The other morning, I had just finished feeding the horses and the dogs started barking. Now, I know their barks, and I can usually tell which bark means what. For example, they have a distinct pitch and sense of urgency when a human comes onto the property, and they have another “sound” when a squirrel up in a tree is teasing them. The other morning, their sound had an urgency with which I was not familiar. Included with the high pitch “whining” was a guttural, low volume growl. This caught my attention so I took a look in the direction they were looking and there was a coyote meandering back and forth, oh, about a 150 feet away, just on the other side of the fence. Back and forth that coyote moved, as if he were taunting the dogs. Mind you, our dogs wear radio collars so they are electronically bound to a 360-degree circle with a 180-foot diameter. But even with this, they sometimes run through the shock if an animal such as a deer teases them. Knowing this, I immediately took them inside, pulled out a .22 rifle and went out to shoot at the coyote, to send him the message, “Stay away!” Well, by the time I got back outside, he was gone. As I watched that spot in the canyon, looking for him, something occurred to me – that coyote was trying to lure our dogs up into that canyon. That coyote was hunting our dogs. More than likely, the rest of his pack lay hidden somewhere in that canyon.
I told you that story because it reminds me of the many emails I get from “pump and dump” solicitors out there in the Ethernet. “Stock Alert – Buy this stock now, today, as it has risen 300% in the last 24 hours. Get in now to capture big gains, and on and on …” For some reason, I am getting more these days. Somehow, my email address got on a pump and dump distribution list. I suspect I know how it happened, but that is irrelevant to the point I want to make today.
The world of trading is metaphorically similar to the offbeat place in which I live. I love being here, but I need to be vigilant, careful, and ever wary of the potentially harmful creatures that live out here as well. If I am not, bad things can happen and it would be no one’s fault but my own. This is the similar to the world of trading.
In the world of trading, the “coyotes” live as well, and although rarely seen, I know they are out there just waiting to lure me, or you, up the canyon where the rest of the pack awaits. Pump and dump solicitors are bad creatures (raccoons, maybe), perhaps more annoying than dangerous, but if one is not wary, they can bite. No, those bearing greater similarity to the coyotes are the big-money scammers and inside traders that manipulate markets, turning a well-planned, well-executed trade into a “What just happened?” moment. My guess is, like the coyote, we have to learn to live with them. However, sometimes the bad creatures get out of control, and instead of firing warning shots, we need to shoot to kill. This is why we have the SEC …
The biggest Wall Street insider trading criminal case in a generation goes to trial on Wednesday, when prosecutors open their case against Galleon Group founder Raj Rajaratnam whose arrest 16 months ago shook the hedge fund world. A jury of New Yorkers will hear prosecutors outlining how they believe Rajaratnam broke the law by designing a complex web of stock tippers who helped him reap $45 million in illicit profit between 2003 and March 2009.
Unfortunately, this manipulator, and a host of others out there, are too big to kill with my .22, or 12-gauge for that matter. Fortunately or not, we all need to depend on the SEC for taking these out-of-control creatures down. Go SEC go!
Trade in the day – Invest in your life
