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At 10:09 AM 8/31/2001 -0500, Robert wrote:
>It is quite simple. My source inside TRAD is telling me that they are being
>told to stop thinking of TRAD as a software company and start thinking of
>themselves as a brokerage firm.
But this is so dumb! I heard someone saying Omega has "rear view mirror
vision". Well, this is it. I don't fault them for getting into brokerage,
but they shouldn't dump their core business model to get it. In fact,
getting into the brokerage business is precisely why Omega should continue
to improve and remain in the software end more than ever before. It's
their software that will give them an edge. If they believe that the money
will simply roll in ad infinitum by becoming a brokerage firm, then they
are ignoring a basic rule in economics: easy entry for competition to the
point of saturation. That's why there are tons of retail direct-access
brokerages with diminishing profits, as we move farther away from 1999.
>There are three basic profit centers in this
>business, software(smallest), data provider(middle) and brokerage(largest).
>TRAD wants to be a brokerage firm which has the potential to make the most
>money in the long run.
To do this they must offer something more software-wise. In other words,
keep and improve their core business, which is software, and expand into
brokerage. Let's face it, fast order routing, level II, and big short
lists are features many other brokerages now offer. Right now they simply
threw in EL because its was already there and it's a good advertising
tool. But it's not enough if they are going after institutions. You need
all the support features like portfolio analysis, chart scanning,
statistical analysis, and the ability to warehouse large amounts of tick
data, including the bid and ask, and manuals.
>If you want to predict the action of TRAD ask
>yourself what would a brokerage firm do next not waht would a software
>company do next. This means if you do not open a brokerage account with TRAD
>then you can drop dead as far as they care.
My prediction is that they will realize they were stupid and will get back
into improving their software technologies to lure in more trading accounts.
>Robert Holt
>
>----- Original Message -----
>From: "Tim Tillson" <timtillson@xxxxxxxx>
>To: "Clyde Lee" <clydelee@xxxxxxxxxx>; "Bob Fulks" <bfulks@xxxxxxxxxxxx>
>Cc: <omega-list@xxxxxxxxxx>
>Sent: Friday, August 31, 2001 8:57 AM
>Subject: Omega's got religion
>
>
> > Bob's summary is brilliant, one for
> > the business textbooks!
> >
> > It's as if Omega suddenly got the internet religion,
> > and are shedding all their valuable worldly posessions.
> > The only problem is that, this particular space ship
> > launched for the heavens some years ago, and blew up
> > in flight.
> >
> > What can they *possibly* be thinking??
> >
> > -Tim
> >
> >
> > ----- Original Message -----
> > From: "Bob Fulks" <bfulks@xxxxxxxxxxxx>
> > To: "Clyde Lee" <clydelee@xxxxxxxxxx>
> > Cc: <omega-list@xxxxxxxxxx>
> > Sent: Friday, August 31, 2001 7:26 AM
> > Subject: Re: NeoTicker (was Re: EL to VB translator)
> >
> >
> > > At 9:34 PM -0500 8/30/01, Clyde Lee wrote:
> > >
> > > >Don't be in too big a hurry to scratch Omega/TRAD as I have yet to
> > > >find anything that allows me to develop ideas as easily as in
> > > >TradeStation.
> > >
> > > I agree. Too bad the supplier of the product is killing it.
> > >
> > > Picture this.
> > >
> > > You have a company that is selling a product that has turned out to
> > > be the industry standard for developing and testing trading systems
> > > and indicators.
> > >
> > > The original architecture of the product was very clever and was
> > > nearly perfectly matched with the customer's problem so it became the
> > > platform of choice over many years.
> > >
> > > In spite of totally abysmal quality control and horrendous customer
> > > service, you still have a virtual monopoly with no competitive
> > > product anywhere close to the same capabilities.
> > >
> > > There are thousands of programs available to customers written in
> > > your proprietary language that customers can easily get to experiment
> > > with.
> > >
> > > The market is growing since more and more people are understanding
> > > that the buy/hold mentality that worked for the past 20 years isn't
> > > working any more. They want more active management of their money and
> > > most now have personal computers.
> > >
> > > All brokers would love to be able to provide such a tool to their
> > > customers and would gladly provide an interface between such a tool
> > > and their order entry system.
> > >
> > > You would think that anybody who had such a company would "think he
> > > had died and gone to Heaven".
> > >
> > > But no. They decide to throw all that away and become an on-line
> > > broker, trying to compete with well funded giants such as Schwab,
> > > Fidelity, Ameritrade, etc., all of whom happen to be laying off
> > > people by the thousands.
> > >
> > > By deciding to compete, they cut off potential sales through all
> > > existing brokers who could have been a massive sales force promoting
> > > their product.
> > >
> > > By discontinuing to sell the product, they force all customers to
> > > start looking for another product - no one want to be stuck without
> > > support. This also cuts off the only existing source of revenue.
> > >
> > > This also sends a clear message to potential suppliers that the
> > > customer base is up for grabs so potential competitors redouble their
> > > efforts.
> > >
> > > Someone must have a death wish...
> > >
> > > TRAD stock is again near it's all time low of about $2.50 so the
> > > stockholders are voting - with their feet...
> > >
> > > But perhaps we are missing something and this is really a brilliant
> > > strategy in disguise...
> > >
> > > Bob Fulks
> > >
> > >
> >
> >
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