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Hip! Hip! Hooray! Anyone remember who we're boycotting today?
By Kevin Kelleher
Boycotts are more effective than ever -- but the public's role in them is becoming increasingly irrelevant
(08/07/98)
The economy of fake fat
By Heather Chaplin
Olestra: the oil that leaves you running for the bathroom
(07/31/98)
Farmers of the American Dream
By Carol Lloyd
Financial infomercials promise "free money," but what they're really selling is their faith in your "potential"
(07/24/98)
Glutton for luxury
By Heather Chaplin
One woman's necessity is another woman's excess
(07/17/98)
Our watches, our selves
By Robert Bryce
As the economy keeps on ticking, the watch industry sells the daze of our lives
(07/10/98)
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Regardless of what prosecutors and other detractors say, though, Wade Cook has found a sure-fire way to make money. Wade Cook Financial Corporation (WCFC), the holding company for the Wade Cook empire, reported 1997 revenues of $104 million, primarily from sales of seminars, books, audio and video materials and subscriptions to its Internet bulletin board, WIN. During the same period WCFC lost more than $800,000 trading stocks and options.
"Funny how the greatest super-investor in the world managed to lose money in the biggest bull market in history," chuckles Gary Wall, a longtime investor and one of Cook's most vocal critics. But WCFC general counsel Kiman Lucas insists that that $800,000 was an "unrealized loss" only -- even though WCFC's own press release puts the unrealized portion of the loss at $600,000, leaving it with, at minimum, $200,000 in real losses. Lucas also claims that "the stock market was way down Dec. 31," making balance sheets look worse than they were. In fact, at that point, the Dow was up 1,465 points for the year. WCFC had lost in a market that had made most investors feel like natural winners.
While veteran traders often exchange such information through the Internet, the inexperienced investor has no easy way of gathering such cautionary tales. To them, Cook's promises must seem irresistible. In his book, "Stock Market Miracles," for instance, Cook says that, after attending the Wall Street Workshop and investing just $2,000 to $5,000, people can make from $5,000 to $8,000 per month. "That's per month," reiterates Cook's text. "And they're only working 15 minutes a day, two or three days a week."
I asked professional day-trader Toni Turner of Sarasota, Fla., who spends nine hours a day researching companies, analyzing charts and watching dozens of market indicators, whether she thought such returns were possible from relatively tiny investments of time and money. After she stopped laughing, she answered with a discreet, "Highly improbable."
But one of the market's best-respected technical analysts displayed less sense of humor. When asked to comment on the validity of this and some of Cook's other claims, he abruptly ended our interview with, "My stomach is churning. Please don't put me in the same sentence with this guy."
Wade Cook insists that the Wall Street guys just don't get it, and has an answer for such nay-sayers in another of his bestselling books, "Wall Street Money Machine," where he writes that stock market pros are "wedded to stodgy, boring and risky methods."
Stodgy isn't a word that comes to mind when describing Oliver Velez, the 30-something, Levi's-clad president of Pristine Capital Management, a well-respected company that trains high-rollers for six to eight months before setting them loose to day-trade solo. Unlike Cook, who tells novices that they can get in on the action with as little as $500, Velez believes that a bit more is necessary. "Even $100,000 at times proves not to be enough," says Velez.
Velez also disagrees with Cook's promise of instant returns. "We feel that an individual should understand that, for at least six months to as much as 12 months, the individual's going to lose. There's a learning curve to overcome."
While Velez is low-key in his criticism, Gary Wall has no qualms about blasting the former cabby. "Professional investors dismiss Wade Cook as a fraud," says Wall.
Yes, in this, the great bull run, more than one predator hunkers in the bushes, waiting to pick off the herd's least informed.
Almost as flashy as Cook, and with equally dubious credentials, is commodities guru Ken Roberts. His seminars reportedly draw hundreds at a time -- typically, the same type of under-funded neophytes Cook attracts.
