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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (14718)	3/28/1999 12:48:00 PM
From: Sergio H	Read Replies (1) \| Respond to of 29382

Chris, nice catching up with you. Thanks for sharing some of your thoughts. I happened to catch the Whiz Kid when he was featured on CNBC. How about Merlin...are you familiar with Merlin ? He's featured in today's NY Times. I remember posting on this thread that I was shorting Imaginon the day after Merlin's recommendation as detailed in the NY Times: <Back in early February, an investing site on the World Wide Web called Trading-places.net generated a flurry of excitement among investors who followed the advice of its guru and owner, Chris Rea. Known on the web as Merlin, Rea puts his picks out to members, who then tend to pile into the stocks. Rea -- now under investigation by the Securities and Exchange Commission for his site's relationship with a brokerage firm he has recommended to customers -- definitely has pull. The shares he often touts make impressive trading spikes. But when the buying stampede slows, the stocks quickly drift down. Among the stocks Merlin touted the first week of February were Bull & Bear Group, a mutual fund company; Imaginon, a money-losing software concern, and three brokerage firms: J.B. Oxford Holdings, Muriel Siebert & Co. and M.H. Meyerson & Co. They went up when he waved his wand and dropped when he stopped. It is doubtful that all the Merlin followers who piled into these stocks were able to get out before they fell. But documents now trickling in show that another cast of characters made big money on the sudden popularity of these shares -- corporate insiders. On the very day that Merlin was advising investors to plunge into Bull & Bear Group, for example, five of its insiders were selling stock. Insiders sold a total of 127,500 shares on Feb. 4 at prices between $7.19 and $9.25, generating almost $1.1 million for the sellers. Not bad for a day's work -- especially considering that two trading days later, the stock had fallen back to around $4. It closed last week at $3.75. Insiders at M.H. Meyerson & Co. did even better. As investors piled in from Feb. 3 to Feb. 5, the company's five top executives were getting out. They sold 501,760 shares, generating $6.4 million. Martin H. Meyerson, the brokerage firm's chairman and founder, sold 200,000 shares -- almost 8 percent of his holdings -- at prices between $8.99 and $15.88. He reaped almost $2.5 million. M.H. Meyerson shares closed at $4 on Friday. And finally there were the insiders exiting Imaginon Inc., a favorite that Merlin has touted more than once. On Feb. 5, as Merlin was pushing the stock, an insider named Henry Fong sold $1.2 million in Imaginon shares at prices between $6 and $7.19 each. The stock has since fallen to $4.875. None of the executives who sold their shares in February returned phone calls Friday seeking comment. But Imaginon's president, David Schwartz, who has complained publicly about the manic price swings in his stock, said Fong told him that his sales were for personal reasons and that their timing was coincidental to the surge in the stock. There's nothing wrong, of course, with insiders taking profits in a rising stock. But such sales may suggest that the people who know a company best don't expect the shares to keep going up. Bob Gabele, who tracks insider transactions for First Call in Rockville, Md., put it simply: "Investors who are rushing to buy have to worry about who's heading for the door." >