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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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Marketocracy capital management
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Barchart Portfolio Blogs
  • Why I don't hold positions in the stocks I cover 0 comments
    Jan 15, 2010 10:42 AM

    Recently I had a couple of readers comment that I shouldn't cover stock I didn't own.  The reason I don't own stocks I cover is ethics and regulations:

    1 -- Since I left the corporate world in October, I now write full time not only Seeking Alpha but also 6 other publications. It would be a pump and dump scheme if I bought a stock, recommended it to my readers and sold it before I told them to sell it.

    2 -- I have a family member who is employed by an investment bank. In order for me not to have a regulatory conflict with their employer's activities, their employer's compliance rules or even worse the SEC rules and regulations we limit ourselves to investing in ETFs and mutual funds in which we have no conflict.

    If you watch CNBC and see the disclosure they run after each of their quests recommends or pans a stock what would you rather see:

    1 - Disclosure - no conflict - no positions held,


    2 -- I own it, my spouse owns it, my family owns it, fiduciary trusts I control own it and my employer is a market maker and underwriter in the offerings of this stock
    and my employer presently holds this stock in their trading accounts.

    I'm not in conflict with my recommendations, I can't make money at your expense and anything I cover will not be a pump and dump on my part.

    Maybe you'd like to take the recommendations of a brokerage firm who owns and controls mutual funds who invest in the stock and at the same time they are recommending it to you, they are doing an underwriting of the stock or even worse selling it short in their own trading accounts.

    The best way not to violate the sprit or letter of "the Chinese wall" is to have no conflict whatsoever. I owe it to my readers not to double deal at their expense.


    Disclosure: Disclosure : no conflict no individual stock mentioned
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