TICN (The Investment Club Network)

Re: Ticn

The sytem is based on stock tips from a company in the states-arrives by CD Rom each month.
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No; it’s not.

The system is based on a stock market guru by the name of Babu Shah, a genius by all accounts.
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Never heard about this but I could be wrong.


The market is closed on Saturday and Sunday. Also all the trainers manage their own portfolios and learned the TICN system. Some have even been able to quit their day jobs because of it, although they were probably very dedicated and lucky as well.

It seems odd to me that anybody would recommend arguably advanced trading instruments such as puts and calls, rather than simple acquisitions and disposals, to novice investors!
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True; but they have to get something for their money I suppose.

When the club members feel that enough knowledge has been gathered through training, another acc is opened to conduct options trading.
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It’s the same account.
 
Re: Ticn

At least read something like A Random Walk Down
Wall Street by Burton Malkiel before proceeding.
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Completely agree, the more you can read before taking the course, be it investment books or online sites, the more you will get out of the course. You will also be more informed about whether the course is right for you, worth your time/money, etc. Check out the recommended reading thread in the key posts for some ideas.

show them how to gamble,
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To be fair, TICN's system is probably less of a gamble than what a lot of people do (i.e. taking tips off relatives or neighbours, etc.)
 
Re: Ticn

Buffet, for example, claims he realized technical analysis doesn't work when he turned the charts upside down and got the same answer.
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That's brilliant. I hadn't heard it before and it sums up Technical Analysis.

Brendan
 
Re: Ticn

Brendan said:
That's brilliant. I hadn't heard it before and it sums up Technical Analysis.

Brendan
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Yes; sometimes charts can be ambiguous and people might disagree about which direction the price is likely to move in.

Having said that, people will often disagree about the fundamentals of a company as well and in particular it's intrinsic value. This is often due to different methods or different discount or growth figures.
 
Re: Ticn

Is there performance related information available other than showing the top 50 performers,I would like to see the bottom 50 clubs in comparison as well as knowing how the group as a whole compared to the major Indices,gross and net of TICN's fees and share
 
Re: Ticn

Great question. This is the real meat of the matter isn't it?

I know "past performance is no predictor", but even if TICN clubs in general have historically outperformed the major indexes then I would be impressed to a degree.

I suspect they underperform - possibly by a big margin. Otherwise, they'd be shouting about the returns clubs make.
 
Re: Ticn

Not a member of TICN; do know a bit about them.

Personal objections include;

From what I see, a lack of empasis on money management/bet size. Probably most crucial area of trading.

There seems to be an emphasis on not taking a loss. Read an interview with TICN promoter recently who said she had never taken a loss on a trade (income from covered calls included,etc). I think that is ridiculous and unsustainable. We all get things wrong. When we do, take the loss quickly. Redjoker says that TICN does not recommend short selling because of the risk of unlimited losses. Using a stop loss order prevents that.

Charges are steep, particularly the charge for the course on candle charting (395 euro). There's masses of free info all over the web on candle charting. I love candle charts for their clarity, but a few pages of info is all you really need to know anyway,IMHO.

Remember reading saying that they aim for 2% a week. Even the top clubs have come nowhere near returns like that.

In their defence - it's a much better package than that offered by other investment clubs (thinking of ILTB's paltry offering). Also, it's good that some effort is made to teach people nuts and bolts of technical analysis. The ignorance in Ireland on this subject is breathtaking. Quoting a witticism from Buffett is not proof that it doesn't work. Some of the most successful traders rely almost solely on TA. I notice that none of the sceptics on this board answered RedJoker's point regarding the phenomenonally successful James Simons, for example. Ditto with Ed Seykota, Bruce Kovner and a host of others. TA is not some voodoo astrology - you will come across very few professionals who do not use it in some form. If you are a short-term trader, in particular, it's indispensible.

(On a separate point, the markets are closed on Saturday and Sunday. After-hours trading amounts to a few hours before and after the offical opening hours. Liquidity tends to be awful during these times and very few traders even bother attempting to trade these times).
 
Re: Ticn


No; they don't show how the other clubs do. Your suspicions are probably correct. A lot of clubs do go bust or break up. TICN might argue that this could be due to the individuals not putting in the time or effort, etc. or that those clubs didn't follow the TICN system and invest in 4x4 companies.

However, the clubs probably do better than people who follow 'Uncle Jim's or Auntie Mary's' advice but worse than those who dollar cost average into index funds.