"If there's anything more self-destructive than trading options on margin," says Wall, "that would be going into commodities."
While options can expire worthless, wiping out your entire investment (or double that, if you bought on margin), in commodities trading, you can lose -- almost instantly -- a lot more. "If you have a $10,000 account, you can buy $100,000 worth of a commodity," says Velez. If the commodity's value drops by, say, 50 percent before you can sell it, you not only lose your original investment, you owe the difference -- another $40,000. Unlike the stock market, where you can sell at will, in the commodities market you can be prevented from selling, under certain market conditions, as your investment's value drops ever lower.
Yet, in seminars around the country, Ken Roberts assures rookies that they can play and win, with a stake of as little as $2,000. For this, Forbes magazine calls him a "commodity shark," noting that profits from his seminars figure in the tens of millions and have allowed him to build a mansion complete with cigar room. "But where are the customers' mansions?" the magazine asks. The British e-zine Applied Derivatives goes further, saying of Roberts' strategies, "This information is so rudimentary that to entirely rely upon it in the current marketplace is little short of blind stupidity."
It's easy to understand the appeal of the Cooks and Roberts of the world, though. They embrace the masses, who have small bankrolls but big dreams, when others ignore them. Unfortunately, as Velez says, "The markets have been designed to ensure that the masses lose. That's the only way they work."
Which brings me back to my fellow attendees. Toombs, the would-be playwright, says he lost 41 percent of his $10,000 trading account. The Yankopolises tell me they lost it all -- more than $15,000. And what about 11-year-old Amanda? Her parents decided against opening a day-trading account for their child. They have leased her a horse and enrolled her in a riding academy. Right now, she might be in jodhpurs and helmet, off for a pleasant canter -- a far preferable alternative to the wild ride taken by so many of the grown-ups at the Wall Street Workshop.
SALON | Aug., 21 1998
Anita Bartholomew is a freelance writer.




T A B L E__T A L K How do you protect yourself against credit card fraud? Share your tips and stories in the Business and Personal Finance area of Table Talk R E C E N T L Y Hip! Hip! Hooray! Anyone remember who we're boycotting today? By Kevin Kelleher Boycotts are more effective than ever -- but the public's role in them is becoming increasingly irrelevant (08/07/98) The economy of fake fat By Heather Chaplin Olestra: the oil that leaves you running for the bathroom (07/31/98) Farmers of the American Dream By Carol Lloyd Financial infomercials promise "free money," but what they're really selling is their faith in your "potential" (07/24/98) Glutton for luxury By Heather Chaplin One woman's necessity is another woman's excess (07/17/98) Our watches, our selves By Robert Bryce As the economy keeps on ticking, the watch industry sells the daze of our lives (07/10/98) - - - - - - - - - - - - - - - - Browse the Money feature archives		BULL MARKETING \| PAGE 1, 2 - - - - - - - - - - Regardless of what prosecutors and other detractors say, though, Wade Cook has found a sure-fire way to make money. Wade Cook Financial Corporation (WCFC), the holding company for the Wade Cook empire, reported 1997 revenues of $104 million, primarily from sales of seminars, books, audio and video materials and subscriptions to its Internet bulletin board, WIN. During the same period WCFC lost more than $800,000 trading stocks and options. "Funny how the greatest super-investor in the world managed to lose money in the biggest bull market in history," chuckles Gary Wall, a longtime investor and one of Cook's most vocal critics. But WCFC general counsel Kiman Lucas insists that that $800,000 was an "unrealized loss" only -- even though WCFC's own press release puts the unrealized portion of the loss at $600,000, leaving it with, at minimum, $200,000 in real losses. Lucas also claims that "the stock market was way down Dec. 31," making balance sheets look worse than they were. In fact, at that point, the Dow was up 1,465 points for the year. WCFC had lost in a market that had made most investors feel like natural winners. While veteran traders often exchange such information through the Internet, the inexperienced investor has no easy way of gathering such cautionary tales. To them, Cook's promises must seem irresistible. In his book, "Stock Market