Wednesday, May 16, 2001 4:26:32 PM
Money.com archives...and I thougt it best to copy and paste the whoe article in case it disappears from the net if they lose capacity to hold all these archived articles. This is a very eye opening article which should be read by everyone really. People sure get cocky when they get money in their pockets.
Smokin' Joe Not to be confused with Warren Buffett, Tokyo Joe Park is the leader of a new breed of online stock gurus who are moving stocks and claiming scorching returns. Can what he does be legal?
http://www.google.com/search?q=cache:be2ba8d563720e06:www.pathfinder.com/money/archive/magarticle/0,....
Author: Contributors: Peter Carbonara
Date/Issue: April 1999 Vol. 28 No. 4 Word Count: 2680
Section: Features/Online Trading
While CNBC rattles on in the background, Joe Park sits at a
small desk in his Manhattan living room in front of three
computer screens. A stack of how-to trading books collects dust
on a shelf behind him, and a pack of Marlboros is within easy
reach. One computer screen displays the give-and-take in an
online financial chat room. Another shows Nasdaq Level Two
quotes, the up-to-the-second prices being bid and asked by
marketmakers like Merrill Lynch and J.P. Morgan. A window on yet
another screen shows an online brokerage account that on this
rainy December day looks to contain about $700,000.
So how's business?
It's tremendous," says Park. "So far I'm up 6,400% (for
1998)--6,400 bloody percent!"
Talking quickly and loudly, Park, a wiry 40-year-old South
Korean immigrant and former owner of four Manhattan burrito
restaurants, offers a recipe he believes any investor can use to
make money fast--like right now--in the current bull market.
First, put about half your money into something nice, safe and
boring. Then take the rest and buy stocks that have fallen well
off their highs, particularly thinly capitalized issues that
have the potential to move quickly. When they do move, sell.
Immediately. Don't hold out for a huge score. Pocket a gain of a
quarter point or even a sixteenth of a point. Repeat as
necessary until rich.
An astute trader who times his moves correctly, says Park, can
make money moving in and out of a single stock all day. "Let's
look at COOL," he says, pulling up figures and charts on
Cyberian Outpost, a company that sells computers and software
over the Internet. "This stock has traded between $25.25 and $27
today. By being smart on a thousand shares, just going for
one-quarter of a point, you can make $250 in a matter of five
minutes. Let's say if you did it 10 times and screwed up three
times but were successful seven times, that's what? Seventeen
hundred and fifty dollars to take home.... That's what anybody
can learn."
This is not traditional Warren Buffett buy-and-hold investing.
"This is speculation," says Park. "We're not talking about
investment; we're talking about moving on--hit and run. You will
not get 6,000% return--as I have done--buying AT&T. It was down
at $60 in July and August. If I had bought then and sat on the
bloody thing until now, I would not have gained anything. That
sucks, you know? Why bother?"
Joe Park is a day-trader, but he's not just one of the thousands
of market obsessives out there trying--and usually failing--to
make a living buying and selling stocks via their PCs. In fact,
as "Tokyo Joe" or "TokyoMex," Park is arguably the most
influential online market analyst and stock picker in the
country. More than 800 investors around the world, most of whom
pay him $100 a month--making his take more than $70,000 a
month--are members of his Societe Anonyme, which entitles them
to receive a daily barrage of stock tips and trading advice via
e-mail. These members also get the password to a private online
chat room, where Park holds forth throughout the trading day. In
addition, Park has attracted the largest following of all the
cyber-gurus who post tips and analyses on Silicon Investor
(www.techstocks.com), a popular financial Website with about
100,000 subscribers. On top of that, Park claims that something
like 200,000 people a day visit his own Website
(www.tokyojoe.com), where he posts his tips for free--albeit
after first sending them out to paying customers. All of this
has given Joe Park serious mojo in the market.
Last Dec. 11, for instance, Scott Kessler, an equity analyst at
Standard & Poor's in New York City, saw one of the stocks that
he follows do some odd things. The shares of FileNET Corp.,
which makes document management software, jumped about three
points to $11 a share, and volume rose to about 3.5 million,
more than twice its recent daily average. FileNET, which had
been in free-fall since last summer, was bouncing back--for no
apparent reason. Then Kessler took a look at Silicon Investor
and saw the hand of Tokyo Joe. Park had announced that he liked
the stock over the short term (the very short term) and expected
it to go higher. And that, says Kessler, was enough to make the
stock dance.
The rise of Tokyo Joe represents either a) the coming of age of
the Internet as a force in investing, b) the ultimate
democratization of the market for financial advice, c)
"irrational exuberance" in full hysterical flower, d) the
pumping and dumping of highly chancy stocks or e) all of the
above. Whatever it is, Tokyo Joe's act has got the attention of
companies, online investors, Wall Street analysts, Web
message-board operators and almost certainly the Securities and
Exchange Commission (although John Stark, the chief of the SEC's
recently created online enforcement unit, declines to discuss
Park). Admired and reviled online in about equal measure, Tokyo
Joe--extremely shrewd, occasionally charming, frequently
arrogant and invariably profane--is a kind of Matt Drudge for
investors, the most influential of a small but growing
counter-establishment of Internet stock gurus.
KEYWORD: FOOL
Most of these gurus, including Park, have followed a similar
trajectory to Internet stardom. First they're just investors who
like to discuss the market via online message boards and chat
rooms; then a virtual congregation forms around them as they
become stock prophets whose wisdom is eagerly sought by the
anxious and the avaricious; then one morning they wake up and ask
themselves, "Why give these people advice for free when I can
charge for it?"
Many day-traders--notwithstanding their frequent claims of
independent thinking and manly self-reliance--are happy to take
guidance wherever they can get it, and an online industry has
grown up to feed that hunger. The most polished and
professional-looking of these operations is Pristine
(www.pristine.com), a White Plains, N.Y. outfit--half online tip
service, half finishing school for would-be day-traders--that
was launched four years ago by partners Oliver Velez and Greg
Capra, who've recently had preliminary conversations about
joining forces with Tokyo Joe.
Numerous other smaller entrepreneurs run electronic cottage
businesses out of their homes. Among the more reputable and
influential is Barbara Simon, a 38-year-old graphic designer in
Boca Raton, Fla. who began posting on Silicon Investor a few
years ago under the handle Jenna. Simon then launched a Website
(www.marketgems.com) and subscription e-mail tips service. Many
of the online gurus have surprising influence, particularly on
volatile technology issues. "Once you get a following," says
Pristine's Oliver Velez, "it takes no special skill to move a
stock." For breadth of influence, though--not to mention sheer
audacity and salesmanship--Park is the reigning king, the
current numero uno.
The origin of "Tokyo Joe," as told by Joe Park, goes something
like this: Raised in Seoul, South Korea, he was a smart but wild
kid who soon discovered he had a taste for travel and the good
life. As a teenager, he ran away to see Mexico. After a series
of adventures there, including a few days spent in a squalid
jail for entering the country illegally, he returned home to get
a law degree. He held a series of corporate jobs in Korea,
Europe and Japan before experiencing a descent into yuppie hell:
plenty of success, money and 1980s-style excess accompanied by
nagging attacks of "Who am I?" and "What does it all mean?"
Following a tearful epiphany in a Buddhist temple, he decided to
start over. He married and brought his wife to the U.S., landing
in Seattle, where he crashed and burned trying to make it
selling condominiums before eventually working in a gas station.
Then the Parks migrated east to New York City, where they now
live with their young daughter in a modest apartment a few
blocks from the United Nations.
In New York, Park found his way into the restaurant business,
ultimately winding up as the owner of four Manhattan Tokyo Joe
burrito places. Meanwhile, he was trying to make money in the
stock market the old-fashioned way--and losing. Frustrated with
the mess he says a blue-chip brokerage was making of his
investment portfolio, he went online and turned to the Motley
Fool Website and message boards.
Launched by brothers Tom and David Gardner in 1994, The Fool
(www.fool.com) has become the best-known brand name in online
financial advice, generally espousing a conservative,
buy-and-hold philosophy. Park began posting his own stock ideas
and became a presence on the Motley Fool's America Online site
(keyword: Fool), weighing in frequently in the area devoted to
computer-drive maker Iomega. In 1996, that stock famously
soared--then crashed--on a wave of wild enthusiasm emanating
from the Motley Fool board, a foretaste of the current giddy
marriage between Internet chatter and soaring tech-stock prices.
