Dear rss free blog,
Hot
off the wires: France like Britain will tax financial companies
paying non-contractual (voluntary) megabuck bonuses this year. And
Goldman Sachs (and German banks which listen to Angela Merkel)
will pay bonuses in stock recipients must hold for 5 years.
Our
Sutton Place apartment, already zapped by the fact that two Galleon
insider traders live on our street, has just lost another chunk of
its resale value. I am trying to figure out how to continue to
receive the Financial Times without “How to Spent It” and
The Wall Street Journal without the weekend conspicuous
consumption sections and The New York Times without all those
inserted ad flyers.
Three
apologies today as your Chanukkah gifts. First, we rent lists to
ADVFN, a British financial website which sometimes advertises here.
Yesterday
I got from them by e-mail a frenzied stock tip for a pink sheet
stock, Force Energy, FORC. This was sent by Scott S. Fraser who
apparently again is publishing a formerly banned stock advisory
called The Natural Contrarian.
As
ever, Fraser makes improbable claims for the performance of his
micro-cap stock picks in the ADVFN e-mail and the linked
click-through newsletter. In fact he is paid for promoting stocks, as
is spelled out in the fine print in his ads.
But
what is not spelled out is that six years ago, Mr. Fraser was put
under a US Securities and Exchange Commission “cease and desist
order” over promoting his publications using overstated (or
invented) performance claims in the triple-digits for prior stock
picks.
To
judge from his latest global e-blast from the U.K, Mr. Fraser
apparently found it hard trying to earn his living in a different
line of work. Britons live across the Atlantic Ocean far from Mr.
Fraser’s country. Like ADVFN they might not check on an advisor’s SEC
record.
We
live in a global financial market joined up by the Internet. I
figure most readers know that no analyst makes over 100% on every
pick. But just in case you are tempted by FORC, look at the
bid/ask spread. And
then ask yourself whether anyone that good would sell you his
newsletter for only $49 per year.
Now another apology.
Beware
my decimals! I wrongly figured the commissions a broker would charge
for the Covestor trades. The numbers were also run past the Covestor
liaison.
And
every reader but one believed the numbers. All over the world,
investors, analysts, reporters, fund managers, brokers.
Only
clever Canadian reader MF spotted that I underestimated what a 5%
return is on $5000: not $25 but $250. That is actually the good news.
I’m too old to figure percentages on a calculating machine; I do it,
badly, in my head. And let the decimal points fall where they may.
The
bad news, shared with me by Covestor after queries from reader SR,
another skeptic, and me is that besides the brokers’ commission,
Covestor charges a 1.5%/year fee which I failed to mention to reader
CJ as I did not know about it. Of that, 1.2% goes to my company. As
fees go, this is modest.
Moreover,
if you place money in your account and do not invest it (why do
this?) there is a $12.50 monthly fee which goes to Covestor itself.
Covestor explains: “We are providing a service for you and your
subscribers. We are also opening up distribution to a global
marketplace. We are certainly entitled to a fee for this service. We
are obviously in business to make money, but unlike mutual funds, we
are completely open and transparent regarding our fees.”
While
the minimum Covestor placement in any guru account is $5000 you have
to put a total of $10,000 overall into Covestor, half of which you
may place with a different guru.
SR
also noted that the top five current GI stock picks are viewable on
the Covestor site. Their explanation:
“On
your profile page, we show your top 5 holdings as well as recent
trades. The data is delayed. He cannot view your entire portfolio,
nor does he get the auto-replication. The purpose of showcasing this
data is to help market your model and attract subscribers.”
The third apology is only for paid subscribers.
Tonight
is begins the 25th day of the Jewish month of Kislev, the
first night of Chanukkah. (The ch is pronounced like the one in Loch
in Scottish.) As you can see, 25 is a good number at this time of
year.
(C)happy
Chanukkah to all who celebrate the defeat of tyranny by a small band
of Résistantes, like
Handel and the 7% of African American Protestants who apparently
attend synagogues (according the the WSJ weekend supplement of
today). You can put out your candelabra or a Chanukkah evergreen
and wait for the Chanukkah Mensch to slide down the chimney
and give good children presents. A Mensch is a good person. In my
childhood we did not have a Chanukkah tree but I was told about the
Mensch by my German-born
mother. Jews also play a gambling game I will be happy to
teach to any African American (or other) Christians I spot at
synagogue tonight; because it is also the Sabbath no money can change
hands.
