live with their young daughter in a modest apartment a few blocks
from the United Nations.
In New York, Park found his way into the restaurant business, ultimately winding up as
the owner of four Manhattan Tokyo Joe burrito places. Meanwhile, he was tr~ng to
make money in the stock market the old-fashioned way—and losing. Frustrated with
the mess he says a blue-chip brokerage was making of his investment porffolio, he went
online and turned to the Motley Fool Website and message boards.
Launched by brothers Tom and David Gardner in 1994, The Fool (www.fool.com) has
become the best-
“HE'S THE MAN,” SAYS ONE OF TOKYO JOE'S 0/SCIPI ES.
“FOR $100 A MONTH HE'S A BARGAIN.”
known brand name in online financial advice, generally espousing a conservative,
buy-and-hold philosophy. Park began posting his own stock ideas and became a
presence on the Motley Fool's America Online site (keyword:
Fool), weighing in frequently in the area devoted to computer-drive maker Iomega. In
1996, that stock famously soared—then crashed—on a wave of wild enthusiasm
emanating from the Motley Fool board, a foretaste of the current giddy marriage
between Internet chatter and soaring tech-stock prices. “And I was there,” Park says.
He adds that he first lost money going long on Iomega and then made several thousand
dollars shorting when the stock began to fall. He also learned the golden rule of online
trading: “Hype, man. Hype moved the f---ing stock.... The Internet is not investment.
This is hype, and everybody should know that.”
The world of online financial chat is as much show biz as anything else, an endless,
open-mike night in which charismatic, energetic (and usually anonymous) self-promoters
can rise almost instantaneously from obscurity to a kind of celebrity. So it was with
Tokyo Joe. Eventually, his attitudes about investing started to change, and he began to
feel out of step with the Motley Fool's value-investing model. “I realized the Motley
Fools are fools indeed,” he says, “because they don't know when to sell.... [Tihey pump
stocks—even when they are going down— based on fundamentals. Who gives a s---
about fundamentals? It's market sentiment. No matter how good a
company's fundamentals are, if market sentiment says it's going down, it's going down.
You do not fight the ticker. That'swhenIbecameaday~trader.'~
“MEX, YOU SHOULD START CHARGINfi PEOPLE, MAN”
· n 1997, Park began posting on Silicon Investor, which
· caters to a faster and self-consciously more “sophisti
· cated” investment crowd, many of them day-traders. “It
was wide-open territory' says Park. “It was unrestricted. It was the wild, wild XVest.”
It still is: The sober minority in many Silicon Investor “threads;' or discussion areas,
is often drowned out by vapid cheerleading for one stock or another, not to mention a
regular contingent of short-sellers, angry cranks and would-be manipulators with a
variety of agendas hidden behind their online pseudonyms. But Park, whose Silicon
Investor handle is TokyoMex, is no slouch in the invective department, and his loud and
distinctive voice made him stand out amid the frequent food fights. He is currently the
Website's most followed poster.
The Silicon Investor area devoted to Tokyo Joe and his followers seems to have more
than its share of contention,
with Park trading insults and ridicule with a rotating cast of antagonists—”Deeber, you
are a #@&head”—to the applause of his large amen corner—”TokyoMex is a
Prodigy!!!.” Until recently, one of Park's loudest and most vitriolic critics ran a thread
on Silicon Investor devoted solely to trashing him. But the site's
management ultimately took the thread down. Notwithstanding (or maybe because of)
such brawling, Park attracted a following. He says, “People kept sending me emails:
‘Next time, Mex, you buy something, you let me know.' So this list grew to 2,000
people. So when I bought something, I sent e-mails out and the volume went up and the
price went bonkers. I had no desire to make any money out of this thing; it just
happened, you know? But then some members started saying to me, ‘Mex, you should
start charging people, man.”' He did just that, and a business was born.
LAUGHING OUT LOUD
P
ark currently posts comments three or four times a day on the “Tokyo Joe's
Caf6/Sociite' Anon vine” discussion area at Silicon Investor. He has also flirted with
newcomer Raging Bull (www.raging bull.com), whose managers have been trying to
woo
him to their site. Park says he's grown tired of the yelling and screaming online. The chief
function of the message boards, as far as he is concerned, is to serve as advertising for
his other enterprises. The real Tokyo Joe action can be found in his e-mail to
Soci6te'Anonyme members—about a dozen a day ranging in content from recycled
news to specific stock picks and price targets—and in his private online chat room.
One afternoon in February, for instance, Park was online in the chat room under the
name TokyoMex, with about 200 of his followers crowded around him in cyberspace
like eager yeshiva boys encircling a learned if sometimes
MONEY April 1999 91
ONLINE TRADING
irascible rabbi, alternately flattering him, joking with him and peppering him with arcane
questions. Park, tapping away from behind his Level Two screen at home in Manhattan,
had written earlier that he had received a tip from a reliable source that there would be
news coming on PC Quote Inc., a company that retails market data via satellite and
over the Internet.