"And I was there," Park says. He adds that he first lost money
going long on Iomega and then made several thousand dollars
shorting when the stock began to fall. He also learned the
golden rule of online trading: "Hype, man. Hype moved the
f---ing stock.... The Internet is not investment. This is hype,
and everybody should know that."
The world of online financial chat is as much show biz as
anything else, an endless, open-mike night in which charismatic,
energetic (and usually anonymous) self-promoters can rise almost
instantaneously from obscurity to a kind of celebrity. So it was
with Tokyo Joe. Eventually, his attitudes about investing
started to change, and he began to feel out of step with the
Motley Fool's value-investing model. "I realized the Motley
Fools are fools indeed," he says, "because they don't know when
to sell.... (T)hey pump stocks--even when they are going
down--based on fundamentals. Who gives a s--- about
fundamentals? It's market sentiment. No matter how good a
company's fundamentals are, if market sentiment says it's going
down, it's going down. You do not fight the ticker. That's when
I became a day-trader."
"MEX, YOU SHOULD START CHARGING PEOPLE, MAN"
In 1997, Park began posting on Silicon Investor, which caters to
a faster and self-consciously more "sophisticated" investment
crowd, many of them day-traders. "It was wide-open territory,"
says Park. "It was unrestricted. It was the wild, wild West." It
still is: The sober minority in many Silicon Investor "threads,"
or discussion areas, is often drowned out by vapid cheerleading
for one stock or another, not to mention a regular contingent of
short-sellers, angry cranks and would-be manipulators with a
variety of agendas hidden behind their online pseudonyms. But
Park, whose Silicon Investor handle is TokyoMex, is no slouch in
the invective department, and his loud and distinctive voice
made him stand out amid the frequent food fights. He is
currently the Website's most followed poster.
The Silicon Investor area devoted to Tokyo Joe and his followers
seems to have more than its share of contention, with Park
trading insults and ridicule with a rotating cast of
antagonists--"Deeber, you are a #@&head"--to the applause of his
large amen corner--"TokyoMex is a Prodigy!!!." Until recently,
one of Park's loudest and most vitriolic critics ran a thread on
Silicon Investor devoted solely to trashing him. But the site's
management ultimately took the thread down.
Notwithstanding (or maybe because of) such brawling, Park
attracted a following. He says, "People kept sending me e-mails:
'Next time, Mex, you buy something, you let me know.' So this
list grew to 2,000 people. So when I bought something, I sent
e-mails out and the volume went up and the price went bonkers. I
had no desire to make any money out of this thing; it just
happened, you know? But then some members started saying to me,
'Mex, you should start charging people, man.'" He did just that,
and a business was born.
LAUGHING OUT LOUD
Park currently posts comments three or four times a day on the
"Tokyo Joe's Cafe/Societe Anonyme" discussion area at Silicon
Investor. He has also flirted with newcomer Raging Bull
(www.ragingbull.com), whose managers have been trying to woo him
to their site. Park says he's grown tired of the yelling and
screaming online. The chief function of the message boards, as
far as he is concerned, is to serve as advertising for his other
enterprises. The real Tokyo Joe action can be found in his
e-mail to Societe Anonyme members--about a dozen a day ranging
in content from recycled news to specific stock picks and price
targets--and in his private online chat room.
One afternoon in February, for instance, Park was online in the
chat room under the name TokyoMex, with about 200 of his
followers crowded around him in cyberspace like eager yeshiva
boys encircling a learned if sometimes irascible rabbi,
alternately flattering him, joking with him and peppering him
with arcane questions. Park, tapping away from behind his Level
Two screen at home in Manhattan, had written earlier that he had
received a tip from a reliable source that there would be news
coming on PC Quote Inc., a company that retails market data via
satellite and over the Internet.
At about 1:15 p.m., one of his members piped up to ask when the
news was coming.
Park shot back: "How the hell do I knwo (sic) when... what am I a
messenger?... its coming soon!"
Another member wrote: "I always thought you were a messenger--I'm
crushed!"
A third chimed in: "TM...can you tell me when my niece will have
her sixth contraction? She's pregnant and the doctor wants to
know."
Yet another added: "I don't think TM should answer these
questions...until he tells me if I should lighten my hair."
TokyoMex himself responded: "lol"--which means "laughing out loud"
in cyberspeak.
Park says he decides which stocks to hype to his members based
on information he gets from public sources: newspapers, CNBC,
the array of market data available to anyone over the Internet.
"But," he adds, "I do have some tremendous resources through the
(Societe Anonyme) membership. So we do get some information that
comes out before the rest of the world knows about it." Park
says, for example, a member tipped him off to J.C. Penney's bid
to buy Genovese Drug Stores last November, four days before the
news became public. "So we got in at $25.25," he says. "We sold
at $30, $31."
"WHAT AM I? A CHARITY?"
Occasionally, there are incidents that provoke sniping on the
Internet and bring questions that Park would just as soon not
hear. He insists--angrily and repeatedly--that his operation is
strictly aboveboard, but he does admit to a practice that should
give pause to anyone considering taking his advice: He will
sometimes take a position in a stock and then recommend it to
his Societe Anonyme and anyone else who will listen via his
posts on the Web. Then, when buying drives up the price to his
satisfaction, he sells.
This, Park says, is okay as long as he's honest about it.
"Everybody knows that I'm buying before you buy, and I'm selling
when you're buying. Otherwise, what am I? A charity?" Indeed,
his Website does carry a lengthy disclaimer, and his e-mail to
subscribers often states how many shares he owns of a particular
stock and at what price he bought them. Which is more, Park
likes to say, than you can expect from most stock pickers:
"(With) day-traders and any other kind of scam
hypesters--including myself, sometimes--when they say 'buy,'
that means they already have a position in the stock, including
Peter Lynch, including Abby Cohen."
But if Peter Lynch or Abby Cohen or any stockbroker or money
manager bought a stock, hyped it and sold their own shares into
the demand they'd created among their own clients, it would be
what market hands call front-running--which is not only bad
manners but also a flagrant violation of federal securities law.
Can what Joe Park does be legal? Probably, say securities law
experts, including one senior federal enforcement official who
spoke privately. According to Ira Sorkin, a leading New York
City defense lawyer and a veteran of both the SEC and the U.S.
Attorney's office for the Southern District of New York, a
tipster like Park is likely in the clear as long as he discloses
his holdings to his subscribers. Because he is neither a
registered securities dealer nor a certified financial adviser,
Park is for legal purposes essentially a publisher of financial
information. As a result, he has all the protections of the
First Amendment and is subject to none of the regulation to
which financial pros must submit. Which means that anyone
following his advice has no legal right to expect Park to be
bound by a fiduciary duty to anything but his own wallet.
"Anyone who wants to make an investment on that basis," Sorkin
says, "God bless them."
Besides being legal, says Park, his tips don't offend his
subscribers because most of them are doing quite well, thank
you. Indeed, if a few sessions in his chat room are any
evidence, Park's Societe is composed mainly of satisfied
customers. Danny Chan, an Indiana University finance major, says
he has been up as much as $57,000 this year day-trading, partly
due to Park's tips. He writes in an e-mail message, "T-Mex is
the man.... For 100 a month T-Mex is a bargain."
Park says he has received no visits or inquiries from
regulators, although he admits, "I'm surprised I have not." But
he doesn't seem particularly worried. Sipping Scotch and
chain-smoking Marlboros one recent evening in a genteel bar
catering to a U.N. middle-management clientele a few blocks from
his home, he relaxes after a long day in front of his screens. A
dapper older man whom Park describes as a foreign diplomat
thanks him for a recent stock tip. Meanwhile, Park sits awaiting
the arrival of some potential business associates whom he plans
to wine and dine at a Manhattan geisha house (an entirely
respectable and elegant Asian business practice, the
well-traveled Park is quick to point out to a provincial
American). He talks big--about starting his own mutual fund,
about writing a book about himself ("It's the American dream"),
about taking his operation public one day. Nothing seems out of
reach.
