THREAD IS CLOSED! --- Bob Brinker Free Discussion Site 11K+

Top 5124. Jan 2, 2001 1:46 PM

» ACousins - Re: Re: Re: Re: This is not the way to go...

In response to message posted by walkerman:

Walkerman, wrong again. I didn't bring up the legal issue and I never said to sue anyone for bad advice. If someone wants to do that, it's up to them. If they have a point and can win it then that's kudos to them.

I am a strong proponent of laws and lawsuits to keep errant businesses and individuals (also cows, horses and dogs) from running amuck. I guarantee you that they will if there is nothing to hold them in check.

You can sue anyone for anything which is the beauty of our legal system. The bad part of our legal system is that it also runs amuck at times.

What I don't like is this idea of being able to say anything at anytime and it's the listener's full responsibility to know if you're lying, stupid or just wrong.

We would all be better served by stricter laws and regulations that limit (or hold someone accountable) about what can be legally said when it comes to investments. From these kinds of rules come prospectuses, disclosure laws, conflict-of-interest rules and the like.

Net, net we get a better system for everyone but the charlatans.

Heck, we have packaging laws that force you to state the contents of food. We have advertising laws that force you to live up to your ads (see Kirk and his point about MSN). We have disclosure laws to protect you when buying a house.

What's wrong with laws and regulations that protect investors by making advisors liable for misinformation or lack of information?

-- posted by ACousins

Top 5125. Jan 2, 2001 1:51 PM

» ACousins - Re: Re: Re: Re: Re: Re: Not the same

In response to message posted by Will_L:

Will_L,

We'll just have to aggree to disagree on that one unless someone can find the reference. I'm pretty sure it was 300K. Was on a DateLine or one of those types of shows.

I hope your wife is ok.

-- posted by ACousins

Top 5126. Jan 2, 2001 1:55 PM

» Kirk - Re: Advice liability

In response to message posted by ACousins:

What's wrong with laws and regulations that protect investors by making advisors liable for misinformation or lack of information?

We HAVE these laws. Newsletter writers are just giving opinions just like the guy on TV saying he likes internet stocks or someone on TV saying he like brandX of beer. People pay to have access to these opinions before others. Nothing special about giving opinions.

I pay about the same for my local newspaper (San Jose Mercury News) as Brinker charges for his newsletter. I've never heard of suing some writer in the financial section for saying they like a company even after the company tanks.

IF you want accountability, then you get someone with a license and a fancy plaque and pay by the hour or trade with a contract and such... Even then, the big investment houses have been known to churn accounts to generate more commissions than gains for customers.

-- posted by Kirk

Top 5127. Jan 2, 2001 1:57 PM

» Will_L - Re: Re: Re: Re: This is not the way to go...

In response to message posted by walkerman:

Though I've said anyone who jumps on such a flakey trade should not be whining to the legal system, I'm not sure your analogy of a mutual fund going down is an appropriate analogy. Did not the mutual fund have to send you a perspectus outlining the risk? Ever hear of a mutual fund sending you an unmarked envelope with an urgent message to send us 30 % of your money so we can buy QQQ's "immediately" and not have anything about risk in the "perspectus" but instead talk about a 20 % gain in a couple months?

No I think it is more akin to a broker suggesting strongly to elderly client who trust him to take their money out of a C/d and invest in tech stocks. Though the clients do so willingly, many brokerages have had to make good losses when a debacle like this one happens.

At any rate I have to smile at Mark's attempt to make it sound like these trades have evened out. Boy now that's a stretch that I'm sure many involved in it now would argue.

-- posted by Will_L

Top 5128. Jan 2, 2001 2:05 PM

» ACousins - Re: Re: Advice liability

In response to message posted by Kirk:

Newsletter writers are just giving opinions just like the guy on TV saying he likes internet stocks or someone on TV saying he like brandX of beer

Then under these circumstances, anyone can say anything about any stock. What about that kid who bought penny stocks then went on the internet to flog them. When they rose a bit, he sold and went on to another penny stock.

He made about $500K. His parents were very proud. I think he was found to be doing something fradulent and illegal but was able to get off with a fine.

Isn't this the same thing but in a slightly different venue? This kid could say he really thought these penny stocks were great and he had no reason to disclose his interest.

Hey, what about my popsicle stick ladder? Is that ok?

-- posted by ACousins

Top 5129. Jan 2, 2001 2:15 PM

» nildesperandum - Re: Re: Re: Advice liability

In response to message posted by ACousins:

When do you feel it will be time to buy into the s@p again? Are we there or is t getting close?
Dave

-- posted by nildesperandum

Top 5130. Jan 2, 2001 2:19 PM

» Rande - Better be very careful about making accusations of illegality wi

Better be very careful about making accusations of illegality without a knowledge of the applicable laws and the facts to back it up. There's a clear line between such behavior and run-of-the-mill belly aching.

-- posted by Rande

Top 5131. Jan 2, 2001 2:22 PM

» SLO219 - Hi all

In response to message posted by Kirk:

Kirk,

You have mischaracterized my post. The Rydex funds that I mentioned are not "hedge funds" in the manner that you've mentioned. They are funds designed for investors who want to hedge their portfolios. The hedge funds that you indicated are high risk ventures that use derivatives for turbo charged performance REGARDLESS of market direction. Thus, they are NOT really hedging. Many have been disasters. The funds that I've mentioned, are direction specific. For example, a $100,000 portfolio of the Qs could be hedged for about $50K in the Rydex Venture. This advice is designed to get to a market neutral position in the short term. If a clear market bottom is reached, the Venutre fund could be sold at a profit and the Qs held longer term. The idea of shorting selected high P/E stocks is also in keeping with a hedge strategy. I posted this in the Brinker board when the Qs were considerably higher. I have been following this strategy myself. To reiterate my suggestion... use the Velocity fund to average down the Qs and/or use the Venture fund to stop some of the loss in the Qs; selectively short A FEW of the highest P/E tech stocks that you can find. The shorts would partially offset the Q position. The PEG ratios are probably now misleading since they rely on a growth rates which will not be achievable in a deteriorating economy. Note that the stocks moving up today had low P/Es... AMAT, WCOM, etc. The NAZ is a busted bubble and one should behave accordingly.

I do not believe that this is a major gamble. In fact, I think that it is a prudent strategy. The current problem with the Brinker recommendation is that it deviates from his relatively conservative approach and has forced his subscribers to take uncharacteristic defensive measures. At this point, given the decline in the NAZ, the best strategy would seem to be DCAing into the Velocity fund and continue a few selective shorts. Using the Venture fund (the short fund) is probably a bit late in the game at this point. Simply selling the Qs now without a defensive strategy would commit to a loss that is likely to be partially recoverable. Also, the strategy would allow the paring off of Q sales with the hedge sales thereby reducing some market exposure and perhaps assisting in tax planning. The idea here is to reduce risk and preserve capital... it's not to gamble. There are ways of recovering from market blunders.

-SLO219

-- posted by SLO219

Top 5132. Jan 2, 2001 2:23 PM

» ACousins - Re: Better be very careful about making accusations of illegalit

In response to message posted by Rande:

I agree but we're just expressing our opinions here so there should be no problems. Isn't that correct?

-- posted by ACousins