Seize the Day

I "made" $500 yesterday by picking up the phone and holding Schwab to a promise that I had wheedled out of them in February.

As readers of this blog know, I decided in January to start trading again, the investment advisers having failed. (I having failed 8 years ago myself in the "little" world I set aside for trading.)

After opening my account and trading a couple of weeks in February I saw an ad on CNBC which said anyone who is an active trader who opens an account gets 50 free trades, whereas each trade is normally $8.95.

So I called Schwab then and talked to someone who, after some skirmishing over a "slippage" matter that cost me $400, agreed to give me that 50 free trades as soon as I put the minimum $25,000 into my account.

Then I lost my notes of the telephone call and nothing happened although I did put the $25,000 into the account.

Last night as I was preparing to go out I flipped on CNBC and saw the same ad. I called Schwab and explained the situation. After checking my account the good guy said "You've got it."

Pay attention to those ads. Seize the day!

Why Is It...

that major profitable "games" played by Big Money (yours and mine loaned to them) are never revealed to the public until the games are about over?

The Japanese Yen Carry Trade.

Now: Sell Financials, Buy Oil.

And when they are revealed, it is as though the CNBC analysts knew about them all the time.

CNBC

On the topic of CNBC, one of the inherent weaknesses is You don't really know what the interviewees are actually doing, or what their institutional constraints are. Going short on things they can't say?

Although it's a lot better than it used to be, say in the late 1980's.

There's an ad for a seminar showing people sitting in an auditorium soaking up some guru who is pointing to a chart of something. One audience is shaking his head as though he got some important point. These seminars are worthless and they charge $1000's of dollars for the weekend.

"See that dip, that's where we buy!" Oh, yeah. What about if we change the parameters. Say 30-minutes rather than 15 minutes.

It's like looking at the US coastline from a satellite. Looks a lot different
than if you're walking the beach in North Carolina.

Cramer -- Another Summary of What Went On

Click on title above, or cut and paste the following.


http://www.businessandmedia.org/printer/2008/20080317110946.aspx

More on the Cramer "Call" on Bear Stearns That Was Misinterpreted

F. Bruce Abel (c) 2008

The quote that appears in smaller print below is not my post nor my sentiments exactly. I believe that the only person one can "sit at home, watch TV, and actively trade stocks" off of is Cramer, but that probably involves the following caveat: it must be using either other people's money and/or you must have $2,000,000 of your own free money to spread around without going nuts on any one position.

But the issue he raises is core, as it goes to the viability of what CNBC and Cramer does.

Since I spent the better part of three years trading off of CNBC in the late 1980's I will be writing a lot on this topic.

As your curiosity rises and if you must know, I'll only say:

One still gets a big kick following CNBC MINUTELY EVEN WHEN ONE HAS NO DIRECT MONEYS TO INVEST BUT IS/HAS RECREAT[ED/ING] A NEW PLAINTIFF'S LITIGATION PRACTICE.


Now, this other guy:

Posted: 26 Mar 2008 03:19 AM CDT

Last week I showed you a widely-distributed video of CNBC stunt-host Jim Cramer loudly gesticulating to his Mad Money fan base that Bear Stearns was "fine" and that "Bear Stearns is not in trouble".

The day was March 11, Bear stock was trading at $62, and Bear immediately blew up.

Several members of the Cramer fan base promptly emailed me and said, no no no, Cramer explained that he was just saying that you shouldn't move your money out of your Bear Stearns brokerage account. Which is a little odd, given that Bear was primarily a hedge fund prime broker and not a consumer broker, and Cramer's show is aimed at regular folks, a.k.a. consumers. However, it is possible that his defenders could have a point.

Except they don't.

On the very same day, March 11, Cramer also recorded a different video (not embeddable, so just follow that link) on TheStreet.com in which he explains in detail how Bear the company is "totally solvent; there's not an issue; Bear is not in trouble, I want to make that point vociferously".

Oh well.

I will give Cramer's fans credit for one thing -- he is highly entertaining. Although frankly I'm still not sure how he's ever going to top confessing publicly to securities violations last year. One can but hope.

Why am I being mean to Cramer? Two reasons.

First, his whole approach is fundamentally fraudulent. You can't sit at home, watch a TV show, actively trade stocks like Cramer says, and make money. At best you're going to badly lag the indices, and in the process unduly enrich your brokerage firm, the tax collectors, and -- yes -- CNBC and Jim Cramer. Cramer's show is just another stupid tax, like a state lottery, or cigarettes.

Second, he says he likes it (fast-forward to about 3:15 and watch to the end).

As a side note, I may not be able to embed TheStreet.com videos, but I sure can embed Jon Stewart's take on Cramer's Bear Stearns call -- just fast-forward to 4:40 or so:

That ends "the other guy's comments."

I do agree with the first part of his last substantive paragraph, except...[more later, though don't expect me to say that I did it successfully].

By the way, I have earlier blogs on this guy's rampage, and I do believe I was able to incorporate the John Stewart clip.

Also, I think this guy is missing another point: Cramer was talking about people who had creditor money with Bear, not just stock traders, I believe.

Best CNBC Day Ever?

Listening right now to hour with Boone Pickens. And this is the third or fourth segment today, on different topics, which have been excellent. Including the new Free Swim segment which is like throwing raw meat into the shark tank. The first topic of ETF's was an excellent starter but the showmanship took away from the informative part. But there were some gems and I TIVO'd everything as I do all day.

Dillon Radigan's PG&E Goof on CNBC Yesterday Morning on Trader's Edge

Went on and on. Interviewed two utility experts on and on for five minutes or so.
Not corrected until 3:30 pm.

More later.

Fidelity's Ads on CNBC

There is an ad that has been running on CNBC for over a month which implies that backtesting is a worthwhile exercise for projecting methods for future investment. The regulators should step in. That type of statement is totally misleading, as experience of all traders realize.