A year ago, he says, he had $20,000 in the market. Now he is up
more than $1.6 million. Life is good, and Park is feeling
expansive. He takes a moment to reflect on what he, his
followers and his imitators mean to the markets and to
investing. In a word: the future. If that's discomforting, he
says, smiling beatifically through a nimbus of cigarette smoke,
get over it: "We're the new blood, man."
Smokin' Joe Not to be confused with Warren Buffett, Tokyo Joe Park is the leader of a new breed of online stock gurus who are moving stocks and claiming scorching returns. Can what he does be legal?
Author: Contributors: Peter Carbonara
Date/Issue: April 1999 Vol. 28 No. 4 Word Count: 2680
Section: Features/Online Trading
While CNBC rattles on in the background, Joe Park sits at a
small desk in his Manhattan living room in front of three
computer screens. A stack of how-to trading books collects dust
on a shelf behind him, and a pack of Marlboros is within easy
reach. One computer screen displays the give-and-take in an
online financial chat room. Another shows Nasdaq Level Two
quotes, the up-to-the-second prices being bid and asked by
marketmakers like Merrill Lynch and J.P. Morgan. A window on yet
another screen shows an online brokerage account that on this
rainy December day looks to contain about $700,000.
So how's business?
It's tremendous," says Park. "So far I'm up 6,400% (for
1998)--6,400 bloody percent!"
Talking quickly and loudly, Park, a wiry 40-year-old South
Korean immigrant and former owner of four Manhattan burrito
restaurants, offers a recipe he believes any investor can use to
make money fast--like right now--in the current bull market.
First, put about half your money into something nice, safe and
boring. Then take the rest and buy stocks that have fallen well
off their highs, particularly thinly capitalized issues that
have the potential to move quickly. When they do move, sell.
Immediately. Don't hold out for a huge score. Pocket a gain of a
quarter point or even a sixteenth of a point. Repeat as
necessary until rich.
An astute trader who times his moves correctly, says Park, can
make money moving in and out of a single stock all day. "Let's
look at COOL," he says, pulling up figures and charts on
Cyberian Outpost, a company that sells computers and software
over the Internet. "This stock has traded between $25.25 and $27
today. By being smart on a thousand shares, just going for
one-quarter of a point, you can make $250 in a matter of five
minutes. Let's say if you did it 10 times and screwed up three
times but were successful seven times, that's what? Seventeen
hundred and fifty dollars to take home.... That's what anybody
can learn."
This is not traditional Warren Buffett buy-and-hold investing.
"This is speculation," says Park. "We're not talking about
investment; we're talking about moving on--hit and run. You will
not get 6,000% return--as I have done--buying AT&T. It was down
at $60 in July and August. If I had bought then and sat on the
bloody thing until now, I would not have gained anything. That
sucks, you know? Why bother?"
Joe Park is a day-trader, but he's not just one of the thousands
of market obsessives out there trying--and usually failing--to
make a living buying and selling stocks via their PCs. In fact,
as "Tokyo Joe" or "TokyoMex," Park is arguably the most
influential online market analyst and stock picker in the
country. More than 800 investors around the world, most of whom
pay him $100 a month--making his take more than $70,000 a
month--are members of his Societe Anonyme, which entitles them
to receive a daily barrage of stock tips and trading advice via
e-mail. These members also get the password to a private online
chat room, where Park holds forth throughout the trading day. In
addition, Park has attracted the largest following of all the
cyber-gurus who post tips and analyses on Silicon Investor
(www.techstocks.com), a popular financial Website with about
100,000 subscribers. On top of that, Park claims that something
like 200,000 people a day visit his own Website
(www.tokyojoe.com), where he posts his tips for free--albeit
after first sending them out to paying customers. All of this
has given Joe Park serious mojo in the market.
Last Dec. 11, for instance, Scott Kessler, an equity analyst at
Standard & Poor's in New York City, saw one of the stocks that
he follows do some odd things. The shares of FileNET Corp.,
which makes document management software, jumped about three
points to $11 a share, and volume rose to about 3.5 million,
more than twice its recent daily average. FileNET, which had
been in free-fall since last summer, was bouncing back--for no
apparent reason. Then Kessler took a look at Silicon Investor
and saw the hand of Tokyo Joe. Park had announced that he liked
the stock over the short term (the very short term) and expected
it to go higher. And that, says Kessler, was enough to make the
stock dance.
The rise of Tokyo Joe represents either a) the coming of age of
the Internet as a force in investing, b) the ultimate
democratization of the market for financial advice, c)
"irrational exuberance" in full hysterical flower, d) the
pumping and dumping of highly chancy stocks or e) all of the
above. Whatever it is, Tokyo Joe's act has got the attention of
companies, online investors, Wall Street analysts, Web
message-board operators and almost certainly the Securities and
Exchange Commission (although John Stark, the chief of the SEC's
recently created online enforcement unit, declines to discuss
Park). Admired and reviled online in about equal measure, Tokyo
Joe--extremely shrewd, occasionally charming, frequently
arrogant and invariably profane--is a kind of Matt Drudge for
investors, the most influential of a small but growing
counter-establishment of Internet stock gurus.
KEYWORD: FOOL
Most of these gurus, including Park, have followed a similar
trajectory to Internet stardom. First they're just investors who
like to discuss the market via online message boards and chat
rooms; then a virtual congregation forms around them as they
become stock prophets whose wisdom is eagerly sought by the
anxious and the avaricious; then one morning they wake up and ask
themselves, "Why give these people advice for free when I can
charge for it?"
Many day-traders--notwithstanding their frequent claims of
independent thinking and manly self-reliance--are happy to take
guidance wherever they can get it, and an online industry has
grown up to feed that hunger. The most polished and
professional-looking of these operations is Pristine
(www.pristine.com), a White Plains, N.Y. outfit--half online tip
service, half finishing school for would-be day-traders--that
was launched four years ago by partners Oliver Velez and Greg
Capra, who've recently had preliminary conversations about
joining forces with Tokyo Joe.
Numerous other smaller entrepreneurs run electronic cottage
businesses out of their homes. Among the more reputable and
influential is Barbara Simon, a 38-year-old graphic designer in
Boca Raton, Fla. who began posting on Silicon Investor a few
years ago under the handle Jenna. Simon then launched a Website
(www.marketgems.com) and subscription e-mail tips service. Many
of the online gurus have surprising influence, particularly on
volatile technology issues. "Once you get a following," says
Pristine's Oliver Velez, "it takes no special skill to move a
stock." For breadth of influence, though--not to mention sheer
audacity and salesmanship--Park is the reigning king, the
current numero uno.
The origin of "Tokyo Joe," as told by Joe Park, goes something
like this: Raised in Seoul, South Korea, he was a smart but wild
kid who soon discovered he had a taste for travel and the good
life. As a teenager, he ran away to see Mexico. After a series
of adventures there, including a few days spent in a squalid
jail for entering the country illegally, he returned home to get
a law degree. He held a series of corporate jobs in Korea,
Europe and Japan before experiencing a descent into yuppie hell:
plenty of success, money and 1980s-style excess accompanied by
nagging attacks of "Who am I?" and "What does it all mean?"
Following a tearful epiphany in a Buddhist temple, he decided to
start over. He married and brought his wife to the U.S., landing
in Seattle, where he crashed and burned trying to make it
selling condominiums before eventually working in a gas station.
Then the Parks migrated east to New York City, where they now
live with their young daughter in a modest apartment a few
blocks from the United Nations.
In New York, Park found his way into the restaurant business,
ultimately winding up as the owner of four Manhattan Tokyo Joe
burrito places. Meanwhile, he was trying to make money in the
stock market the old-fashioned way--and losing. Frustrated with
the mess he says a blue-chip brokerage was making of his
investment portfolio, he went online and turned to the Motley
Fool Website and message boards.
Launched by brothers Tom and David Gardner in 1994, The Fool
(www.fool.com) has become the best-known brand name in online
financial advice, generally espousing a conservative,
buy-and-hold philosophy. Park began posting his own stock ideas
and became a presence on the Motley Fool's America Online site
(keyword: Fool), weighing in frequently in the area devoted to
computer-drive maker Iomega. In 1996, that stock famously
soared--then crashed--on a wave of wild enthusiasm emanating
from the Motley Fool board, a foretaste of the current giddy
marriage between Internet chatter and soaring tech-stock prices.