Of course a seminar saying just put money into index funds probably wouldn't last very long.
 
Re: Ticn

From what I see, a lack of empasis on money management/bet size. Probably most crucial area of trading.
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TICN recommend buying at least 300 shares of a company, otherwise commissions on covered calls become insurmountable.

For a full club with 19 members, after one year they will have invested E22,800. To buy 300 shares of optionable companies a club stands absolutely no chance of being adequately diversified (as defined by portfolio theory).


I definitely agree with this, there's the sense that if one of your strategies go wrong (rolling, momentum, etc.), it's okay because you're in it for the long run and you're using buy and hold strategies. That's just the feeling I got anyway.

Come to think of it, they did say that you should be comfortable holding onto the shares for the next 5 years if you want to roll, etc. The problem is that you tie up large amounts of capital by doing this instead of just taking the loss.

Redjoker says that TICN does not recommend short selling because of the risk of unlimited losses. Using a stop loss order prevents that.
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TICN do recommend stop-losses. However, stop-losses do not always get you out, stocks will sometimes gap, particularly foreign stocks. There are a lot of cons involved with short-selling; uptick rules, the risk of short squeezes, having to use margin (TICN recommend not using this), etc.

Also their argument is that the companies are of good quality and are expected to go up over time, therefore you are betting against the direction of the long-term market.

Another point would be that amateur investors probably shouldn't be short-selling anyway.


TICN also have a long piece about Candlesticks in their education centre on their website.

I've never taken that course, I watched a Ryan Lytchfield DVD which gave me the basics. One argument I would have against all the free info on the web is that it's often hard to pick out important points, particularly for beginners. Having a teacher point out relevant parts is very useful.

Remember reading saying that they aim for 2% a week. Even the top clubs have come nowhere near returns like that.
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I think they say 5% a month, still an unsustainable goal, especially for novices.


Just a quick note on TA. The charting package TICN recommend, Telecharts, is fantastic. There is a wealth of educational information all over the place; there is an online forum, online videos a couple times a month, notes on charts from the owners, etc. I can’t recommend it highly enough.

TICN do not recommend using TA solely. They use fundamental analysis to find good quality, undervalued companies and technical analysis to time entry and exit points.

I spoke to a retired hedge fund manager who didn't use TA. He conceded that price patterns could often be interesting when viewed in light of what was going on at the company.
 
Re: Ticn


I noticed this was brought up in another thread I went through. I refrained from commenting at the time because I wanted to see if it was possible to estimate the other returns, or a mean value, using a normal distribution.

Given that we have the returns for the top 50 clubs out of however many there are we might be able to get confidence intervals or important statistics from the data.

However, there would be problems with this and assumptions would have to be made. Also I'm not sure if it's possible but I will have a go anyway.
 
Re: Ticn

This is taken from Views on Investment Clubs

Having seen the methods and "skills" taught by one investment club, TICN, timing of the market is specifically one of the things that they do encourage their members to pursue.
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They don't even give you free reign on what stocks to analyse and buy buy. You get a listing of "vetted" stocks from head office each month to analyse and then make your buy decisions based on that.
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They first teach the buy and hold methods. Then they add in other strategies which do contain elements of market timing. But IMHO nearly all forms of stock selection boil down to some form of ‘market timing’.

You’re right; they don’t give you free reign over stock selection. They post a list of stocks which meet their requirements for quality and price, then you are expected to evaluate these companies yourself (using TICN’s methods) and base your investment decisions on that.


The list of stocks also shows the scores for price and quality, it is then expected that you do your own research on the company as well. Therefore even if they did recommend a weak stock, individuals should recognize this and not buy it.

Also since the amount of money traded by TICN is miniscule when compared with the ‘big picture’ and the stocks covered by Valueline usually have large daily volume, it would be a fairly ineffective method for a pump and dump scam.
 
Re: Ticn

Investment clubs - or alternatives?


I think it may be worth while for people thinking of taking the MMCP to attend a meeting of a club that is already formed in your area. Tell them you are thinking of signing up. It would give you the chance to see how the club operates and form your own opinion before making a financial commitment.

Notice how many of the members attend, how many contribute to the discussions, what they focus on, etc. It’s surely worth an hour or two of your time and afterwards you could post your experience in this thread for other members.

