Re: [RT] For newbies

["Jim White" <jwhite43@xxxxxxxxxxxx>]

Bob,

Generally I agree with the content of your post, especially concerning those methods that are actively sold through mass advertising or direct mail. However, there may be legitimate reasons for making a new technology available to others. Have you ever heard of The Prediction Company? After developing a superior trading methodology based on nonlinear dynamic modeling, this group of scientists sold it to a major bank. This group had divergent interest and wished to pursue other activities. (Read "The Predictors" by Thomas Bass.) Was this a legitimate reason to sell?

Let's take another example. Active traders know that it is a time consuming and often stressful occupation. Suppose an individual developed an outstanding methodology and traded it successfully for a number of years before being advised, for health reasons, to reduce his activity. Would the desire to extract a stream of income from the methodology without the day-to- day trading activity be a legitimate reason to sell it to others?

And there is the issue of scale. Suppose the same individual above traded a six figure portfolio successfully for a number of years using a break-through technology. Then he was offered an opportunity to apply it to a hundred million dollar fund. Would it be a legitimate reason to sell?

So, perhaps you can agree that there may be legitimate reasons for making new technology available to others. As always a buyer should exercise due diligence but it is the value of the product which should be questioned - not the motivation of the seller.

 

Best Regards,

 

Jim

----- Original Message -----

From: BobsKC

To: realtraders@xxxxxxxxxxxxxxx

Sent: Tuesday, March 27, 2007 11:18 AM

Subject: [RT] For newbies

Some time ago, I changed the rules on our list to allow advertising as long
as it didn't get out of hand and there was no pumping. I am pleased to say
that it has not gotten out of hand and has been minimal and
professional. Still, it is only a matter of common sense to think about
trading systems and stock picking systems. If the person promoting their
product really had a holy grail of trading, why would they need to sell it
to you? Put another way, if you have the combination to the safe, why sell
it to someone else? Just go in there and get all the gold you want, when
you want. Selling the combination only puts people in your line of access
and redefines how much gold there is to split since nothing is in endless
supply.

Having said that, I do not doubt the validity of those who are trying to
sell trading systems. I only doubt the need to do it if their systems work
so well. You should ask yourself these same questions before you begin
writing checks.

Hope everyone has a great trading week.

Bob

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