"And I was there," Park says. He adds that he first lost money
going long on Iomega and then made several thousand dollars
shorting when the stock began to fall. He also learned the
golden rule of online trading: "Hype, man. Hype moved the
f---ing stock.... The Internet is not investment. This is hype,
and everybody should know that."
The world of online financial chat is as much show biz as
anything else, an endless, open-mike night in which charismatic,
energetic (and usually anonymous) self-promoters can rise almost
instantaneously from obscurity to a kind of celebrity. So it was
with Tokyo Joe. Eventually, his attitudes about investing
started to change, and he began to feel out of step with the
Motley Fool's value-investing model. "I realized the Motley
Fools are fools indeed," he says, "because they don't know when
to sell.... (T)hey pump stocks--even when they are going
down--based on fundamentals. Who gives a s--- about
fundamentals? It's market sentiment. No matter how good a
company's fundamentals are, if market sentiment says it's going
down, it's going down. You do not fight the ticker. That's when
I became a day-trader."
"MEX, YOU SHOULD START CHARGING PEOPLE, MAN"
In 1997, Park began posting on Silicon Investor, which caters to
a faster and self-consciously more "sophisticated" investment
crowd, many of them day-traders. "It was wide-open territory,"
says Park. "It was unrestricted. It was the wild, wild West." It
still is: The sober minority in many Silicon Investor "threads,"
or discussion areas, is often drowned out by vapid cheerleading
for one stock or another, not to mention a regular contingent of
short-sellers, angry cranks and would-be manipulators with a
variety of agendas hidden behind their online pseudonyms. But
Park, whose Silicon Investor handle is TokyoMex, is no slouch in
the invective department, and his loud and distinctive voice
made him stand out amid the frequent food fights. He is
currently the Website's most followed poster.
The Silicon Investor area devoted to Tokyo Joe and his followers
seems to have more than its share of contention, with Park
trading insults and ridicule with a rotating cast of
antagonists--"Deeber, you are a #@&head"--to the applause of his
large amen corner--"TokyoMex is a Prodigy!!!." Until recently,
one of Park's loudest and most vitriolic critics ran a thread on
Silicon Investor devoted solely to trashing him. But the site's
management ultimately took the thread down.
Notwithstanding (or maybe because of) such brawling, Park
attracted a following. He says, "People kept sending me e-mails:
'Next time, Mex, you buy something, you let me know.' So this
list grew to 2,000 people. So when I bought something, I sent
e-mails out and the volume went up and the price went bonkers. I
had no desire to make any money out of this thing; it just
happened, you know? But then some members started saying to me,
'Mex, you should start charging people, man.'" He did just that,
and a business was born.
LAUGHING OUT LOUD
Park currently posts comments three or four times a day on the
"Tokyo Joe's Cafe/Societe Anonyme" discussion area at Silicon
Investor. He has also flirted with newcomer Raging Bull
(www.ragingbull.com), whose managers have been trying to woo him
to their site. Park says he's grown tired of the yelling and
screaming online. The chief function of the message boards, as
far as he is concerned, is to serve as advertising for his other
enterprises. The real Tokyo Joe action can be found in his
e-mail to Societe Anonyme members--about a dozen a day ranging
in content from recycled news to specific stock picks and price
targets--and in his private online chat room.
One afternoon in February, for instance, Park was online in the
chat room under the name TokyoMex, with about 200 of his
followers crowded around him in cyberspace like eager yeshiva
boys encircling a learned if sometimes irascible rabbi,
alternately flattering him, joking with him and peppering him
with arcane questions. Park, tapping away from behind his Level
Two screen at home in Manhattan, had written earlier that he had
received a tip from a reliable source that there would be news
coming on PC Quote Inc., a company that retails market data via
satellite and over the Internet.
At about 1:15 p.m., one of his members piped up to ask when the
news was coming.
Park shot back: "How the hell do I knwo (sic) when... what am I a
messenger?... its coming soon!"
Another member wrote: "I always thought you were a messenger--I'm
crushed!"
A third chimed in: "TM...can you tell me when my niece will have
her sixth contraction? She's pregnant and the doctor wants to
know."
Yet another added: "I don't think TM should answer these
questions...until he tells me if I should lighten my hair."
TokyoMex himself responded: "lol"--which means "laughing out loud"
in cyberspeak.
Park says he decides which stocks to hype to his members based
on information he gets from public sources: newspapers, CNBC,
the array of market data available to anyone over the Internet.
"But," he adds, "I do have some tremendous resources through the
(Societe Anonyme) membership. So we do get some information that
comes out before the rest of the world knows about it." Park
says, for example, a member tipped him off to J.C. Penney's bid
to buy Genovese Drug Stores last November, four days before the
news became public. "So we got in at $25.25," he says. "We sold
at $30, $31."
"WHAT AM I? A CHARITY?"
Occasionally, there are incidents that provoke sniping on the
Internet and bring questions that Park would just as soon not
hear. He insists--angrily and repeatedly--that his operation is
strictly aboveboard, but he does admit to a practice that should
give pause to anyone considering taking his advice: He will
sometimes take a position in a stock and then recommend it to
his Societe Anonyme and anyone else who will listen via his
posts on the Web. Then, when buying drives up the price to his
satisfaction, he sells.
This, Park says, is okay as long as he's honest about it.
"Everybody knows that I'm buying before you buy, and I'm selling
when you're buying. Otherwise, what am I? A charity?" Indeed,
his Website does carry a lengthy disclaimer, and his e-mail to
subscribers often states how many shares he owns of a particular
stock and at what price he bought them. Which is more, Park
likes to say, than you can expect from most stock pickers:
"(With) day-traders and any other kind of scam
hypesters--including myself, sometimes--when they say 'buy,'
that means they already have a position in the stock, including
Peter Lynch, including Abby Cohen."
But if Peter Lynch or Abby Cohen or any stockbroker or money
manager bought a stock, hyped it and sold their own shares into
the demand they'd created among their own clients, it would be
what market hands call front-running--which is not only bad
manners but also a flagrant violation of federal securities law.
Can what Joe Park does be legal? Probably, say securities law
experts, including one senior federal enforcement official who
spoke privately. According to Ira Sorkin, a leading New York
City defense lawyer and a veteran of both the SEC and the U.S.
Attorney's office for the Southern District of New York, a
tipster like Park is likely in the clear as long as he discloses
his holdings to his subscribers. Because he is neither a
registered securities dealer nor a certified financial adviser,
Park is for legal purposes essentially a publisher of financial
information. As a result, he has all the protections of the
First Amendment and is subject to none of the regulation to
which financial pros must submit. Which means that anyone
following his advice has no legal right to expect Park to be
bound by a fiduciary duty to anything but his own wallet.
"Anyone who wants to make an investment on that basis," Sorkin
says, "God bless them."
Besides being legal, says Park, his tips don't offend his
subscribers because most of them are doing quite well, thank
you. Indeed, if a few sessions in his chat room are any
evidence, Park's Societe is composed mainly of satisfied
customers. Danny Chan, an Indiana University finance major, says
he has been up as much as $57,000 this year day-trading, partly
due to Park's tips. He writes in an e-mail message, "T-Mex is
the man.... For 100 a month T-Mex is a bargain."
Park says he has received no visits or inquiries from
regulators, although he admits, "I'm surprised I have not." But
he doesn't seem particularly worried. Sipping Scotch and
chain-smoking Marlboros one recent evening in a genteel bar
catering to a U.N. middle-management clientele a few blocks from
his home, he relaxes after a long day in front of his screens. A
dapper older man whom Park describes as a foreign diplomat
thanks him for a recent stock tip. Meanwhile, Park sits awaiting
the arrival of some potential business associates whom he plans
to wine and dine at a Manhattan geisha house (an entirely
respectable and elegant Asian business practice, the
well-traveled Park is quick to point out to a provincial
American). He talks big--about starting his own mutual fund,
about writing a book about himself ("It's the American dream"),
about taking his operation public one day. Nothing seems out of
reach.
A year ago, he says, he had $20,000 in the market. Now he is up
more than $1.6 million. Life is good, and Park is feeling
expansive. He takes a moment to reflect on what he, his
followers and his imitators mean to the markets and to
investing. In a word: the future. If that's discomforting, he
says, smiling beatifically through a nimbus of cigarette smoke,
get over it: "We're the new blood, man."
