|
PureBytes Links
Trading Reference Links
|
Hi Mark,
Thanks for your considered interest, but your statements are slightly out of
date.
First, there is absolutely no need to be a CTA to 1) publish a futures
newsletter or 2) sell black box software. This is a big change that became
effective at the end of March, 2000 when the CFTC lost a big court case and
decided to change their rules before they lost even more jurisdiction on
appeal.
Anybody can publish a newsletter saying just about anything they want. The
same with those people that build little black boxes.
With regard to newsletters, the new regulations state that as long as the
publisher has no control over any subscriber's funds or, on the other hand,
is not providing a personalized service for a particular subscriber, and
provides each subscriber with the same newsletter, s/he can say just about
anything s/he wants and it is perfectly legal under the Free Speech
Amendment of the Constitution. The CFTC has decided to call these
individuals unregistered Commodity Trading Advisors, so I guess they're CTA.
Now there is one point you are absolutely correct on. The CFTC still has
jurisdiction over and can prosecute any fraudulent claims and they have a
successful track record of doing just that. I would have to think that
anybody would be an idiot if they engage in fraudulent or other illegal
activity. Fraudulent advertising or promotion has always been illegal,
whether for newsletters or other systems. If you make a statement in the
newsletter, it had better be true (if a statement of fact) but if a
statement of opinion, then the sky's the limit.
I think your comments about inflated returns, pyramiding scheme, etc. should
always be considered in evaluating any newsletter or other service. What
you so conveniently forget is the human factor. There may be some great
trading systems out there. Take ours for example. Even with a great
system, you can still screw it up and we've managed to do that over the
years because we never looked at money management, which I'm sure you'll
agree has to be an integral part of any system. Other human factors could
include poor execution (do we go at the open or during the day or at the
close?) or just a basic failure to follow the system because you just don't
believe that buy signal. How many times has an active trader second guessed
his system? How many systems fail because of these human factors?
Now here's a question for you, oh self-appointed guardian of ethical
behavior and questionable advisors. What experience do you have? How long
have you traded? Do you even trade? Why do you believe you know more than
any other list member? Your last comment to me when I announced we were
going short a week or two ago just about accused me of lying about our
trade. You did say you were happy with the long side. Were you even in a
trade and if so, how much did you lose?
I know you have a programming language that you market and that it does
include most, all or maybe even more than Metastock's. How much real
trading experience do you have or is it all theoretical? Do you trade at
all or just haunt the list to shill your product and antagonize Ton, Steve,
myself and others who really trade? What size positions do you trade? What
futures or stocks?
You seem very interested in what others in the group are doing, figuring
they're all lying, so I'll offer you a challenge in front of everyone.
I'm willing to send scanned copies of our last couple of trades (with the
addresses and account number removed but the names left on) for our S&P
futures trades (Jack Carl but we're in the process of moving our accounts to
Lind Waldock) as well as our indices and stock trades (Schwab) to an
impartial observer (like JimG, but not one of your pseudonyms) and challenge
you to do the same. Sort of like put your money where your mouth is. On my
part. this will include 3 futures accounts and one Schwab account with total
assets in the six figures. We have another futures account that belongs to
my brother alone and his family's Schwab account, but I think my accounts
should suffice.
To make it even more interesting, I'll list my Schwab trades for today. We
bought, on the open, the following (you remember these positions we closed
as the ones you questioned my veracity on?):
QQQ to close our short for a profit
DIA to close our short for a profit
SPY to close our short for a profit
The following are my new positions:
AMAT
AMD
CSCO
ERICY
FLEX
IMNX
JDSU
LSI
NTAP
QCOM
SFA
TER
XLNX
These 13 stocks were culled from an initial list of 54 stocks which we
reduced to 25 and then to 13. We try to trade from 10 to 15 different
stocks in our portfolio. Again, since we bought all of these on the open,
it'll be quite easy for you to verify the prices printed out from Schwab's
Velocity (their on-line trading program) showing our fills.
Now since I've been out here for umpteen years on the list and am not trying
to sell anything (at the present time), I'm not going to go to the expense
of paying an auditor to call you out. I think photo copies should be
sufficient. I'm just doing this to see what you actually do aside from play
mentor to the list and shill some techno-babble. A mentor should at least
have some practical, trading experience.
This is not meant to be a flame but merely an attempt to find out whether
you have any practical, real world experience. If, in fact you do, I'll be
the first one to publicly apologize to you and the group for my thoughts.
Now, in keeping with my philosophy of total honesty (much to your disbelief)
there is a reason behind my challenge. My brother and I are considering
publishing a newsletter and have an attorney looking at what's involved. We
are also looking at whether we want to spend the money ($1,000) to become a
CTA or to even get involved with a newsletter. Maybe we should consider
setting up a fund? We really don't know and are in no rush to make any
decision. It has to make financial sense and after days like today, we're
definitely in no hurry to make a decision. We have other questions as well.
Is it worth the time or should we just keep on trading privately? Should we
even bother with the pain and suffering involved with working with the
public, even if we do provide an expensive service (looking for fewer
subscribers rather than quantity)? You should know the problems dealing
with the public since you peddle your software package. I've heard your
comments about audited positions and agree that should we ever decide to do
a newsletter of set up a fund, we'll have to provide these. Until we make
the decision though, as to whether we're going to proceed in this direction,
we're not going to spend much money ramping up since we have at least a
50-50 chance that we'll stay private. Then we only have to worry about the
IRS. With 10 days a year like today, we'll make seven figures , and we
won't have to deal with people calling us liars, or even worse.
Regards,
Guy
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Mark Brown
Sent: Tuesday, May 30, 2000 6:26 PM
To: metastock@xxxxxxxxxxxxx
Subject: [OT] WARNING
It is specifically against the law for anyone to represent historical
hypothetical trades as a matter-of-fact. It is also specifically
against the law for a person to hold themselves out as trade
adviser without properly being registered. The purpose of the
registration is to verify the track record of the individual who is
making a representation of their actual trading.
Time and time again people have made outrageous claims of
profitability only to be later prosecuted for misleading the public.
The facts are most professional money managers who have all the
resources available to them that are possible have not returned in the
two-year period the percentage of probability as someone here on
this list has claimed to making ten days.
Anyone with a calculator can figure it that rate of annualized return
it wouldn't be before too long and someone would own the entire
world. I know this is off topic is labeled as such, and while I know
some of the most experienced members of this list know these facts
already. This is for anybody who just starting in the business and
will be attracted to those who are bragging about their profitability.
Anytime someone claims profitability make them show you an audited,
make that an independently audited track record of their trades. If
they can't afford to have someone audit them and maintain those records
on a monthly basis for public viewing. Then I would suggest
that you stay clear of them completely.
PS it is acceptable for a person to display and talk about
hypothetical performance without an audited record but it must be
represented as that. that hypothetical track record must be
accompanied with the proper risk disclosure statement which makes you
the consumer aware of the possible risk. I have neither seen any
offer of an audited track record nor any posted disclosure statement on
this list, by those who are claiming to actually have been making
these trades.
--
Best regards,
Mark Brown mailto:markbrown@xxxxxxxxxxxxx
Y = Offset + Amplitude * sin(Frequency * X)
|