Miracles," for instance, Cook says that, after attending the Wall Street Workshop and investing just $2,000 to $5,000, people can make from $5,000 to $8,000 per month. "That's per month," reiterates Cook's text. "And they're only working 15 minutes a day, two or three days a week." I asked professional day-trader Toni Turner of Sarasota, Fla., who spends nine hours a day researching companies, analyzing charts and watching dozens of market indicators, whether she thought such returns were possible from relatively tiny investments of time and money. After she stopped laughing, she answered with a discreet, "Highly improbable." But one of the market's best-respected technical analysts displayed less sense of humor. When asked to comment on the validity of this and some of Cook's other claims, he abruptly ended our interview with, "My stomach is churning. Please don't put me in the same sentence with this guy." Wade Cook insists that the Wall Street guys just don't get it, and has an answer for such nay-sayers in another of his bestselling books, "Wall Street Money Machine," where he writes that stock market pros are "wedded to stodgy, boring and risky methods." Stodgy isn't a word that comes to mind when describing Oliver Velez, the 30-something, Levi's-clad president of Pristine Capital Management, a well-respected company that trains high-rollers for six to eight months before setting them loose to day-trade solo. Unlike Cook, who tells novices that they can get in on the action with as little as $500, Velez believes that a bit more is necessary. "Even $100,000 at times proves not to be enough," says Velez. Velez also disagrees with Cook's promise of instant returns. "We feel that an individual should understand that, for at least six months to as much as 12 months, the individual's going to lose. There's a learning curve to overcome." While Velez is low-key in his criticism, Gary Wall has no qualms about blasting the former cabby. "Professional investors dismiss Wade Cook as a fraud," says Wall. Yes, in this, the great bull run, more than one predator hunkers in the bushes, waiting to pick off the herd's least informed. Almost as flashy as Cook, and with equally dubious credentials, is commodities guru Ken Roberts. His seminars reportedly draw hundreds at a time -- typically, the same type of under-funded neophytes Cook attracts. "If there's anything more self-destructive than trading options on margin," says Wall, "that would be going into commodities." While options can expire worthless, wiping out your entire investment (or double that, if you bought on margin), in commodities trading, you can lose -- almost instantly -- a lot more. "If you have a $10,000 account, you can buy $100,000 worth of a commodity," says Velez. If the commodity's value drops by, say, 50 percent before you can sell it, you not only lose your original investment, you owe the difference -- another $40,000. Unlike the stock market, where you can sell at will, in the commodities market you can be prevented from selling, under certain market conditions, as your investment's value drops ever lower. Yet, in seminars around the country, Ken Roberts assures rookies that they can play and win, with a stake of as little as $2,000. For this, Forbes magazine calls him a "commodity shark," noting that profits from his seminars figure in the tens of millions and have allowed him to build a mansion complete with cigar room. "But where are the customers' mansions?" the magazine asks. The British e-zine Applied Derivatives goes further, saying of Roberts' strategies, "This information is so rudimentary that to entirely rely upon it in the current marketplace is little short of blind stupidity." It's easy to understand the appeal of the Cooks and Roberts of the world, though. They embrace the masses, who have small bankrolls but big dreams, when others ignore them. Unfortunately, as Velez says, "The markets have been designed to ensure that the masses lose. That's the only way they work." Which brings me back to my fellow attendees. Toombs, the would-be playwright, says he lost 41 percent of his $10,000 trading account. The Yankopolises tell me they lost it all -- more than $15,000. And what about 11-year-old Amanda? Her parents decided against opening a day-trading account for their child. They have leased her a horse and enrolled her in a riding academy. Right now, she might be in jodhpurs and helmet, off for a pleasant canter -- a far preferable alternative to the wild ride taken by so many of the grown-ups at the Wall Street Workshop. SALON \| Aug., 21 1998 Anita Bartholomew is a freelance writer.