I too am quite surprise that they would want to be involved with TJ, but then again, they did say they were in conversations. Too bad that they even told anyone they had conversations as I would think anyone who knew TJ knew what he was doing.
Smokin' Joe Not to be confused with Warren Buffett, Tokyo Joe Park is the leader of a new breed of online stock gurus who are moving stocks and claiming scorching returns. Can what he does be legal?
http://www.google.com/search?q=cache:be2ba8d563720e06:www.pathfinder.com/money/archive/magarticle/0,....
Author: Contributors: Peter Carbonara
Date/Issue: April 1999 Vol. 28 No. 4 Word Count: 2680
Section: Features/Online Trading
While CNBC rattles on in the background, Joe Park sits at a
small desk in his Manhattan living room in front of three
computer screens. A stack of how-to trading books collects dust
on a shelf behind him, and a pack of Marlboros is within easy
reach. One computer screen displays the give-and-take in an
online financial chat room. Another shows Nasdaq Level Two
quotes, the up-to-the-second prices being bid and asked by
marketmakers like Merrill Lynch and J.P. Morgan. A window on yet
another screen shows an online brokerage account that on this
rainy December day looks to contain about $700,000.
So how's business?
It's tremendous," says Park. "So far I'm up 6,400% (for
1998)--6,400 bloody percent!"
Talking quickly and loudly, Park, a wiry 40-year-old South
Korean immigrant and former owner of four Manhattan burrito
restaurants, offers a recipe he believes any investor can use to
make money fast--like right now--in the current bull market.
First, put about half your money into something nice, safe and
boring. Then take the rest and buy stocks that have fallen well
off their highs, particularly thinly capitalized issues that
have the potential to move quickly. When they do move, sell.
Immediately. Don't hold out for a huge score. Pocket a gain of a
quarter point or even a sixteenth of a point. Repeat as
necessary until rich.
An astute trader who times his moves correctly, says Park, can
make money moving in and out of a single stock all day. "Let's
look at COOL," he says, pulling up figures and charts on
Cyberian Outpost, a company that sells computers and software
over the Internet. "This stock has traded between $25.25 and $27
today. By being smart on a thousand shares, just going for
one-quarter of a point, you can make $250 in a matter of five
minutes. Let's say if you did it 10 times and screwed up three
times but were successful seven times, that's what? Seventeen
hundred and fifty dollars to take home.... That's what anybody
can learn."
This is not traditional Warren Buffett buy-and-hold investing.
"This is speculation," says Park. "We're not talking about
investment; we're talking about moving on--hit and run. You will
not get 6,000% return--as I have done--buying AT&T. It was down
at $60 in July and August. If I had bought then and sat on the
bloody thing until now, I would not have gained anything. That
sucks, you know? Why bother?"
Joe Park is a day-trader, but he's not just one of the thousands
of market obsessives out there trying--and usually failing--to
make a living buying and selling stocks via their PCs. In fact,
as "Tokyo Joe" or "TokyoMex," Park is arguably the most
influential online market analyst and stock picker in the
country. More than 800 investors around the world, most of whom
pay him $100 a month--making his take more than $70,000 a
month--are members of his Societe Anonyme, which entitles them
to receive a daily barrage of stock tips and trading advice via
e-mail. These members also get the password to a private online
chat room, where Park holds forth throughout the trading day. In
addition, Park has attracted the largest following of all the
cyber-gurus who post tips and analyses on Silicon Investor
(www.techstocks.com), a popular financial Website with about
100,000 subscribers. On top of that, Park claims that something
like 200,000 people a day visit his own Website
(www.tokyojoe.com), where he posts his tips for free--albeit
after first sending them out to paying customers. All of this
has given Joe Park serious mojo in the market.
Last Dec. 11, for instance, Scott Kessler, an equity analyst at
Standard & Poor's in New York City, saw one of the stocks that
he follows do some odd things. The shares of FileNET Corp.,
which makes document management software, jumped about three
points to $11 a share, and volume rose to about 3.5 million,
more than twice its recent daily average. FileNET, which had
been in free-fall since last summer, was bouncing back--for no
apparent reason. Then Kessler took a look at Silicon Investor
and saw the hand of Tokyo Joe. Park had announced that he liked
the stock over the short term (the very short term) and expected
it to go higher. And that, says Kessler, was enough to make the
stock dance.
The rise of Tokyo Joe represents either a) the coming of age of
the Internet as a force in investing, b) the ultimate
democratization of the market for financial advice, c)
"irrational exuberance" in full hysterical flower, d) the
pumping and dumping of highly chancy stocks or e) all of the
above. Whatever it is, Tokyo Joe's act has got the attention of
companies, online investors, Wall Street analysts, Web
message-board operators and almost certainly the Securities and
Exchange Commission (although John Stark, the chief of the SEC's
recently created online enforcement unit, declines to discuss
Park). Admired and reviled online in about equal measure, Tokyo
Joe--extremely shrewd, occasionally charming, frequently
arrogant and invariably profane--is a kind of Matt Drudge for
investors, the most influential of a small but growing
counter-establishment of Internet stock gurus.
KEYWORD: FOOL
Most of these gurus, including Park, have followed a similar
trajectory to Internet stardom. First they're just investors who
like to discuss the market via online message boards and chat
rooms; then a virtual congregation forms around them as they
become stock prophets whose wisdom is eagerly sought by the
anxious and the avaricious; then one morning they wake up and ask
themselves, "Why give these people advice for free when I can
charge for it?"
Many day-traders--notwithstanding their frequent claims of
independent thinking and manly self-reliance--are happy to take
guidance wherever they can get it, and an online industry has
grown up to feed that hunger. The most polished and
professional-looking of these operations is Pristine
(www.pristine.com), a White Plains, N.Y. outfit--half online tip
service, half finishing school for would-be day-traders--that
was launched four years ago by partners Oliver Velez and Greg
Capra, who've recently had preliminary conversations about
joining forces with Tokyo Joe.
Numerous other smaller entrepreneurs run electronic cottage
businesses out of their homes. Among the more reputable and
influential is Barbara Simon, a 38-year-old graphic designer in
Boca Raton, Fla. who began posting on Silicon Investor a few
years ago under the handle Jenna. Simon then launched a Website
(www.marketgems.com) and subscription e-mail tips service. Many
of the online gurus have surprising influence, particularly on
volatile technology issues. "Once you get a following," says
Pristine's Oliver Velez, "it takes no special skill to move a
stock." For breadth of influence, though--not to mention sheer
audacity and salesmanship--Park is the reigning king, the
current numero uno.
The origin of "Tokyo Joe," as told by Joe Park, goes something
like this: Raised in Seoul, South Korea, he was a smart but wild
kid who soon discovered he had a taste for travel and the good
life. As a teenager, he ran away to see Mexico. After a series
of adventures there, including a few days spent in a squalid
jail for entering the country illegally, he returned home to get
a law degree. He held a series of corporate jobs in Korea,
Europe and Japan before experiencing a descent into yuppie hell:
plenty of success, money and 1980s-style excess accompanied by
nagging attacks of "Who am I?" and "What does it all mean?"
Following a tearful epiphany in a Buddhist temple, he decided to
start over. He married and brought his wife to the U.S., landing
in Seattle, where he crashed and burned trying to make it
selling condominiums before eventually working in a gas station.
Then the Parks migrated east to New York City, where they now
live with their young daughter in a modest apartment a few
blocks from the United Nations.
In New York, Park found his way into the restaurant business,
ultimately winding up as the owner of four Manhattan Tokyo Joe
burrito places. Meanwhile, he was trying to make money in the
stock market the old-fashioned way--and losing. Frustrated with
the mess he says a blue-chip brokerage was making of his
investment portfolio, he went online and turned to the Motley
Fool Website and message boards.
Launched by brothers Tom and David Gardner in 1994, The Fool
(www.fool.com) has become the best-known brand name in online
financial advice, generally espousing a conservative,
buy-and-hold philosophy. Park began posting his own stock ideas
and became a presence on the Motley Fool's America Online site
(keyword: Fool), weighing in frequently in the area devoted to
computer-drive maker Iomega. In 1996, that stock famously
soared--then crashed--on a wave of wild enthusiasm emanating
from the Motley Fool board, a foretaste of the current giddy
marriage between Internet chatter and soaring tech-stock prices.
