March 14, 2007

The Stock Market Plays, Reb Moshes old hobby

Filed under: Current Events — Reb Moshe @ 11:46 pm

 

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Chazal teach us that in order for blessing to come, there must be a kli, vessel for it to come in. Years ago, this vessel was Wall Street but today, it can be a pretty messy and corrupt system. In order to support ilovetorah and to fulfil my dreams of building my own Yeshivah, I left Kollel to trade stocks a couple of years back. At first I lost thousands of dollars but then I was up many thousands, enough to start my dream. It was then that the market got even more crooked then ever. Stocks were illegally shorted and taken advantage of since everything turned all digital and the SEC wasn’t setup to police the activity. Literally Billions of dollars were stollen from the American people. It is and was the biggest fraud to ever hit the USA. Even today, the SEC, Courts and Congressman have turned their heads at what happened. I unfortuantely fell in this loop of being “had” by the marketmaker firms when 3 years ago they took illegal shorting to the maximum extreme. A few weeks prior, I had already hired a lawyer to buy property to build my yeshivah and was prepared to withdraw my first down payment when the bomb fell. We had been illegally shorted to the maximum extreme. This was not just in one of my stocks but rather, over 15 stocks dropped massively. Even if positive news came out about them, the stock would go down as marketmakers dumped more shares that didn’t even exist into the digital market. Businesses with huge profit margins were forced to close with almost no explanation.

Well, just like alchohal or any drug is addicting, so is the market. There are many wholes a person can simply fall through if they are gallable. The problem is that people don’t realize how far others are willing to go when they see dollar signs. One part of the stock manipulation is hiring third world people who barely know english to spread either a pump or dump room all over the web. About 90% of traders fall for these roomers and end up buying at a high. The key to good trading is to be expert in research and charting but even this is not enough. It takes a special feeling inside, maybe even a gift from Hashem to have a good eye for stocks. There are those select few and with years of practice many have finally found success but then again, that is with a good almost fair market and today…

Donations are not coming in so I am going to re-awaken my wall street passions and take a look at the market to see how it is faring today in the OTC. If anyone also has experience in trading and reading charts, maybe we can look some opportunities together. I also want to explore many other markets which I never did previously.

One reason I mention this here on my blog is because a great wrong has been done to many Americans and this is a little prayer from me that Hashem blesses those who still have money caught up in what has become a bad investment ONLY because of the biggest Fraud in history. Of course it is decided by Hashem who will be rich and who will be poor but may Hashem release the poor from their hard burdens and bless them!

6 Comments

  1. The first key in successful trading is to get a reliable, honest, good financial adviser. If you do it by yourself using an online broker you will get burned unless you’re prepared to make a career out of trading. Good advisers aren’t cheap, but they might just save you a ton in the long run. At the very least, get the free research that firms like Merill Lynch provide from their analysts. A smart rule that you should always follow: Invest in yourself before investing in others.

    Just my 2 cents. And Moshe, please run your posts through a spell checker 🙂

    Comment by Keith — March 17, 2007 @ 2:01 am

  2. Oh I have traded for years and I know a few who’s financial advisers helped them loose plenty of money. As the old saying goes, “Only trade what you can afford to loose”. Another way to safely play the market is to buy and then sell at profit leaving in what is considered, “Free Shares”. This way you always protect your original investment.

    Comment by Reb Moshe — March 17, 2007 @ 11:52 pm

  3. My old trading methods
    This is my favorite stock chart program. The main thing we are after with the chart is the understand the history, trend and the macd lines but this program does a lot for you.
    http://quotes.barchart.com/quote.asp?sym=DMTN
    This is just one of many chart programs I would use.

    Next you have research. Most traders simply go to ragingbull but the main way to find out info is to read the smaller boards like here, http://www.allstocks.com

    Finding the most talked about stocks, you then check out the companies website, who their competition is, the stability of their market, their partners, SEO and then you if you have too, you even phone them. Still, you believe nobody.

    Now most newbies use delayed ticker results which is like what you see on yahoo stocks. This is not the way to trade at all. You need to have a live feed. Most amateurs purchase a live feed but never buy level 2. Without a level 2 reader, you do not know the line up of the market makers. With level 2 you can put in your buy and sell before the price even changes. No way to see this with a simple live feed.

    Most amateurs will buy on news but pros buy before the news and sell on news day.

    Comment by Reb Moshe — March 20, 2007 @ 2:04 am

  4. How does naked shorting actually work? Shorting is a common market practice.

    Comment by Jimmy — March 20, 2007 @ 2:08 am

  5. In the larger market like nasdeq, anyone can short a stock and use naked shorting to borrow funds temporarily in order to short it. In the OTC & penny stocks only brokers & big money rollers, like firms can short the stock. What has happened is that marketmakers have been dumping illegal naked shorts into the float in order to drop or raise the price at their own will. The large market making firms work out deals between each other and trade these back and forth. There could actually be days where nobody is selling their shares and the stock will go down anyway because “fake digital shares dumped into the float which really don’t exist.”

    Here is some reading on it.

    http://www.fool.com/investing/high-growth/2005/03/30/whos-behind-naked-shorting.aspx

    http://www.wall-street.com/nakedshorting

    http://www.investigatethesec.com/

    The reason you don’t see more media coverage on this fraud is that most Media companies like Fox own major positions in market maker firms. Whenever companies try to speak up, the market makers just go after their stock all the more. Congress and the SEC mostly turn their heads to the activity as in order to clean it up, many very big people and firms would go to jail. They have come out with some rules in the last year to fix the problem but they lack the manpower to enforce them and they would have to almost change the system of trading entirely to fix it.

    Again, most of this activity happens with lower priced stocks but those are the only ones most of us can afford to purchase. They say that hundreds of small businesses go under each year because of this. It is only a matter of time before this activity is exposed.

    Comment by Reb Moshe — March 20, 2007 @ 2:22 am

  6. So far, I have seen lots of illegal activity. I saw a stock with only 22million o/s trade in one day billions of shares back and forth. The massive shorting and manipulation continues unwatched.

    Comment by Reb Moshe — March 30, 2007 @ 3:05 am

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