A couple of months ago two people decided to come along to one of my club’s meetings, one had been in another club which had broken up and one was thinking of taking the MMCP. The first has joined our club and I haven’t heard from the second since.

Yes it could be close to 10% when all costs are included. Realize that the E7.50 you pay for the website means you have to make 7.5% on the E100 invested to break even. A fairly sobering thought.


You must have gotten a bad club co-ordinator. As I mentioned before, they are an extremely important component in any club.

Most people have good intentions when starting off, a lot soon realize they no longer have the time or inclination to turn up or participate. There are a few members of my club that don’t have the time to attend meetings; it’s fairly frustrating when meetings are only half full.

I do spend a good deal of time and effort trying to educate the other members, e-mailing educational pieces and links to various sites, etc. At some meetings I have gone through indicators and trades. I also e-mail a report of our current position and explain my views on our investments and potential trades each month.

It is in my best interest to see the other people in my club learning as the club's results might suffer otherwise.
 
Re: Ticn


You seem to be the victim of the ‘free rider problem’. You are more into the club than the others but you spend your time doing educational work and hoping to build up enthusiasm, while the ‘free riders’ will benefit from your activities. Why waste your time on them? Even if some members do know a bit about trading it is in their interest to get ideas from you and keep their own knowledge private. Concentrate on your time and effort on trades that benefit you personally. You can always use a spread betting a low cost way of testing trading strategies.
 
Re: Ticn


For the same reason people post on this message board I suppose.

Even if some members do know a bit about trading it is in their interest to get ideas from you and keep their own knowledge private.
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I understand why it is in their interest to get ideas from me but could you elaborate on why it's in their best interest to keep their own knowledge private?

Concentrate on your time and effort on trades that benefit you personally. You can always use a spread betting a low cost way of testing trading strategies.
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I suppose practicing trades benefits me personally, I gain experience and feel the emotions that are inherent in trading (which play money trading can't replicate).

The ability to test new strategies and bounce ideas off people is also very useful.
 
Re: Ticn

I just went onto the performance of the top 50 clubs page on the TICN website, updated as of 21st of December 2006.

They name Blackwater Traders Investment Club as the top club, having achieved a 134% return.

I can gaurantee this is false, since I'm a member of that club and our returns are nowhere near that. In fact, most of the data on our club is inaccurate.

Either they have our club mixed up with another one, they were misinformed about our results or they're just plain lying. In any case I feel it's worth mentioning.

I've e-mailed their support and I will post their response when I get it.
 
Re: Ticn

RedJoker said:
For the same reason people post on this message board I suppose.
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Posting on a bulletin board can be a non-zero sum game, e.g. if I like a good or a service it’s in my interest to alert others to its existence so the manufacturer or service provider will continue to produce it or produce better goods or services.
But trading is a (at best) a zero-sum game. You’ve loads of posts on, e.g. funds, asset allocation etc. but nobody posts their trading strategy.


RedJoker said:
I understand why it is in their interest to get ideas from me but could you elaborate on why it's in their best interest to keep their own knowledge private?
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Because trading is a zero-sum game (it’s actually a negative sum game as brokers slice off their fees from each trade). If someone can learn from you and improve his/her trading strategy (while yours remains constant) it is in his/her interest to do so, in the long run they will gain. They also save on the intellectual work of research, fact finding etc. as you are doing it for them – for free. That’s why I’ve never seen the benefit of investment clubs – apart from their social dimension. Unless everybody pull their weight you must have a free-rider problem.
 
Re: Ticn


For some people it could be a motivational issue,many people would never attempt it on their own.

Also given the amounts involved bulking together 19 peoples money for these trades cuts down significantly on commission costs per person
 
Re: Ticn


By alerting others to the existence of a good or service you may increase the demand for it, which in turn may raise it's price.

Trading is a positive sum game, the market rises in the long run. Options are an example of a zero sum game.

My point about message boards is that you personally gain nothing from posting advice. You could selfishly only read the posts and ask questions, this would increase your own knowledge whereas posting advice would benefit others.



Again, trading is a positive sum game. If someone learns from me, they will gain, but it won't be at my expense. My knowledge and returns from any trading strategies will still be the same.

If both of us share our knowledge we will both gain.

You're right there may be a free-rider problem, somebody may gain knowledge from my efforts while giving me nothing in return. However if, for example, 5 people all share their knowledge and advice, then the group, collectively, will gain.
 
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