"And I was there," Park says. He adds that he first lost money
going long on Iomega and then made several thousand dollars
shorting when the stock began to fall. He also learned the
golden rule of online trading: "Hype, man. Hype moved the
f---ing stock.... The Internet is not investment. This is hype,
and everybody should know that."
The world of online financial chat is as much show biz as
anything else, an endless, open-mike night in which charismatic,
energetic (and usually anonymous) self-promoters can rise almost
instantaneously from obscurity to a kind of celebrity. So it was
with Tokyo Joe. Eventually, his attitudes about investing
started to change, and he began to feel out of step with the
Motley Fool's value-investing model. "I realized the Motley
Fools are fools indeed," he says, "because they don't know when
to sell.... (T)hey pump stocks--even when they are going
down--based on fundamentals. Who gives a s--- about
fundamentals? It's market sentiment. No matter how good a
company's fundamentals are, if market sentiment says it's going
down, it's going down. You do not fight the ticker. That's when
I became a day-trader."
"MEX, YOU SHOULD START CHARGING PEOPLE, MAN"
In 1997, Park began posting on Silicon Investor, which caters to
a faster and self-consciously more "sophisticated" investment
crowd, many of them day-traders. "It was wide-open territory,"
says Park. "It was unrestricted. It was the wild, wild West." It
still is: The sober minority in many Silicon Investor "threads,"
or discussion areas, is often drowned out by vapid cheerleading
for one stock or another, not to mention a regular contingent of
short-sellers, angry cranks and would-be manipulators with a
variety of agendas hidden behind their online pseudonyms. But
Park, whose Silicon Investor handle is TokyoMex, is no slouch in
the invective department, and his loud and distinctive voice
made him stand out amid the frequent food fights. He is
currently the Website's most followed poster.
The Silicon Investor area devoted to Tokyo Joe and his followers
seems to have more than its share of contention, with Park
trading insults and ridicule with a rotating cast of
antagonists--"Deeber, you are a #@&head"--to the applause of his
large amen corner--"TokyoMex is a Prodigy!!!." Until recently,
one of Park's loudest and most vitriolic critics ran a thread on
Silicon Investor devoted solely to trashing him. But the site's
management ultimately took the thread down.
Notwithstanding (or maybe because of) such brawling, Park
attracted a following. He says, "People kept sending me e-mails:
'Next time, Mex, you buy something, you let me know.' So this
list grew to 2,000 people. So when I bought something, I sent
e-mails out and the volume went up and the price went bonkers. I
had no desire to make any money out of this thing; it just
happened, you know? But then some members started saying to me,
'Mex, you should start charging people, man.'" He did just that,
and a business was born.
LAUGHING OUT LOUD
Park currently posts comments three or four times a day on the
"Tokyo Joe's Cafe/Societe Anonyme" discussion area at Silicon
Investor. He has also flirted with newcomer Raging Bull
(www.ragingbull.com), whose managers have been trying to woo him
to their site. Park says he's grown tired of the yelling and
screaming online. The chief function of the message boards, as
far as he is concerned, is to serve as advertising for his other
enterprises. The real Tokyo Joe action can be found in his
e-mail to Societe Anonyme members--about a dozen a day ranging
in content from recycled news to specific stock picks and price
targets--and in his private online chat room.
One afternoon in February, for instance, Park was online in the
chat room under the name TokyoMex, with about 200 of his
followers crowded around him in cyberspace like eager yeshiva
boys encircling a learned if sometimes irascible rabbi,
alternately flattering him, joking with him and peppering him
with arcane questions. Park, tapping away from behind his Level
Two screen at home in Manhattan, had written earlier that he had
received a tip from a reliable source that there would be news
coming on PC Quote Inc., a company that retails market data via
satellite and over the Internet.
At about 1:15 p.m., one of his members piped up to ask when the
news was coming.
Park shot back: "How the hell do I knwo (sic) when... what am I a
messenger?... its coming soon!"
Another member wrote: "I always thought you were a messenger--I'm
crushed!"
A third chimed in: "TM...can you tell me when my niece will have
her sixth contraction? She's pregnant and the doctor wants to
know."
Yet another added: "I don't think TM should answer these
questions...until he tells me if I should lighten my hair."
TokyoMex himself responded: "lol"--which means "laughing out loud"
in cyberspeak.
Park says he decides which stocks to hype to his members based
on information he gets from public sources: newspapers, CNBC,
the array of market data available to anyone over the Internet.
"But," he adds, "I do have some tremendous resources through the
(Societe Anonyme) membership. So we do get some information that
comes out before the rest of the world knows about it." Park
says, for example, a member tipped him off to J.C. Penney's bid
to buy Genovese Drug Stores last November, four days before the
news became public. "So we got in at $25.25," he says. "We sold
at $30, $31."
"WHAT AM I? A CHARITY?"
Occasionally, there are incidents that provoke sniping on the
Internet and bring questions that Park would just as soon not
hear. He insists--angrily and repeatedly--that his operation is
strictly aboveboard, but he does admit to a practice that should
give pause to anyone considering taking his advice: He will
sometimes take a position in a stock and then recommend it to
his Societe Anonyme and anyone else who will listen via his
posts on the Web. Then, when buying drives up the price to his
satisfaction, he sells.
This, Park says, is okay as long as he's honest about it.
"Everybody knows that I'm buying before you buy, and I'm selling
when you're buying. Otherwise, what am I? A charity?" Indeed,
his Website does carry a lengthy disclaimer, and his e-mail to
subscribers often states how many shares he owns of a particular
stock and at what price he bought them. Which is more, Park
likes to say, than you can expect from most stock pickers:
"(With) day-traders and any other kind of scam
hypesters--including myself, sometimes--when they say 'buy,'
that means they already have a position in the stock, including
Peter Lynch, including Abby Cohen."
But if Peter Lynch or Abby Cohen or any stockbroker or money
manager bought a stock, hyped it and sold their own shares into
the demand they'd created among their own clients, it would be
what market hands call front-running--which is not only bad
manners but also a flagrant violation of federal securities law.
Can what Joe Park does be legal? Probably, say securities law
experts, including one senior federal enforcement official who
spoke privately. According to Ira Sorkin, a leading New York
City defense lawyer and a veteran of both the SEC and the U.S.
Attorney's office for the Southern District of New York, a
tipster like Park is likely in the clear as long as he discloses
his holdings to his subscribers. Because he is neither a
registered securities dealer nor a certified financial adviser,
Park is for legal purposes essentially a publisher of financial
information. As a result, he has all the protections of the
First Amendment and is subject to none of the regulation to
which financial pros must submit. Which means that anyone
following his advice has no legal right to expect Park to be
bound by a fiduciary duty to anything but his own wallet.
"Anyone who wants to make an investment on that basis," Sorkin
says, "God bless them."
Besides being legal, says Park, his tips don't offend his
subscribers because most of them are doing quite well, thank
you. Indeed, if a few sessions in his chat room are any
evidence, Park's Societe is composed mainly of satisfied
customers. Danny Chan, an Indiana University finance major, says
he has been up as much as $57,000 this year day-trading, partly
due to Park's tips. He writes in an e-mail message, "T-Mex is
the man.... For 100 a month T-Mex is a bargain."
Park says he has received no visits or inquiries from
regulators, although he admits, "I'm surprised I have not." But
he doesn't seem particularly worried. Sipping Scotch and
chain-smoking Marlboros one recent evening in a genteel bar
catering to a U.N. middle-management clientele a few blocks from
his home, he relaxes after a long day in front of his screens. A
dapper older man whom Park describes as a foreign diplomat
thanks him for a recent stock tip. Meanwhile, Park sits awaiting
the arrival of some potential business associates whom he plans
to wine and dine at a Manhattan geisha house (an entirely
respectable and elegant Asian business practice, the
well-traveled Park is quick to point out to a provincial
American). He talks big--about starting his own mutual fund,
about writing a book about himself ("It's the American dream"),
about taking his operation public one day. Nothing seems out of
reach.
A year ago, he says, he had $20,000 in the market. Now he is up
more than $1.6 million. Life is good, and Park is feeling
expansive. He takes a moment to reflect on what he, his
followers and his imitators mean to the markets and to
investing. In a word: the future. If that's discomforting, he
says, smiling beatifically through a nimbus of cigarette smoke,
get over it: "We're the new blood, man."
