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Long Live Freedom of Expression.

ism

> -----Original Message-----
> From: I. STEPHEN MARGOLIS [mailto:[log in to unmask]]
> Sent: Monday, February 01, 1999 1:58 PM
> To: St. John's University Cerebral Palsy List
> Subject: Serendipity?
> Importance: High
>
>
> I'm working on getting my email format and WAB sorted out.
>
> Found the article interesting given that I wear the "Day Traders"
> hat.  Been there, done that.  Never claimed to be unique.
>
> Let's see if experience and determination make a difference.
>
> Why the CP List?  Because I've CP'd all my life.  And I've got an
> appetite for wealth too.  Am trying to show this too's within the
> realm of doing, CP or not.
>
> If you try this: Go slow.  Be careful.  Good luck and success.
>
> ism
>
> To: St. John's University Cerebral Palsy List
> Subject: Serendipity
>
> January 29, 1999
>
> Want to Make a Killing? Day Trading Isn't the Way
>
> By JASON ANDERS  THE WALL STREET JOURNAL INTERACTIVE EDITION
>
> Lamar Cook was tired of watching everyone else make money.  As a
> regular participant on Silicon Investor, an online stock
> discussion Web site, he had read countless success stories about
> day trading -- a trading style that involves rapidly jumping in
> and out of stocks, sometimes dozens of times a day. So one day
> last October, Mr. Cook, home sick from his construction job in
> Gadsden, Ala., decided he could wait no longer. Using his online
> trading account with Waterhouse Securities, he spent the day
> buying and selling two stocks several times for a profit of $800.
> "I thought it was the easiest thing in the world," he says.
> "Until the next time I did it." Just two days later, Mr. Cook
> again stayed home from work and day traded -- and lost a
> staggering $9,000. In a panic to recover some of his money, he
> tried to buy another stock for a quick flip, and lost another
> $2,000. "My wife and I lost two years of our savings," he said.
> "It was horrifying." Raising Eyebrows The growing popularity of
> day trading has drawn scrutiny from securities regulators, who
> fear investors are getting in over their heads. On Wednesday,
> U.S. Securities and Exchange Commission Chairman Arthur Levitt
> said he is alarmed by the increasing popularity of day trading,
> and warned investors that rapid-fire online buying and selling
> can be dangerous. Massachusetts has cracked down on alleged
> misrepresentations and other abuses by firms that offer office
> space and computer equipment to individual investors for day
> trading. "Our primary concern is novice investors getting
> involved with day trading," says Matthew Nestor, chief of
> enforcement of that state's securities regulations. "We want to
> make sure that the risks that are involved in day trading are
> disclosed. Unfortunately, people think that day trading is easy,
> and anybody can do it." Still, new Web sites offering hot
> day-trading tips pop up all the time, and online message boards
> buzz with stories about the fast money to be made in day trading.
> A new board on Silicon Investor (www.techstocks.com
> <http://www.techstocks.com>) called "Are you considering quitting
> your dayjob to daytrade?" has drawn hundreds of posts in the last
> two weeks. And business is booming for firms that teach people
> how to day trade. Trader's Edge, in New York, says there is a
> two-month waiting list for its day-trading seminar, which costs
> $1,495 for a weeklong course.
> Want to receive an e-mail alert when Heard on the Net columns are
> published? See the E-Mail Setup page
> <http://interactive.wsj.com/user-cgi-bin/searchUser.pl?action=emai
> lalert> for details on how to subscribe.
> "We've gotten a lot of calls from people saying they've decided
> to day trade full time," says John Markese, president of the
> American Association of Individual Investors. "They have $50,000
> and they want to work it up to a million by the end of the year."
> Mr. Markese says such callers always ask him about what sort of
> computer equipment and software will be necessary, but he says
> they never ask about the risks involved. "To them, it looks like
> easy money," he says. But it's anything but easy, says Tim
> Stefanich, a well-known participant on Silicon Investor and a
> full-time day trader. "These people don't understand the risks,"
> says Mr. Stefanich, who trades from his Los Angeles home. "The
> hype of the Internet stocks is bringing people in. These people
> are gambling, they're not investing and they're not day trading."
> Mr. Stefanich says he frequently receives electronic-mail
> messages from message-board participants looking to get started
> in day trading. He says that most investors he talks with don't
> understand that day traders often have to risk large sums of
> money to eke out a profit. They buy and sell large blocks of
> shares to take advantage of a price move that can be as little as
> a few cents a share. And day trading is expensive in other ways,
> too: Mr. Stefanich uses thousands of dollars in computer
> equipment and subscribes to a real-time trading system that
> allows him to execute most of his trades in just two seconds. He
> says many of the claims he sees on message boards about big
> profits in day trading are overblown, and says the notion that
> anyone would quit a good job to day trade is "completely insane."
> "I do this full time, and I think I have as much experience as
> anybody. And I still have days when I lose a lot of money," he
> says. Sticking With It But even some investors who understand the
> risks of day trading say they're drawn in. Tara Rill took a leave
> of absence from her job as a sixth-grade English teacher in order
> to day trade and, although she hasn't made a profit, says it
> doesn't look like she'll be going back. Ms. Rill says she first
> noticed discussions about day trading on message boards about two
> years ago. After five years as a teacher in Gainesville, Fla.,
> she was looking for a career change, so she started reading up on
> day trading. Last summer, she decided to take the plunge, and
> after a $1,200 day-trading course she went on leave from her job.
> Ms. Rill was attracted to day trading's fast pace, but says so
> far the going has been slow. She is aiming for at least one trade
> a day, though there have been some days when she hasn't traded at
> all. And day trading hasn't been profitable for her; she
> estimates she has about as much money now as she started with.
> "You have to go about this in a very serious way. It's not like
> you're taking a vacation to gamble in Las Vegas," she says. "I
> thought long and hard about it because I knew I wouldn't make any
> money for a year at least." As for Mr. Cook, the investor who
> lost his savings, he says he still wants to start trading again
> as soon as possible. He says he's done with day trading, but says
> he still plans on quitting his job to invest in the stock market
> full time. "I figure I can let it beat me, or make me better," he
> says. "I'm going to go for it."  Write to Jason Anders at:
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