A collection of reader tales and insights
Soviet chess con
and pyramids
By Nigel Davies
(March 6, 20023)
Apologies in advance for stomping all over conventional wisdom, but I've wanted
to say this for years:
There never was a Soviet school of chess and the success of Soviet players had
nothing to do with its coaching methods. It was
not the 'Botvinnink school', Dvoretsky, Dorfman or any other chess guru. This is
all a big con, perpetrated by people who wanted to
secure their place within the 'system' by being pillars of its so-called
'school'. And lest we forget, Bobby Fischer exposed it.
It was down to the individual efforts of talented players who found the only way
they could get trips out was to play some good
moves. And they had to play a lot of them to get past all the other guys that
wanted to play good moves for the same reason. All of
this contributed to a massively strong chess culture.
There were strong incentives and so the pyramid rose very high. As for the
principles of how to improve your game, they can be stated
very simply:
a) Immerse yourself in chess culture
b) Analyze your own games, avoiding self deception
c) Play in the best tournaments you can get
And that's it.
GM Nigel Davies
Southport, UK
http://www.tigerchess.com
(Speculators' Note: Grandmaster Davies runs a highly
recommended Internet chess school. one here. "His
lessons certainly can be applied to my small market endeavors daily" -- Mr. Z.)
Anonymous
(The Speculators have withheld the name of the author and company.)
I learned many of my personal trading rules on this one:
Summer of 1998, my path had taken a funny turn as my original intent to go into marketing led me into a entirely different direction after I came across the investors' club at school and the statistician in the economic development office I was working for. During that time, I became interested in stocks and wondered at work the statistician put into stock research, everyone at the office knew he was a semi-successful trader on his own account. And I did well in introductory finance, didn't I?
Encouraged by this, I came across the first IPO and practically the first stock I would purchase, XXX. During a nearby commerce meeting where I was required to tag along behind my manager, the local well-known broker had placed a red herring prospectus at each plate, perhaps to compliment the menu. His firm was the underwriter. It was biotech. It was a local company. It had—a product!—revenues! (Please, no groaning yet, I haven't even started.)
Far more interested in this piece of fish than the other free lunch of catered chicken, I decided that I would look further into the booklet. The offering was for $6.25, to be listed on the then CDNX, it had a loss, but...
So I called the broker, learned I had to set up an account at his firm and put in my offer. A month down the road (August), well, the IPO market was a little limp, so the price per share was lowered to $3.00 - but I could buy more shares. Bonus, I thought. The company would be earning money next year if not this year. Another few weeks pass, the price lowered to $2.50. My broker assured me that
would make it a better value for me. November and $1.25. "It will be soon," the broker promised.
January 1999 and the IPO. The initial peak as whoever it was dumped on the first day and then my shares sank, slowly, half a cent here and there, keeping me reined in from selling by slight ups here and there.
The trees bare in 1999 when I saw the rise of other tech stocks and missed opportunity. My shares had finally pulled back up and were sitting at $1.50 whereby I sold, I had learned a lot over the past year, and not from class. Then it decided to immediately go up to $2.00, $2.25, $2.50 as worldwide indices ramped up. The analyst from the brokerage had a 12-18 month target of $8.00...No, I must resist: Cannot-Go-Back.
It stayed up during all of 2000, peaked at around $5.00 for a couple days in 2001. I had moved by this time and was visiting home during the summer, and it seemed no matter where was, there were people discussing XXX, in the elevators, on the radio, at home, even during the bridal shower I was hosting for my friend, I couldn't escape! For it had gone down from the high of $4.75 to $4.20. I say to myself, the hand of the market has already slapped me a couple times over this stock, no way am I getting near this if everyone in the city is talking about it into the bargain. I hate this stock.
Oh yes, it's at $3.10 now, the analyst had a target of $9.00 back in August...anyone want chicken instead?
Lost Ring
By John Moore
To help pay for college I worked part-time at a convenience store, and would
encounter various cons and scams. The one I thought was the most effective was
the "lost ring" that was tried on a me twice. Once with limited success. A woman
would come in to the store and ask if anyone had turned in a ring, upon being
told no, she would then look around the store. She wouldn't find it and would be
very distressed. She would leave her name and a phone number and offer a reward
of several hundred dollars, and ask permission to put up a sign or to leave the
information with us. Later that day, a man would come up to the counter show us
a ring that he had "found". The woman would be called and would state that she
would drive over with the reward, but that it would take about 45 minutes. The
man couldn't wait because he was driving through town and wasn't a local, so
either he or she would suggest that the man give me the ring, and that I advance
half of the reward to the man, and then when she gets there she
will give me the reward and I double my money. If I didn't have the money, they
suggested I "borrow" it from the register paying it back when I got the
reward. Of course the woman never shows up to claim the ring or pay the reward,
and the ring turns out to be worthless.
An effective con because you think you are helping two people (woman gets ring,
man gets money) and you also profit, and there is no risk because you are
holding the ring. A true win-win situation.
In my case, the two of us working at the store only had about $40 between the
two of us and we refused to take money from the register. After trying all sorts
of other options, the guy eventually took the $40, and left us an "address" and
we promised to mail him the other part of his half of the reward.
By James Altucher
In May 2000 I was in the fortunate position of being founder and CEO of a company that most major banks were pitching to do the IPO for. Although in retrospect we can now identify the exact time and day that the bubble had burst in April 2000 nobody knew that then. Instead there was a heightened anticipation that the glory days would soon be over and any company that IPO-ed might very well be the last chopper out of Vietnam. My company had brand-name investors including CMGI, Allen and Company, Henry Kravis, Leo
Hindery, and a dozen other names that we "let" into our original financing.
By May 2000 we had about 50 employees, offices in Denver and NYC, and I spent most of my time going to various meetings with senior bankers, analysts, and junior bankers fresh out of school (somebody had to carry the fifteen 200-page pitchbooks.) They promised after-market support, hinted at analyst coverage, praised our company to the heavens.
One problem that nobody brought up: we had no revenues and had just incorporated a few months earlier. And yet, when I ran through the math so pleasantly laid out in the pitchbooks, I could've been worth $1B. Everyone knew it was a scam but, to my regret, I wanted a piece of it. Perhaps fortunately, I was too late.
By Alix Martin
My personal career as a Nasdaq IPO investor was short but successful. I was offered a "friends and family" allocation in OpenTV's IPO, a company of which my employer was an early customer. I took my shares, priced at 20, and instructed the Merryll Lynch VP acting as broker for these accounts to put in a limit order at 60. Stock opened at 56 and hit 60 a few hours later. Somehow my shares were sold at 62, before the obligatory 2% commission. Although the broker suggested I try to buy the shares back a bit lower (yeah, sure) I closed the account. OPTV proceeded rising to 245 in the following months, but now trades at 0.82 and is in the process of firing half the staff of its lavish Paris office.
By Tom Fowler
A friend not in the financial business (unlike myself) told me back in the 80's that he had learned the following about limited partnerships so popular at the time. "In the beginning the limited (partner) has the money and the general has the knowledge. At the end, the
general has the money and limited has gained the knowledge.