Smokin' Joe Not to be confused with Warren Buffett, Tokyo Joe Park is the leader of a new breed of online stock gurus who are moving stocks and claiming scorching returns. Can what he does be legal?
Author: Contributors: Peter Carbonara
Date/Issue: April 1999 Vol. 28 No. 4 Word Count: 2680
Section: Features/Online Trading
While CNBC rattles on in the background, Joe Park sits at a
small desk in his Manhattan living room in front of three
computer screens. A stack of how-to trading books collects dust
on a shelf behind him, and a pack of Marlboros is within easy
reach. One computer screen displays the give-and-take in an
online financial chat room. Another shows Nasdaq Level Two
quotes, the up-to-the-second prices being bid and asked by
marketmakers like Merrill Lynch and J.P. Morgan. A window on yet
another screen shows an online brokerage account that on this
rainy December day looks to contain about $700,000.
So how's business?
It's tremendous," says Park. "So far I'm up 6,400% (for
1998)--6,400 bloody percent!"
Talking quickly and loudly, Park, a wiry 40-year-old South
Korean immigrant and former owner of four Manhattan burrito
restaurants, offers a recipe he believes any investor can use to
make money fast--like right now--in the current bull market.
First, put about half your money into something nice, safe and
boring. Then take the rest and buy stocks that have fallen well
off their highs, particularly thinly capitalized issues that
have the potential to move quickly. When they do move, sell.
Immediately. Don't hold out for a huge score. Pocket a gain of a
quarter point or even a sixteenth of a point. Repeat as
necessary until rich.
An astute trader who times his moves correctly, says Park, can
make money moving in and out of a single stock all day. "Let's
look at COOL," he says, pulling up figures and charts on
Cyberian Outpost, a company that sells computers and software
over the Internet. "This stock has traded between $25.25 and $27
today. By being smart on a thousand shares, just going for
one-quarter of a point, you can make $250 in a matter of five
minutes. Let's say if you did it 10 times and screwed up three
times but were successful seven times, that's what? Seventeen
hundred and fifty dollars to take home.... That's what anybody
can learn."
This is not traditional Warren Buffett buy-and-hold investing.
"This is speculation," says Park. "We're not talking about
investment; we're talking about moving on--hit and run. You will
not get 6,000% return--as I have done--buying AT&T. It was down
at $60 in July and August. If I had bought then and sat on the
bloody thing until now, I would not have gained anything. That
sucks, you know? Why bother?"
Joe Park is a day-trader, but he's not just one of the thousands
of market obsessives out there trying--and usually failing--to
make a living buying and selling stocks via their PCs. In fact,
as "Tokyo Joe" or "TokyoMex," Park is arguably the most
influential online market analyst and stock picker in the
country. More than 800 investors around the world, most of whom
pay him $100 a month--making his take more than $70,000 a
month--are members of his Societe Anonyme, which entitles them
to receive a daily barrage of stock tips and trading advice via
e-mail. These members also get the password to a private online
chat room, where Park holds forth throughout the trading day. In
addition, Park has attracted the largest following of all the
cyber-gurus who post tips and analyses on Silicon Investor
(www.techstocks.com), a popular financial Website with about
100,000 subscribers. On top of that, Park claims that something
like 200,000 people a day visit his own Website
(www.tokyojoe.com), where he posts his tips for free--albeit
after first sending them out to paying customers. All of this
has given Joe Park serious mojo in the market.
Last Dec. 11, for instance, Scott Kessler, an equity analyst at
Standard & Poor's in New York City, saw one of the stocks that
he follows do some odd things. The shares of FileNET Corp.,
which makes document management software, jumped about three
points to $11 a share, and volume rose to about 3.5 million,
more than twice its recent daily average. FileNET, which had
been in free-fall since last summer, was bouncing back--for no
apparent reason. Then Kessler took a look at Silicon Investor
and saw the hand of Tokyo Joe. Park had announced that he liked
the stock over the short term (the very short term) and expected
it to go higher. And that, says Kessler, was enough to make the
stock dance.
The rise of Tokyo Joe represents either a) the coming of age of
the Internet as a force in investing, b) the ultimate
democratization of the market for financial advice, c)
"irrational exuberance" in full hysterical flower, d) the
pumping and dumping of highly chancy stocks or e) all of the
above. Whatever it is, Tokyo Joe's act has got the attention of
companies, online investors, Wall Street analysts, Web
message-board operators and almost certainly the Securities and
Exchange Commission (although John Stark, the chief of the SEC's
recently created online enforcement unit, declines to discuss
Park). Admired and reviled online in about equal measure, Tokyo
Joe--extremely shrewd, occasionally charming, frequently
arrogant and invariably profane--is a kind of Matt Drudge for
investors, the most influential of a small but growing
counter-establishment of Internet stock gurus.
KEYWORD: FOOL
Most of these gurus, including Park, have followed a similar
trajectory to Internet stardom. First they're just investors who
like to discuss the market via online message boards and chat
rooms; then a virtual congregation forms around them as they
become stock prophets whose wisdom is eagerly sought by the
anxious and the avaricious; then one morning they wake up and ask
themselves, "Why give these people advice for free when I can
charge for it?"
Many day-traders--notwithstanding their frequent claims of
independent thinking and manly self-reliance--are happy to take
guidance wherever they can get it, and an online industry has
grown up to feed that hunger. The most polished and
professional-looking of these operations is Pristine
(www.pristine.com), a White Plains, N.Y. outfit--half online tip
service, half finishing school for would-be day-traders--that
was launched four years ago by partners Oliver Velez and Greg
Capra, who've recently had preliminary conversations about
joining forces with Tokyo Joe.
Numerous other smaller entrepreneurs run electronic cottage
businesses out of their homes. Among the more reputable and
influential is Barbara Simon, a 38-year-old graphic designer in
Boca Raton, Fla. who began posting on Silicon Investor a few
years ago under the handle Jenna. Simon then launched a Website
(www.marketgems.com) and subscription e-mail tips service. Many
of the online gurus have surprising influence, particularly on
volatile technology issues. "Once you get a following," says
Pristine's Oliver Velez, "it takes no special skill to move a
stock." For breadth of influence, though--not to mention sheer
audacity and salesmanship--Park is the reigning king, the
current numero uno.
The origin of "Tokyo Joe," as told by Joe Park, goes something
like this: Raised in Seoul, South Korea, he was a smart but wild
kid who soon discovered he had a taste for travel and the good
life. As a teenager, he ran away to see Mexico. After a series
of adventures there, including a few days spent in a squalid
jail for entering the country illegally, he returned home to get
a law degree. He held a series of corporate jobs in Korea,
Europe and Japan before experiencing a descent into yuppie hell:
plenty of success, money and 1980s-style excess accompanied by
nagging attacks of "Who am I?" and "What does it all mean?"
Following a tearful epiphany in a Buddhist temple, he decided to
start over. He married and brought his wife to the U.S., landing
in Seattle, where he crashed and burned trying to make it
selling condominiums before eventually working in a gas station.
Then the Parks migrated east to New York City, where they now
live with their young daughter in a modest apartment a few
blocks from the United Nations.
In New York, Park found his way into the restaurant business,
ultimately winding up as the owner of four Manhattan Tokyo Joe
burrito places. Meanwhile, he was trying to make money in the
stock market the old-fashioned way--and losing. Frustrated with
the mess he says a blue-chip brokerage was making of his
investment portfolio, he went online and turned to the Motley
Fool Website and message boards.
Launched by brothers Tom and David Gardner in 1994, The Fool
(www.fool.com) has become the best-known brand name in online
financial advice, generally espousing a conservative,
buy-and-hold philosophy. Park began posting his own stock ideas
and became a presence on the Motley Fool's America Online site
(keyword: Fool), weighing in frequently in the area devoted to
computer-drive maker Iomega. In 1996, that stock famously
soared--then crashed--on a wave of wild enthusiasm emanating
from the Motley Fool board, a foretaste of the current giddy
marriage between Internet chatter and soaring tech-stock prices.
"And I was there," Park says. He adds that he first lost money
going long on Iomega and then made several thousand dollars
shorting when the stock began to fall. He also learned the
golden rule of online trading: "Hype, man. Hype moved the
f---ing stock.... The Internet is not investment. This is hype,
and everybody should know that."