At about 1:15 p.m., one of his members piped up to ask when the news was coming.
Park shot back: “How the hell do I knwo [sic] when... what am I a messenger?... its
coming soon!”
Another member wrote: “I always thought you were a messenger—I'm crushed!”
A third chimed in: “TM. ..can you tell me when my niece will have her sixth contraction?
She's pregnant and the doctor wants to know.”
Yet another added: “I don't think TM should answer these questions...until he tells me if
I should lighten my hair.”
TokyoMex himself responded: “lol”—which means “laughing out loud” in cyberspeak.
Park says he decides which stocks to hype to his members based on information he gets
from public sources: newspapers, CNBC, the array of market data available to anyone
over the Internet. “But,” he adds, “I do have some tremendous resources through the
[Socie'te' Anonyme] membership. So we do get some information that comes out
before the rest of the world knows about it.” Park says, for example, a member tipped
him off to J.C. Penney's bid to buy Genovese Drug Stores last November, four days
before
the news became public. “So we got in at $25.25;' he says. “We sold at $30, $31.”
“WHAT AM I? A CHARITY?”
O
ccasionally,there are incidents that provoke sniping on the Internet and bring questions
that Park would just as soon not hear. He insists—angrily and repeatedly—that his
operation is strictly aboveboard, but he does admit to a practice that should give pause
to anyone considering taking his advice: He will sometimes take a position in a stock
and then recommend it to his Socie't6Anonyme and anyone else who will listen via his
posts on the Web. Then, when buying drives up the price to his satisfaction, he sells.
This, Park says, is okay as long as he's honest about it. “Everybody knows that I'm
buying before you buy, and I'm selling when you're buying. Otherwise, what am I? A
charity?” Indeed, his Website does carry a lengthy disclaimer, and his e-mail to
subscribers often states how many shares he owns of a particular stock and at what
price he bought them. Which is more, Park likes to say, than you can expect from most
stock pickers: “[XVith] day-traders and any other kind of scam hypesters—including
myself, sometimes— when they say ‘buy' that means they already have a position in the
stock, including Peter Lynch, including Abby Cohen.”
But if Peter Lynch or Abby Cohen or any stockbroker or money manager bought a
stock, hyped it and sold their own shares into the demand they'd created among their
own cli-
ents, it would be what market hands call front-running— which is not only bad manners
but also a flagrant violation of federal securities law. Can what Joe Park does be legal?
Probably, say securities law experts, including one senior federal enforcement official
who spoke privately According to Ira Sorkin, a leading New York City defense lawyer
and a veteran of both the SEC and the U.S. Attorney's office for the Southern District
of New York, a tipster like Park is likely in the clear as long as he discloses his holdings
to his subscribers. Because he is neither a registered securities dealer nor a certified
financial adviser, Park is for legal purposes essentially a publisher of financial
information. As a result, he has all the protections of the First Amendment and is subject
to none of the regulation to which financial pros must submit. Which means that anyone
following his advice has no legal right to expect Park to be bound by a fiduciary duty to
anything but his own wallet. “Anyone who wants to make an investment on that basis;'
Sorkin says, “God bless them.”
Besides being legal, says Park, his tips don't offend his subscribers because most of
them are doing quite well, thank you. Indeed, if a few sessions in his chat room are any
evidence, Park's Societi is composed mainly of satisfied customers. Danny Chan, an
Indiana University finance major, says he has been up as much as $57,000 this year
day-trading, partly due to Park's tips. He writes in an e-mail message, “T-Mex is the
man.... For 100 a month T-Mex is a bargai£'
Park says he has received no visits or inquiries from regulators, although he admits, “I'm
surprised I have not.” But
“ANYONE WHO WANTS TO MAKE AN IN VESTMENT
ON THAT BASIS, GOD BLESS THEM.”
he doesn't seem particularly worried. Sipping Scotch and chain-smoking Marlboros one
recent evening in a genteel bar catering to a U.N. middle-management clientele a few
blocks from his home, he relaxes after a long day in front of his screens. A dapper older
man whom Park describes as a foreign diplomat thanks him for a recent stock tip.
Meanwhile, Park sits awaiting the arrival of some potential business associates whom he
plans to wine and dine at a Manhattan geisha house (an entirely respectable and elegant
Asian business practice, the well-traveled Park is quick to point out to a provincial
American). He talks big—about starting his own mutual fund, about writing a book
about himself (“It's the American dream”), about taking his operation public one day
Nothing seems out of reach.
A year ago, he says, he had $20,000 in the market. Now he is up more than $1.6
million. Life is good, and Park is feeling expansive. He takes a moment to reflect on
what he, his followers and his imitators mean to the markets and to investing. In a word:
the future. If that's discomforting, he says, smiling beatifically through a nimbus of
cigarette smoke, get over it: “We're the new blood, man.”
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