The world of online financial chat is as much show biz as
anything else, an endless, open-mike night in which charismatic,
energetic (and usually anonymous) self-promoters can rise almost
instantaneously from obscurity to a kind of celebrity. So it was
with Tokyo Joe. Eventually, his attitudes about investing
started to change, and he began to feel out of step with the
Motley Fool's value-investing model. "I realized the Motley
Fools are fools indeed," he says, "because they don't know when
to sell.... (T)hey pump stocks--even when they are going
down--based on fundamentals. Who gives a s--- about
fundamentals? It's market sentiment. No matter how good a
company's fundamentals are, if market sentiment says it's going
down, it's going down. You do not fight the ticker. That's when
I became a day-trader."
"MEX, YOU SHOULD START CHARGING PEOPLE, MAN"
In 1997, Park began posting on Silicon Investor, which caters to
a faster and self-consciously more "sophisticated" investment
crowd, many of them day-traders. "It was wide-open territory,"
says Park. "It was unrestricted. It was the wild, wild West." It
still is: The sober minority in many Silicon Investor "threads,"
or discussion areas, is often drowned out by vapid cheerleading
for one stock or another, not to mention a regular contingent of
short-sellers, angry cranks and would-be manipulators with a
variety of agendas hidden behind their online pseudonyms. But
Park, whose Silicon Investor handle is TokyoMex, is no slouch in
the invective department, and his loud and distinctive voice
made him stand out amid the frequent food fights. He is
currently the Website's most followed poster.
The Silicon Investor area devoted to Tokyo Joe and his followers
seems to have more than its share of contention, with Park
trading insults and ridicule with a rotating cast of
antagonists--"Deeber, you are a #@&head"--to the applause of his
large amen corner--"TokyoMex is a Prodigy!!!." Until recently,
one of Park's loudest and most vitriolic critics ran a thread on
Silicon Investor devoted solely to trashing him. But the site's
management ultimately took the thread down.
Notwithstanding (or maybe because of) such brawling, Park
attracted a following. He says, "People kept sending me e-mails:
'Next time, Mex, you buy something, you let me know.' So this
list grew to 2,000 people. So when I bought something, I sent
e-mails out and the volume went up and the price went bonkers. I
had no desire to make any money out of this thing; it just
happened, you know? But then some members started saying to me,
'Mex, you should start charging people, man.'" He did just that,
and a business was born.
LAUGHING OUT LOUD
Park currently posts comments three or four times a day on the
"Tokyo Joe's Cafe/Societe Anonyme" discussion area at Silicon
Investor. He has also flirted with newcomer Raging Bull
(www.ragingbull.com), whose managers have been trying to woo him
to their site. Park says he's grown tired of the yelling and
screaming online. The chief function of the message boards, as
far as he is concerned, is to serve as advertising for his other
enterprises. The real Tokyo Joe action can be found in his
e-mail to Societe Anonyme members--about a dozen a day ranging
in content from recycled news to specific stock picks and price
targets--and in his private online chat room.
One afternoon in February, for instance, Park was online in the
chat room under the name TokyoMex, with about 200 of his
followers crowded around him in cyberspace like eager yeshiva
boys encircling a learned if sometimes irascible rabbi,
alternately flattering him, joking with him and peppering him
with arcane questions. Park, tapping away from behind his Level
Two screen at home in Manhattan, had written earlier that he had
received a tip from a reliable source that there would be news
coming on PC Quote Inc., a company that retails market data via
satellite and over the Internet.
At about 1:15 p.m., one of his members piped up to ask when the
news was coming.
Park shot back: "How the hell do I knwo (sic) when... what am I a
messenger?... its coming soon!"
Another member wrote: "I always thought you were a messenger--I'm
crushed!"
A third chimed in: "TM...can you tell me when my niece will have
her sixth contraction? She's pregnant and the doctor wants to
know."
Yet another added: "I don't think TM should answer these
questions...until he tells me if I should lighten my hair."
TokyoMex himself responded: "lol"--which means "laughing out loud"
in cyberspeak.
Park says he decides which stocks to hype to his members based
on information he gets from public sources: newspapers, CNBC,
the array of market data available to anyone over the Internet.
"But," he adds, "I do have some tremendous resources through the
(Societe Anonyme) membership. So we do get some information that
comes out before the rest of the world knows about it." Park
says, for example, a member tipped him off to J.C. Penney's bid
to buy Genovese Drug Stores last November, four days before the
news became public. "So we got in at $25.25," he says. "We sold
at $30, $31."
"WHAT AM I? A CHARITY?"
Occasionally, there are incidents that provoke sniping on the
Internet and bring questions that Park would just as soon not
hear. He insists--angrily and repeatedly--that his operation is
strictly aboveboard, but he does admit to a practice that should
give pause to anyone considering taking his advice: He will
sometimes take a position in a stock and then recommend it to
his Societe Anonyme and anyone else who will listen via his
posts on the Web. Then, when buying drives up the price to his
satisfaction, he sells.
This, Park says, is okay as long as he's honest about it.
"Everybody knows that I'm buying before you buy, and I'm selling
when you're buying. Otherwise, what am I? A charity?" Indeed,
his Website does carry a lengthy disclaimer, and his e-mail to
subscribers often states how many shares he owns of a particular
stock and at what price he bought them. Which is more, Park
likes to say, than you can expect from most stock pickers:
"(With) day-traders and any other kind of scam
hypesters--including myself, sometimes--when they say 'buy,'
that means they already have a position in the stock, including
Peter Lynch, including Abby Cohen."
But if Peter Lynch or Abby Cohen or any stockbroker or money
manager bought a stock, hyped it and sold their own shares into
the demand they'd created among their own clients, it would be
what market hands call front-running--which is not only bad
manners but also a flagrant violation of federal securities law.
Can what Joe Park does be legal? Probably, say securities law
experts, including one senior federal enforcement official who
spoke privately. According to Ira Sorkin, a leading New York
City defense lawyer and a veteran of both the SEC and the U.S.
Attorney's office for the Southern District of New York, a
tipster like Park is likely in the clear as long as he discloses
his holdings to his subscribers. Because he is neither a
registered securities dealer nor a certified financial adviser,
Park is for legal purposes essentially a publisher of financial
information. As a result, he has all the protections of the
First Amendment and is subject to none of the regulation to
which financial pros must submit. Which means that anyone
following his advice has no legal right to expect Park to be
bound by a fiduciary duty to anything but his own wallet.
"Anyone who wants to make an investment on that basis," Sorkin
says, "God bless them."
Besides being legal, says Park, his tips don't offend his
subscribers because most of them are doing quite well, thank
you. Indeed, if a few sessions in his chat room are any
evidence, Park's Societe is composed mainly of satisfied
customers. Danny Chan, an Indiana University finance major, says
he has been up as much as $57,000 this year day-trading, partly
due to Park's tips. He writes in an e-mail message, "T-Mex is
the man.... For 100 a month T-Mex is a bargain."
Park says he has received no visits or inquiries from
regulators, although he admits, "I'm surprised I have not." But
he doesn't seem particularly worried. Sipping Scotch and
chain-smoking Marlboros one recent evening in a genteel bar
catering to a U.N. middle-management clientele a few blocks from
his home, he relaxes after a long day in front of his screens. A
dapper older man whom Park describes as a foreign diplomat
thanks him for a recent stock tip. Meanwhile, Park sits awaiting
the arrival of some potential business associates whom he plans
to wine and dine at a Manhattan geisha house (an entirely
respectable and elegant Asian business practice, the
well-traveled Park is quick to point out to a provincial
American). He talks big--about starting his own mutual fund,
about writing a book about himself ("It's the American dream"),
about taking his operation public one day. Nothing seems out of
reach.
A year ago, he says, he had $20,000 in the market. Now he is up
more than $1.6 million. Life is good, and Park is feeling
expansive. He takes a moment to reflect on what he, his
followers and his imitators mean to the markets and to
investing. In a word: the future. If that's discomforting, he
says, smiling beatifically through a nimbus of cigarette smoke,
get over it: "We're the new blood, man."
I too am quite surprise that they would want to be involved with TJ, but then again, they did say they were in conversations. Too bad that they even told anyone they had conversations as I would think anyone who knew TJ knew what he was doing.
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